How Donald Trump Will Change the Course of Financial Education
By Dan Kadlec
November 11, 2016
President-elect Donald Trump was born to riches. But his past suggests an understanding that individuals need help and encouragement learning to accumulate wealth, and that he sees financial education as a key part of achieving financial security.
Based on published interviews, Trump seems to prize hard work, resilience and determination—and financial know-how to make the most of those traits. “Making money sounds almost crude,” he said in a 2009 interview. “But if we can help you in the making of some money, it’s going to give you a better life.”
Trump co-authored two financial literacy books with Robert Kiyosaki, a controversial self-help author and advocate of financial education. Some criticized the books as thin on substance and long on hype. But it is clear that Trump has an interest in education and the need for financial skills to get ahead.
“It is around the subjects of money, education and the economy that we became friends and co-authors,” Kiyosaki wrote in Jetset magazine. The two found common ground in their belief that the growing gap between the rich and everyone else will only widen if we do not educate young people about money, a critical point that I have also made and which research out of the University of Kansas supports.
Financial literacy is a bi-partisan issue that caught wind during the Great Recession. Leaders in the U.S., and around the world, have adopted formal strategies for helping populations become more adept at handling their personal financial affairs. They see this effort as a way to lessen the impact of financial downturns and possibly ward off another financial crisis. Barack Obama has been on board as was George W. Bush before him.
Trump has not said anything about how is administration will view financial education. So we can only speculate. One possibility is that he will revert to the Bush version, emphasizing an understanding of investment and ownership as the path to financial security.
That wouldn’t be the worst thing. Hard work and entrepreneurship are bedrock values among moguls including Warren Buffett, a champion of youth financial education. Buffett believes entrepreneurship at an early age reinforces habits that will breed long-term success. “Learning the value of being honest, being willing to take risks and fail…are among the lessons that form the fabric of success,” Buffett writes in How to Start Your Very First Business, a book geared at youngsters.
Trump seems predisposed a similar direction. In an interview with Forbes six years ago, Trump’s son Donald Jr., spoke of his Dad’s core values. “I was in my early teens,” he said. “[My dad] stayed in the office 23 or 24 hours a day and I learned very quickly that you have to work, you can’t just sit back and hope that everything works out.”
Trump may also be enamored with the ideas of Silicon Valley billionaire Peter Thiel, an early supporter who gave the Trump campaign $1.25 million late in the game when almost everyone thought Hillary Clinton would win. Thiel, who is self-made, has a strong entrepreneurial streak. He sponsors a “20 under 20” fellowship that encourages high school graduates to skip college and just get started in their own business. He is now leading Trump’s transition team.
So financial education in the U.S., which is led by the White House through programs overseen by the Treasury Department, might take on a new look. Bush wanted more Americans to own assets. Obama pushed for youth education, and for broader access to bank accounts, reasonable credit and quality third-party advice.
We may be too far down the financial education path that Obama blazed to switch directions completely. The country now has a sweeping infrastructure of nonprofits and other groups set up to deliver just-in-time guidance and access to financial products that keep people away from payday lenders and pawn shops.
But Trump’s idea of financial literacy almost certainly includes principles around how to spot an opportunity and turn it into a profit. And in the new gig economy, where millions work for themselves, that could prove to be a timely policy tweak.