Financial literacy is a crucial skill that often gets overlooked in traditional education, leaving many individuals to navigate the complexities of money management on their own. Alexa von Tobel, a Harvard University-trained investor and founder of Inspired Capital, reflects on the financial lessons she wishes she had learned at a young age. In particular, she emphasizes the significance of understanding the compounding nature of investing—a lesson she deems “really powerful.”
Early Beginnings of Financial Awareness
Growing up, like many children in the U.S., von Tobel received “no formal education” on personal finance. It wasn’t until adulthood that she delved into the skills necessary for wise financial decision-making. This gap in financial education became a driving force for von Tobel, who went on to establish LearnVest, an online financial advisory service, in 2008. The platform aimed to empower individuals with the knowledge needed to make informed financial choices.
The Catalyst: Personal Experience
Von Tobel’s journey into the realm of financial education was deeply influenced by her personal experiences. At the age of 14, her father passed away, leading her nurse practitioner mother to take charge of the family’s finances. Witnessing this transition ignited von Tobel’s passion for ensuring that everyone has access to the tools and knowledge required to navigate the financial landscape successfully.
The Crux of Financial Wisdom
In her reflections, von Tobel singles out a specific financial lesson that she wishes she had learned earlier: the compounding power of investing. She emphasizes the idea that choosing to invest rather than immediately spending money can lead to significant growth over time. This lesson, she believes, holds the key to financial empowerment and success.
Delayed Gratification and Investing
Von Tobel draws a connection between understanding the compounding nature of investing and the concept of delayed gratification. Delayed gratification involves resisting impulsive actions in favor of receiving greater benefits in the future. Research indicates that children begin learning this crucial skill around the age of 5, forming the foundation for self-control and the ability to prioritize and achieve long-term goals.
The Journey to Empowerment
While von Tobel acknowledges that learning about money becomes more tangible when earning and spending it in one’s 20s, she recognizes the need for a more proactive approach to financial education from a younger age. Her experiences and insights have led her to embark on a mission to provide children with the financial tools they need early in life.
"Growing Up Powerful: Money Matters" - A Children's Book
Von Tobel’s commitment to financial education for children culminated in her latest project: a children’s book titled “Growing Up Powerful: Money Matters.” Co-authored with children’s media brand Rebel Girls, the book aims to teach young kids, especially girls, about personal finance. It covers a range of topics, including setting savings goals, creating budgets, understanding investing, and viewing money as a powerful tool for positive change.
Empowering the Next Generation
Through her book, von Tobel hopes to instill in children the notion that delaying gratification, making smart choices, and understanding the compounding power of investing are lifelong skills essential for success. She envisions a future where children view money not as a source of stress but as a powerful tool that can positively impact their lives.
Conclusion
Alexa von Tobel’s journey from realizing the gaps in her financial education to becoming a Harvard-trained investor highlights the transformative power of financial wisdom. Her emphasis on understanding the compounding nature of investing underscores the importance of instilling financial literacy at a young age. With “Growing Up Powerful: Money Matters,” von Tobel is on a mission to empower the next generation with the tools and knowledge they need to navigate the financial landscape successfully. The lessons she imparts are not just about money; they are about creating a mindset that equips individuals to lead empowered and financially secure lives.