It is registration time at a big comprehensive in Edgware, north London. Today, like every morning so far this term, the sixth form girls sit around chatting in twos and threes while most of the boys are in one large huddle.
“I’m up over £100 in one day, bitches!” a boy in the centre crows. Others proclaim their gains in a conversation peppered with the words shiba inu, dogecoin and Elon Musk.
Their form tutor, a recent history graduate, looks on with a growing sense of unease. “Isn’t trading cryptocurrencies just like gambling?” she asks them.
More than half the boys in her class are Muslim and gambling is not something the Koran looks on kindly. The student in the middle gives her a scornful look. “Nah Miss,” he says. “It’s investing.”
This boy has failed to show much interest in schoolwork over the years, but here he is, the Gordon Gekko of form 13J. He spends all his time on TikTok, Instagram and YouTube absorbing tips from dubious celebrities, which he then passes on to his disciples.
God help these boys, their teacher says to me later, if they are putting their money at risk on advice from this particular student.
Similar scenes are playing out in schools across the country as teenage boys — girls seem almost entirely unmoved by this latest craze — buy and sell cryptocurrencies. It is not hard to see why they have whipped themselves into such a frenzy. There is the cool language of technology and an endless drip-feed of hype on social networks. Digital currencies are thrillingly anti-government and rebellious, but the best thing about them is their promise of easy, instant money. Bitcoin has gone up from £600 to £45,000 in five years — a rise of 7,400 per cent — and to the untrained teen mind this is all the evidence needed that the rise will continue.
The fact that it is also illegal for minors to trade cryptocurrencies on most platforms may add to the attraction, but either way makes no difference to the ease with which they are doing it. Some have persuaded parents or other adults, many of whom themselves are financially unsavvy, to set up accounts for them. Others buy the coin at ATMs or exchange Amazon gift cards for bitcoin.
Ibrahim is 15 and is at the sensible end of the spectrum. He lives with his mum — who is strict and doesn’t let him go on social networks — and he is working hard in order to be a doctor or a pilot when he leaves school. But one evening last summer he was scrolling through videos on YouTube and came across Brian Jung, a college dropout who had just made $100,000. He got interested, and talked his mum into opening an account.
“I explained cryptocurrencies to her,” he tells me. “She’s put some of her money in too.”
He takes me through their portfolio. They have invested £50 in dogecoin, £180 in bitcoin and £50 in cardano; their total holding is currently worth £408.
Every morning before he gets out of bed he checks his investments on his phone. Every evening he spends 15 minutes watching videos, to educate himself. I ask if he would invest on borrowed money.
“No!” he says. “That would be way too risky.”
What Ibrahim is doing is impressive. In just four months he has taught himself about diversification, about market volatility and transaction costs. He knows far more about cryptocurrencies than I do and in some ways is more sophisticated about investment. Yet hearing him talk I still feel anxious — he does not seem aware that he is risking sums his household may not be able to afford to lose.
I ask how he would feel if the market crashed and he lost everything.
“Sad,” he said, but then he added: “but that’s not going to happen — if it goes down one day, it’s going to go up again.”
I’m not the only teacher who is looking on with concern. Pani Matsangos, an assistant head at a comprehensive in east London with 15 years’ experience teaching economics, thinks an urgent change in schools’ approach to teaching children about money is needed.
“Financial literacy has always been important for social mobility, but 10 years ago the world was simpler. When kids got their first pay cheque, they could mostly work things out themselves. Now young people need much more support to navigate a rapidly changing system — especially to deal with predators trying to reach them on social networks. You can be on your mobile, giving away money that isn’t yours to crypto scammers. This is new and we need to do something about it.”
He is also worried about how school children are being duped into becoming money mules — allowing stolen money to wash through their bank accounts in return for a fee. He knows of 10 of his more vulnerable students who in recent years have fallen prey to the irresistible lure of money-for-nothing — though he thinks the true number may be higher as it isn’t something they brag about.
“I’ve had a kid come to me and say he can’t be in for a lesson because he needs to go to the bank and sort something out,” Matsangos tells me. This boy was risking a criminal conviction, a permanently damaged credit record and an inability to open a new bank account — by dint of having walked into a situation that no one had ever warned him against. Safeguarding rules have recently been extended to include the practice known as “county lines” — where children are used to sell or just transport drugs in suburban or rural areas outside where the gangs are operating — but there is little mention in any safeguarding training about money mules or financial scams.
In some ways the task of turning children into financially literate adults should be a doddle as it goes entirely with the grain: the subject of finance interests most of them considerably more than photosynthesis or the Tudors — or most other things on the school curriculum.
When I became a teacher four years ago I was struck by the rapture with which my students discussed money. When I was growing up in the 1960s and 1970s it was never mentioned — partly because we had enough not to have to fret about it but also because back then money wasn’t considered a polite topic of conversation.
By contrast my students, most of whom come from less privileged backgrounds, mention it constantly. They admire money and they want to have more of it. Every well-known person who turns up to give a talk to a school can expect the first question they will be asked is how much they earn. Last September I started teaching at a girls’ comprehensive in Tower Hamlets and it took barely a week for the most outspoken girl in my tutor group to pipe up: “Miss! You’ve got a Wikipedia page! What’s your net worth?”
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This openness about money is good in itself — and it seems to make students more inclined to concentrate on their schoolwork. I once asked my students why they bothered to do their homework. Was it to impress me? To avoid a detention? No, came the answer. It was to be rich in later life.
Another time I showed my class a news story about Denise Coates, the chief executive of Bet365 who had just been paid £421m for a year’s work. I had expected a shocked response, particularly as half of them were on free school meals and therefore had annual family incomes equal roughly to what Coates made in 20 minutes. Instead, not only did they think she deserved her salary, having worked for it, but the sight of her earning so much would be a powerfully motivating force to the people on low pay who worked under her.
Faced with students so hungry to learn about money, schools generally fail to provide them with much to get their teeth into. In my old school most teachers did not feel their own financial nous was up to doing any teaching about money at all. Once I was approached by a colleague who organised assemblies and asked, in a panic, if I could do something about student finances for the following week. I cobbled together a hasty 10-minute presentation about budgeting and pocket money. It was just about OK, but was a drop in the ocean of ignorance.
Financial illiteracy begins even further back than not knowing how to budget. Students’ great interest in money seems to be matched by an equally great ignorance about what money is worth. A few weeks ago I was teaching Year 12 economics students about Veblen goods — for which demand rises as prices rise — and told them I’d once been sent by the FT to review the most expensive hotel room in London.
I asked the class to write on mini whiteboards what they thought this might cost — one wrote £56 a night, while another thought it would cost £500,000. When I told them the correct answer was £42,000 there was none of the shock I was expecting — with no benchmark against which to set such a sum, they had little way of judging it.
Bobby Seagull, FT columnist and maths teacher, recently asked his Year 11 class to guess the average salary in the UK. The students, whose minds were full of footballers’ pay and general bragging on social networks, put the average at about £80,000 — nearly three times the correct median figure of £30,000. Last month, I surveyed my Year 12 tutor group, where the girls are mainly from traditional Bengali families, and found their knowledge equally shaky. When asked who earns most, bankers or nurses, nearly half the class thought nurses did.
Not only do they not know what money is worth, they don’t understand interest, let alone compound interest — which is odd as both are part of the maths GCSE curriculum. I put to my tutor group the following easy question: how much would £100 in a savings account paying 10 per cent interest be worth after five years? Presented with the possible answers a) more than £150 b) less than £150 or c) exactly £150, an astonishing 60 per cent picked the wrong one.
Most of these girls can do the sums within the context of a maths lesson, but when it comes to applying their knowledge to the real world they don’t know how to begin. This suggests compound interest needs to be retaught, not just in maths but as a practical skill that could help them better manage their money.
Even more challenging is teaching school children about risk. Here their interest in money gets in the way: such is the desire for profit that dry warnings about losses have no impact at all. One day last year I gave a lesson to GCSE economics students on GameStop, the struggling games retailer whose shares had been skyrocketing in a David-and-Goliath short squeeze. I explained to the class short selling. I explained that this was turning into a giant Ponzi scheme. I showed them the steeply rising share price graph and asked them to put up their hands if they would invest now. Never mind all my warnings, the hand of almost every child in the class shot up into the air.
My half-baked lesson on risk may have failed to teach my students anything, but it taught me that this is too important a subject to be covered on the hoof. Lessons need to be properly designed to work around all the behavioural biases that make children (and adults) so bad with money. Students need to be shown real case studies of people like them who have taken bad risks and lost money. They also need to learn about people who have made money, not miraculously overnight, but slowly. Above all, they need to be taught systematically what money is worth. Only then will they be ready for the most urgent lesson of all: if something looks too good to be true, it is too good to be true.
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