The Colom Foundation and Primerica Financial Services team up to increase young people’s financial education

The state of the economy figures prominently in any news report these days. Whether the focus is on the stock market, the national economy or tax cuts, a working knowledge of finance is needed to understand the world around us. Unfortunately, many young people lack financial understanding.

The Colom Foundation and Primerica Financial Services are joining forces to address this gap in children's education by establishing Investment Clubs in each of Mississippi's 16 Boys and Girls Clubs.

The idea for the clubs is not a new one, said Wilbur O. Colom of the Colom Foundation.

"This was an idea we have had for several years," Colom said. "With Deborah Schumaker's help, we have made it a reality."

The program came into being after the Colom Foundation contacted Primerica with the idea.

"We knew this was something the Colom Foundation had been working on," said Primerica spokesman Tony Dean. "We were in the process of doing some financial education programs for high school seniors around the state, and when our headquarters heard about this project they thought it sounded promising."

There is no question that young people lack a sound financial education. According to test scores released by the Federal Reserve Board, nearly 70 percent of American high school seniors could not perform simple financial tasks like balancing a checkbook, as well as lacking insight into principles of earning and money management. The ability to perform complex tasks like making an investment and tracking its performance is well beyond their grasp.

"Financial education is a real weakness," Colom said, "especially among people with a modest income. They don't know how to properly invest their money."

Participants in the investment clubs will be broken up into two age groups: nine-11 and 12-15. Primerica volunteers will teach the children basic money management and investment skills using a curriculum developed by Dr. Michael Melton, head of the University of Southern Mississippi's Center for Financial Services and a former stockbroker.

The volunteers will teach participants how to manage their money, the language of investment, why investment is a long-term strategy and how to diversity their portfolios. The children will then put their knowledge to work. Each group will receive an amount of play money to invest in stock exchange listed stocks and will monitor their performance. As an incentive to perform well, the club with the best portfolio at the end of the program will receive a cash prize at the annual Boys and Girls Club Youth of the Year award ceremony, held in February 2004. The first place club will receive $1,000, with prizes of $750 for second place and $500 for third place. The winning clubs will keep half of the prize money, and the other half will be divided among club members. However, all children who participate will receive a prize. Everyone who takes part will be a winner.

Both the Colom Foundation and Primerica would like to see the children come out of the experience with the financial knowledge they need to prosper.

"We want to see the kids come away with an understanding of how finance works," Dean said. "Many children have been taught how to make money, but not how to make their money work for them."

"The greatest empowerment you can give someone is knowledge," Colom said. "Knowledge is power. We want to see young people as strong on the stock page as they are on the sports page."

For more information, contact Deborah Schumaker at 662-327-0903 or via e-mail at dschumaker@colom.com.