Standout Recipe for Financial Literacy Excludes Big Business
Most financial literacy programs are burdened with a fatal flaw: the financial institutions that sponsor them are the same companies known to take advantage of their unsuspecting customers with hidden fees and exaggerated claims. Little wonder the public comes away having learned nothing about the caveats of investing.
But a standout success story is the work being done at FoolProofMe.com, a free online financial literacy curriculum for schools and individuals that has no links to household name banks and brokers. Middle and high school students made over 24 million page views of FoolProof's curriculum in 2014, and in Oklahoma, FoolProof's main test state, 20,000 students are using the site.
MainStreet spoke with FoolProof's volunteer chairperson, Remar Sutton, about the company's school curriculum and its insistence that financial institutions get no say in how the curriculum is crafted.
Why It Began
Q: You launched FoolProof's site for teachers and students in 2012. What motivated you to put the site together?
A: As we looked at all the things out there, none taught defensive thinking. So we tried to develop a high school curriculum from scratch starting in 2008.
Q: How many people are on staff?
A: Nine full-time and four part-time. The average salary is about $30,000.
Q: We've read that the late television news anchor Walter Cronkite had a big influence on FoolProof's direction.
A: Walter felt strongly that it's the underserved who can least afford to be hurt who are hurt the most. And he immediately focused on the problem in financial literacy: That the people who are teaching it are conflicted, so the messages that must be taught are not taught.
Q: What's your take on the programs that are out there?
A: The banks do some things wonderfully well. They teach you how to fill out tax forms (for example). But that's not what people need to learn. They need to learn to question.
How Other Programs Fail
Q. Give me an example of what the big financial institutions are doing wrong in their literacy programs.
A: The way they present credit cards is worthless to the person wanting to make a smart decision. They will never say, 'The reason we advertise -- and the only reason we advertise - is to get you to charge more than you pay off each month. " And do you really think Bank of America is going to tell you 'Don't finance with us if our mortgage costs more?'"
Q: So their programs are flawed?
A: Do we think they're out to destroy the world? No. Do we think they hurt people? Yes. Of course the programs haven't worked. They can't if you don't teach critical thinking.
No Idiots Allowed
Q: How is FoolProof different?
A: It instantly tells you that you can't trust what you see. No big-bank financial literacy program does that. Our concept is that advertising has a role in a free enterprise system, but you can't believe what it says.
Q: I read that high school students have a favorite FoolProof module -- the one on credit card debt. The young person who appears in that video says "Only idiots blindly accept advertising. Don't be one of those idiots." Why is this one such a favorite with teenagers?
A: Kids don't want to be fooled. That video is all about how credit card companies are going to make a fool out of you. Kids start out so thrilled about the idea of getting a credit card. And then we shock them.
Q: The securities industry's main lobbying group, SIFMA, runs a stock market game for grade school kids. The association cites a 2009 study that shows kids' math scores went up after they played the game. What about that?
A: They do have better math scores. But they're not being trained to be better spenders or how to invest. What they are not saying in their PR is those kids will make as many mistakes as other kids.
Comedy or Tragedy?
Q: SIFMA also has a program in which Wall Street executives visit kids in their classrooms and talk about investing and the economy. What's your opinion of that?
A: It has to be funny because if it's not funny, it's tragic. I don't know any other way to put it.
Q: FoolProofMe's lessons include some tough jabs at the financial industry. You say in one module that you think the average payday lender is a slime ball. Have you gotten any lawsuits or complaints from the companies you criticize?
A: Absolutely none, ever.
Q: Have big banks or brokerage firms ever approached you, wanting to be financial supporters?
A: No, they haven't officially. I think our messaging is so strong that I don't know how that could work. Some businesspeople were having dinner with me in New York in February, and they said "We could get you money if you just changed this little thing." All of the team said "Absolutely not."