Sunday, June 21, 2015
The Washington Post carried a story on June 21 titled “Where broke millennials go to learn aboutmoney – Financial planning for grownups.
In it its author Jonelle Marte, writes about a wine-tasting meeting organized by the Society of Grownups, in which “Stephanie Labelle was busy jotting notes as financial planner Jena Palisoul explained compound interest”.
And I was left wondering about how you go about and explain the benefits of compound interests, in times of zero or even negative interest rates.
Also, if I had been there to advise these young adults on the best way to guarantee their future I would, without a shadow of a doubt, told them to get rid of current bank regulators with their senseless risk-aversion.
The currentcredit-risk-weighted capital requirements, make banks invest in assets much more compatible with the investment needs of a retiree with very few years of life expectancies, than with those of young grownups… those who needs banks to finance “risky” SMEs and entrepreneurs, in order to have the economy going and generating jobs.
Actually I would suggest the Society of Grownups writing the regulators a kind letter reminding them that major bank crisis are never ever caused by excessive exposures to what is perceived as risky, but always from too large exposures to what has been erroneously perceived as very safe.