A Two-Week Curriculum

Besides saying real estate is usually a terrible investment, nothing irks people more than when I say personal finance shouldn’t be taught in school.

The proposed curriculum is always the same: budgeting, compound interest, taxes, blah, blah, blah. Most teenagers don’t care.

This doesn’t need a week of education.

But behavioural finance should be taught in school. All you need is two weeks to teach overconfidence bias and confirmation bias. The sooner people learn about them, the better.

How do you tell an overconfident person that they’re overconfident? You can’t. They know better than you. You’re a dumb-dumb.

Wealth management is rife with overconfident people. And the overconfident ones, for the most part, are the loudest. It’s how the content machine works.

“We think this [insert stock] is undervalued and we’re buying the snot out of it. You should too for all these reasons. If you don’t, enjoy dying poor. Oh, and I heard the negative things that other pundit said about [insert stock], they just don’t understand it.”

And it’s never their fault when they’re wrong. They go away for a short while, probably to read some articles or watch some YouTube videos telling them about how smart they are.

Confirmation bias is everywhere. Whenever a client contacts me about a specific investment idea with a bit of narrative attached, I can usually tell them what their social media algorithm has been feeding them (is that overconfidence on my part?).

Here’s how confirmation bias works. Take a strong position in something. Because I’m writing this on a wealth management site, let’s say our strong position is that TD is a good investment.* We’re going to Google (or prompt AI) the following: “Is TD a good investment.” Then we’re going to read only the positive things we find, tattoo that information on our brain, and then not even bother asking the opposite question. “TD is a good investment. The internet (or Claude) told me so.”

These two biases aren’t exclusive to wealth management. Every sports fan, political junkie, and person who comments on reddit or YouTube has them. And that’s why they should be taught in school.

Teach people about themselves and how their brain works. Don’t show them how to write out a budget.

*This is, of course, not even close to investment advice. I’m using it as an example only. See the disclosures at the bottom of this page.