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The (Totally Unfair) Secret Advantage of the 1% — and How to Level the Field

Scott Trench
8 min read
The (Totally Unfair) Secret Advantage of the 1% — and How to Level the Field

Want to know why the top 1% of Americans are super rich and why the gap keeps getting wider and wider between them and the rest of us?

It’s because money is a competitive sport and they know the rules — and then they teach them to their children at an early age.

That’s not fair.

When I was growing up, I was a pretty good student. I got decent grades in Math, English, and Science, though I was certainly lacking talent in the Art and Music departments. But there was one subject that I didn’t master. I didn’t even get the basics down. In fact, I was never even taught it.

That subject was Finance (aka “Wealth Creation”).

A Lack of Education

I blame my lack of structured financial education squarely on the Maryland Public School System (I’m from a small town called Clarksville, MD). They gave millions of students, including myself, a crippling disadvantage in entering the workforce. I blame that system — and every single leader in our education system — for the incredible head start you gave to the private school children, including the sons and daughters of the 1%, who were taught core financial concepts that were reinforced throughout their childhoods.

Related: 6 Lessons My Work Life Has Taught Me About Managing Finances

It has taken me years of self-study to develop any semblance of understanding on personal finance. I shouldn’t have had to do that on my own time. You should have taught me.

I graduated from high school not having been taught the following:

  • What “investing” actually means
  • How to balance a checkbook
  • How to prepare taxes
  • How to set up a brokerage/retirement/checking account
  • How to calculate ROI
  • How to apply for a loan
  • Pretty much everything else related to money

Like it or not, in our capitalist society, food, shelter, transportation, wealth, and power stem largely from one thing: money. The fact that we don’t absolutely mandate the education of all things money through the duration of our children’s schooling is totally mind-boggling. Apparently, I’m supposed to compete in the economy to earn money and build a portfolio for the duration of my life with zero formal preparation.

What is the purpose of education? To prepare children to contribute to society? To prepare them to take care of themselves? To prepare them to further industry? What is the single most important thing that they can learn (aside from basic forms of communication and mathematics)?


The Importance of Starting Young

I also want to point out that it’s an open secret that human beings learn best at an early age. Try teaching people to speak English at ages 4, 8, 12, 16, 20, and 24 — I’ve got a good guess as to which individual from that list is going to speak the language more like a native.

Or look at our famous athletes. Yes, some of them are naturally, beautifully, and outrageously talented. But even among that select group, even with athletes that win the genetic lottery, I’d bet that they still might not have be able to perform at that pinnacle of athletic prowess had they not started practicing and playing at an early age.

Here’s a surprise (read: not actually a surprise): 60-70% of NFL players played pop-warner football at an early age. The NBA, MLB, NHL, etc. exhibit similar patterns. Yes, there are exceptions, but I’d argue that professional athletes who pick up their trade later in life, even past the ages of just 12-13, are just that: incredible exceptions — and not the rule.

Early education is just as important with finance. Wealthy children are some of the only ones to play this “sport” starting very young in life, yet we all have to play it for the duration of our lives. 60% of the Forbes 400 come from “substantial privilege” — funny how that is remarkably close to the number of NFL players that started young.

The article that provided the data on the Forbes 400 calls these “self-made” aristocrats “the hallucinating rich.” I think that’s a little harsh, but it certainly seems that, even if these tycoons didn’t inherit their net worth, they inherited their parents’ wealth of knowledge on the subject of making and investing money — which is just as valuable and just as rare.

So, what’s my point here?

Assuming that we’ve agreed upon the paramount importance of the study of money and on the incredible statistical advantages of early education on success in a given field, the next question is this:

How can we remedy educational inequality and give every child a chance to compete fairly with the children of the 1% in terms of financial literacy?

The answer is very simple: We have to mandate education of this subject to the children in our public schools.

Even a lousy financial education would have set me up to compete in the economy better than my excellent education in subjects like advanced biology, calculus, chemistry, literature, history, art, etc. How is this missed? I truly don’t understand: Why is this critical component of our children’s education missing?

Having researched and debated this topic extensively, there seems to be three reasons that finance is not taught in any material fashion at public schools. Just in case you weren’t able to infer my opinion on the subject already,  I think these reasons are silly and hope that you aren’t surprised that I attempt to systematically dismantle the logic behind them.

3 Reasons to NOT Teach Finance (With Rebuttals)

Reason Number 1: “It’s the Parent’s Job to Teach Finance!”

I’ve often heard it suggested that Financial Education is the job of parents, not schools. In my opinion, that is a ludicrous proposition. Think about this: 40% of American households will never exceed $10,000 in net worth. How the heck can these parents who have never and will never master basic finance give their kids a competitive education in this field? Are you kidding me?

I don’t have the stats on this one (I tried!), but how many parents have the capability to pass a basic personal finance course? How many can teach an advanced course? Are you telling me that those are the people that are supposed to teach children about money?

The shame of it all is that the children of the financially illiterate will one day be forced out into the real world to compete with the children of the 1%, children who were given a lifelong education on the study of money by experts (assuming that you agree with me on the definition of “expert” being “someone in the top 1% of his/her field”). Who do you think is going to win in a life-long wealth-creation competition — and by a wider and wider margin with each passing generation?

It’s not fair.

If we can’t expect parents to teach their children to read, do arithmetic, or teach science, history, or language, then it is ridiculous to ask them to teach their children a subject that is arguably even more important AND that they’ve never learned themselves!

Reason Number 2: “Finance Will Bore Our Kids to Tears!”

I’ve also heard that there are some people out there who think that finance is boring, that it is a study children might not enjoy, and that they might not comprehend. I have a much simpler rebuttal to that point:

Too bad.

A lot of kids don’t like ANY courses in school. We make them take those classes anyway, even if they don’t like them, aren’t good at them, or don’t understand them at all. That’s because we believe that these are important. Well, what about money matters? How can they not be at or near the top of the list of subjects we consider critical to our children’s development into effective citizens?

I’m not suggesting that other subjects aren’t important, but I am suggesting that we squeeze them, shorten them, or otherwise give finance just as much priority, if not make it a central focus of our childrens’ education, just like language, math, and science.

Reason Number 3: “Finance in Schools Just Isn’t Feasible!”

The last dismissal of personal finance in public schools I’ve heard is that implementing system change is nearly impossible. Apparently, there will just be too much controversy over curriculum development, a lack of teachers qualified to teach the subject matter, and a bureaucracy with too much red tape to cut through for serious change to be worth it. I think that these arguments are amazingly simpleminded.

First of all, finance is not a controversial subject. It’s just not.

Here are a few subjects that are actually controversial:

Try telling me that your interpretation of sound financial strategy vs. mine is going to be more controversial than the subjects above. I don’t believe you. Finance all comes down to Earnings, Expenses, and Investments. The strategies involved in mastering each of those categories are just that — strategies — and can be taught without bias much more easily than history, language, or even science in many cases.

Second, finance curriculums have already been produced; there are dozens of courses out there already, and I’d argue that even a bad financial course is a huge improvement over no course at all! Luckily, we don’t have to choose from bad courses.

Here are three courses that teach basic personal finance that are AWESOME, and FREE (sorry, I’m a Coursera fanboy!):

Are you telling me that a professional educator, someone who has spent years studying childhood development, can’t alter the material in these courses in less than a year to make them worthwhile for children of all ages? The best part of all this is that because we have “the internet,” every teacher in the country can learn the material remotely prior to delivering it to children in the classroom.

Finally, there’s the bureaucracy argument. Admittedly, the school system and teachers’ unions can be an obstacle to implementing change. I think that this one comes down to making the issue a priority. It’s simple laziness to blame this on the bureaucrats.

Related: 10 Things Only Personal Finance Nerds Would Understand

If you are on BiggerPockets, you understand the importance of financial education, but you might be surprised to hear that the rest of America agrees! Time magazine reports that a staggering 99% of Americans believe that personal finance should be taught in high school. That’s it right there, folks: the people want it. They just don’t want it bad enough. I hope that this article makes even just a handful of you want it a little more.


Income Inequality is a massive problem in the United States. I fundamentally believe that. I think that it becomes a huge societal problem when too much power is concentrated in the hands of too few. Further, I don’t believe that income inequality is caused by people getting paid too much (though some are) or because sleazy bankers are screwing the rest of the country (that’s part of life; get used to it).

No, the fundamental problem causing the widening income gap in the United States is this:

99% of us don’t know the first thing about basic money management. We don’t create the wealth that the 1% do because we weren’t taught how.

If you were taught finance, and you weren’t born into privilege, it’s probably because you taught yourself — though I’m certain there are many parents out there that did a fine job in spite of limited means. If you did teach yourself, you are at a HUGE disadvantage to the children of the 1%!

The mistakes they made decades earlier than you and the knowledge they possess from years of being around finance and wealth creation give them a very measurable advantage… which perpetuates to make an even larger compounding difference in the next generation!

That is simply not fair. Everybody deserves to start life with the same opportunity to access that knowledge and experience.

There is some good news though: this is a very correctable problem. Are you ready for the long-term solution to income inequality?

Here it is: Teach Finance.

Looking to set yourself up for life as early as possible and enjoy time on your terms? Scott Trench’s new book Set for Life, slated for release April 23, 2017, is now available for pre-sale! Whether you’d like to “retire” from wage-paying work, become less dependent on your demanding nine-to-five, or simply spend time doing what you love, Set for Life will give you a plan to get there. This isn’t about saving up a nest egg. It’s not about setting aside money for a “rainy day.” Set for Life is an actionable guide that helps readers build the accessible wealth they need to achieve early financial freedom.

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What do you think: Should finance finally be added to school curriculums? If you disagree, I’d love to hear your argument!

Don’t forget to leave a comment below with your thoughts, opinions, arguments, support, etc.!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.