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Ryan Bridge: The path to improving financial literacy · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: I see ACT as buying a bit of a kite
• 0:02
  Speaker 1: on free money for school kids, which sounds a bit
• 0:05
  Speaker 1: odd because they have an aversion to giving free lunches.
• 0:08
  Speaker 1: But here we are. Seymour's talking about giving each year
• 0:11
  Speaker 1: eleven student that's your fifth formers five hundred bucks each
• 0:15
  Speaker 1: to invest. So the whole thing would cost about thirty
• 0:18
  Speaker 1: million dollars a year. Could be funded he has suggested
• 0:22
  Speaker 1: via the Kiwi Saver subsidy, and they'd be able to
• 0:25
  Speaker 1: invest in a term deposit. So term one you go
• 0:27
  Speaker 1: term deposit, Term till you go manage fund, and term
• 0:30
  Speaker 1: three you go equities. It'd be a controlled fund, so
• 0:33
  Speaker 1: they couldn't just go nuts or withdraw the money, but
• 0:35
  Speaker 1: they might learn something. Trump's done a similar thing in
• 0:38
  Speaker 1: the US, although they've had the help of private capital
• 0:41
  Speaker 1: to fund this. This is a great way to get
• 0:44
  Speaker 1: young people interested in investing and learning about investing. There's
• 0:48
  Speaker 1: no doubt about that. But isn't there an inherent problem
• 0:50
  Speaker 1: with this? Giving them free money doesn't teach them the
• 0:54
  Speaker 1: value of earning it in the first place, the value
• 0:57
  Speaker 1: of a dollar, which I would have thought was central
• 0:59
  Speaker 1: to act philosophy on life. I spoke to Fraser winner
• 1:03
  Speaker 1: A a couple of months back now for a Mercury Boss,
• 1:06
  Speaker 1: and he's got this idea for Kiwi Saver two point zero.
• 1:09
  Speaker 1: He reckons we should overhaul Kei we save it. Give
• 1:12
  Speaker 1: every newborn KIW kid five thousand dollars instead of giving
• 1:16
  Speaker 1: adults the two hundred and fifty bucks or whatever it
• 1:18
  Speaker 1: is that they currently get from the government and the
• 1:21
  Speaker 1: key We Saver subsidy, give it all to the kids.
• 1:25
  Speaker 1: With compounding returns, that twenty five grand or that five
• 1:30
  Speaker 1: grand I should say, becomes about twenty by the time
• 1:32
  Speaker 1: you're eighteen. The lesson is simple. Time in the stock
• 1:35
  Speaker 1: market equals money in the bank. Whether it's acts or
• 1:39
  Speaker 1: phrases approach probably depends on how you look at it
• 1:43
  Speaker 1: and how you view the trade offs, but there's no
• 1:46
  Speaker 1: doubt in my mind that they're both on the right path.
• 1:49
  Speaker 1: We need to improve financial literacy, not just for the
• 1:52
  Speaker 1: sake of our kiw kids, but for the sake of
• 1:54
  Speaker 1: the whole country. Really. For more from early edition with
• 1:57
  Speaker 1: Ryan Bridge, listen live to Newstalk it'd be from five
• 2:01
  Speaker 1: am weekdays, or follow the podcast on iHeartRadio.