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FT readers respond: Cryptocurrency in the classroom

As part of the FT’s Financial Literacy and Inclusion Campaign, Lucy Kellaway wrote about a trend in UK schools — young people buying and selling cryptocurrencies.

In her Weekend FT article “Crypto in the classroom: Lucy Kellaway on the kids’ new craze”, she tells of the rising enthusiasm shown by pupils when talking about such investments. One student boasted he “made” £100 in one day on his holding.

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This article is part of a series of pieces written for the new FT Flic charity which will develop educational programmes to boost the financial literacy of those most in need.

Financial literacy education gives young people the foundations for future prosperity — and can help economically disadvantaged people out of deprivation. Join the FT Flic campaign to promote financial literacy in the UK and around the world

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Kellaway makes the point that schools generally fail to engage pupils when it comes to learning about money. Lessons need to be properly designed to work around the behavioural biases that make children (and adults) so bad with money, she says.

The article launched a debate among readers on ways to help schoolchildren understand money. Suggestions ranged from fantasy portfolios to encouraging children to take up part-time jobs and using games such as Minecraft to capture young people’s interest in finance.

Many commenters shared lessons from their own experiences and how they teach their own children about money.

A range of reader comments that appeared on our website and social media posts are published below and we invite you to continue the conversation in the comments.

Compound interest

Particularly enlightened parents may see an opportunity to encourage their kids to go deeper — to figure out how to stake or yield farm the crypto they have bought, so that they can actually make the 10 per cent interest that Lucy talks about (in fact they can make more — 17 per cent on the Avalanche network at the moment for example). And then teach them about compound interest. — SkyBlazer

Kids need to adapt to a new world

Kids used to be able to put their savings in a bank and see it increase through accrued interest. They could forget about it most times and get on with their lives. Like most adults, by the way. Central banksters have done away with that system.
Kids, as they always must through the ages, have to adapt to the times; so it seems a bit absurd to let them do sums with 10 per cent interest. Rather, kids nowadays should do sums which combine negative interest, inflation, and the taxes on their savings, so they understand how their hard-earned money dwindles away rapidly when they don’t gamble — pardon, invest — in something, be it crypto, shares, whiskey, non-fungible tokens or art. — Berend Veenema

Practice portfolios

When I was in school, at about that age, we had fake investment accounts. We were given a specific amount of money, and had to “invest it”, based on newspaper clippings. We then had to keep track of the money we invested, gained or lost value from, or if we wanted to change our investments. Then we wrote it all up.
Now, kids don’t need newspaper clippings to track stocks, they can do it real time on their phones, but it seems like it would still be a good lesson. — covertaction

Cash is risky too

The difference between gambling and investing may simply be down to volatility of the underlying asset. Crypto is not like betting on a horse, where you know it will either win or lose. There is massive volatility but unfortunately it is wiser to take the chance than keep your money in bank accounts earning 0 per cent. The only reason that some retail investors of modest means became rich was because of the crypto volatility. The touting of the illustrious effects of compounded interest is the other side of the coin of the devastating effects of zero/negative after fees interest rates, but we don’t take that seriously enough. I kept my money in safe stuff and in the end that was a bigger gamble than crypto. Those kids are much smarter than we give them credit for. — Ruled Britannia

Mixed feelings over crypto

One of our kiddo’s friends just cleaned up on crypto. He ended up making enough that so he won’t need to work for years.
So, whatever I say is taken in the context of that situation. Had we also allowed our kiddo to invest in crypto he would be able to buy a plane now. Instead, he is working hard, and earning good money.
So I have mixed feelings about crypto and kids. It will be part of the world where they live for a long time. They need to understand it, and they need to understand it better than we do.
Allowing them to take some small risks makes sense. Just as in sports, there is a small risk of injury that helps children learn boundaries, I think that is helpful in financial literacy. — covertaction

A bubble?

For equities they used to say “when I hear my cleaner or my taxi driver talk about which new stock to buy this is a bubble’. We are now way past that with crypto and we have schoolchildren (!) that don’t even understand compound interest talking about “investing” in bitcoin. — Politically Correct

Learning through Minecraft

My children are learning financial literacy in Minecraft. One of the modes actually has a futures market that can be cornered. — Apparently useless at everything

Running a small business enterprise

Another interesting article. Maybe we should try and have the kids in your school run small business enterprises as a way to learn about money? My son and his friends educated themselves very fast by running a scheme of buying fizzy drinks at the corner shop and reselling them at school — supply chain disruptions, sales and incentives to move product and splitting profits while reinvesting in the business. These were valuable lessons, with less than £20 at risk at any time, and it all wrapped up amicably with enough cash to buy candy for a week all around. — Grizzlybear

Use Pokemon to get children interesting in arbitrage

This is a great idea — my son did the same with Pokemon cards about two decades ago. The concepts of arbitrage, margin, opportunity cost and trend spotting, and the importance of business relationships are also learned too! — Censors hate this one user!

The value of money

I’d start a lesson on the value of money with the obvious point that, in and of itself, it is useless. Money is only useful when you can exchange it for something else. So, whenever thinking about money (how much you need, what risk you are prepared to take) you should think in parallel about what the money will be used for. And this isn’t a bad time to remind kids that money can be exchanged only for a very narrow set of things (goods and services), and not for the things we most value in life. — InHK

Life lessons

I always wondered how much difference it would make if “what money is worth” were drilled into children at the earliest appropriate age. Many kids drift along at school being thoroughly mediocre and I suspect they partly do this because they believe mediocre equals a comfortable life with a big house, nice car and no financial worries. I wonder how many would change their behaviour if they knew that mediocre equals a life of hard miserable work to just about scrape enough together for a decidedly non-luxurious existence. User Formerly Known as 9725656

Encourage part-time jobs

As a parent I was also concerned that our children learn the value of money at an appropriate age. From my own experience as a youngster, I found that having a modestly paid job is a great way to learn the value of money. As a mid-teen I got a weekend job, paying 20p an hour serving petrol, a reasonable rate at the time. The sheer number of hours at work it took for me to save for a cassette player was a great way to learn the value of money. — ConnDublin

Learn from mistakes

I think it’s great. Yes, losing hurts, but there’s no faster way to learn. I believe the young naturally have higher risk tolerance because, biologically, they are driven to experiment, and through experimenting and receiving feedback, they learn how to operate in the world. Better to let them trade, win and lose, than to be paternalistic and grow up without learning about how to manage their finances. A youngster who loses a few hundred quid but is financially aware as they embark on their career has a very bright future. Cdn Abroad

Fantasy stock market

Fantasy stock market investment would be a better way to teach kids about compounding, dividends and the power of long-term investment in rent-producing assets. — xchaotic

Pythagoras

A great article. Teaching children about money and how to manage it is much more useful than learning about Pythagoras and his theorem — Nick The Greek

School of life

Excellent article. And very well written. The whole school curriculum should be adapted to make it more relevant to life: from food to money and economics to literature. — MissMarple

Benefits of diversification

When I was at school I ran a book taking bets on horse races. Two races wiped me out. Until then, I’d made steady profits. It was a harsh, but instructive lesson in risk. Since then I’ve never gone all-in in one asset class. Diversification of total wealth, a job with good, reliable income and investing to get rich slowly deliver financial peace of mind. Global Enlightenment

Young people understand crypto

If interest in crypto can encourage kids to learn about money and managing risk that must be good. Although, like all great manias, there won’t be many who retain their gains in the end. But who’s to say it is just a mania? There’s a lot of development going on in the decentralised finance space with real-world implications. And it seems to be mainly the young who can grasp it. So good luck to those who get into crypto and can understand the space well enough to see how it might change things. It might even upend some of the inequality inherent in the current world order. — DM

Useful book to read

I recommend Usborne’s Money for Beginners book. It’s really good and communicates quite complex topics well, even covering some things at economics degree level. My son has read it a lot, but it would be a very enlightening book for most adults as well. — anon.ac.uk

Tomorrow’s history

Kids will be learning this lesson of how the crypto markets crashed in years to come. Tomorrow’s history. — Northern Socrates

Easy money

Beware of easy money; easily gained, easily lost. It’s OK to have some in the portfolio, but don’t forget to balance it with some of the harder kind. — Working EU

Parents should be role models

Parents should show their children how to save. There are ways to do that in an old-fashioned way, through junior Isas. — A window watcher

Technology is attractive

We need to understand that these kids are interested in crypto not just for the money but the technology itself, as the latest thing and there’s no doubt this space will grow. They may just end up living in a tokenised economy, so it’s better they learn about it now, even if it means losing a few hundred quid. — TheMajor

*Comments have been edited for length, style and clarity

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