In school our kids are taught a lot of subjects, but financial literacy is not one of them. What is the value of money? What is the time value of money? What is the difference between simple and compound interest? The teaching of financial literacy, like morality or patriotism, is a parental responsibility. How are we doing? Surveys show most Americans live paycheck-to-paycheck and do not have enough money on hand to cover even a $400 emergency.

Recently I was in the middle of a business lunch meeting when a young restaurant employee approached the table. He had overhead me discussing investing concepts. He was intrigued by the pie charts, etc. and wanted to know more. I was inspired by his sincerity and hunger to learn. “Here’s my card. Call me.”

I hope he calls me because I genuinely want to help him. I would start by laying the foundation of why it is important to defer consumption today to save and invest for the future. Anyone can do this. You can get started with any dollar amount. Let us assume you contribute $100/mos and earn a compounded return of 7%/yr. After 20 years you would have over $50,000!

I would also explain to him the role of capital markets. Stock markets exist to match companies needing to raise capital through the issuance of stock (equity) with investors (owners). Similarly, bond markets match borrowers needing to raise debt capital with investors (lenders) desiring interest income. US capital markets are the best regulated and most liquid in the world.