Recently somebody sent me the syllabus that the Government of India expects a kid in class 8 to know. I mean the syllabus was a part of the National Financial Literacy Assessment Test (NFLAT).

Before I saw the syllabus I wanted my daughter to take the test. She is in class 8, has read a couple of books in finance and has heard words like mutual fund, bank, life insurance, etc. and has some rudimentary knowledge about all these terms. When I saw the syllabus, I changed my mind. Completely. In fact the syllabus put me off so much that it took me a long time to do this post!

My view:

The syllabus is just too vast: Knowing the role of ALL the financial regulators!! Imagine that. If I were the FM, I might just shut down all the regulators. Even if the people were to ask me “Are you serious” I would live with that.

Budgeting: Necessary and Useful, but to expect the kids to know words like Opportunity Cost is perhaps unnecessary.

Risk: Do children need to know about risk transfer mechanism? I struggle teaching these kids about risk – and it is easy to tell them about skating and the need to wear helmets, knee pads, etc. To explain concepts like risk pricing is not just ambitious, it is foolish.

Insurance Terminology: This is such a joke!! the industry does not have a uniform nomenclature. What will you teach Mr. NFLat? Face value, Sum assured, etc. are inter changeable. And why should a kid know all this, please?

“Diversification as a Risk Mitigating device” – amusing to say the least. It is easy to explain diversification – but to bring such kind of academic stuff looks so unnecessary.

I could just go on and on and on. I have no doubt that like all political things this too was started with good intentions…but lost its way.

In my training life I have trained upwards of 35,000 IFAs and bank employees selling wealth products. I can assure you with this syllabus MOST of those students would fail a test.

Knowing all this WILL not make you a great investor – this is just the starting point, BUT all this cannot (repeat cannot) be taught to a 14 year old kid who needs to know the following:

– how the BFSI can s….w her money

– why the bank will ONLY sell shit

– why the agreement that they signed with the builder is as useful as the toilet paper

– why a life insurance product should not be mixed with a wealth creating instrument

– how in the LONG RUN a mutual fund can be far MORE expensive,

trying to make a CFA out a class 8 student is a great idea….:-)

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  1. No surprise here Subra. This is how the Indian education system is ‘by design’. They end up imparting useless knowledge instead of imparting useful skill.

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