Empowering Young Entrepreneurs Through Financial Literacy
Businesses and government policies must act now in order to improve the financial literacy of Europe’s youth. This is very important if they want the future of the world to produce successful entrepreneurs.
A recent study by Visa Europe asked around 15,000 Europeans about what type of entrepreneur they want to become. The most hopeful youth group, which is the 18 – 24 year olds, said that 56% of them had ideas of what they want to become someday. However, what’s alarming is that 20% of those who completed the survey said they are not literate enough when it comes to financial planning.
If only 20% of those received basic financial literacy, they could possibly become successful entrepreneurs in the future. Of course, not everyone as the potential to become the next Bill Gates or Mark Zuckerberg. However, if budding entrepreneurs are given adequate guidance to fulfill their potential, it could make a huge difference to the world’s economy.
This is why businesses and the government must take initiative in encouraging young people to take advantage of the digital economy. Young people need the financial skills in order to thrive. This is why several private institutions, including Visa Europe, have launched the Entrepreneurial Skills Pass or ESP, which is a new European qualification in entrepreneurship for young people. The ESP gives companies an idea that the applicant has good entrepreneurial knowledge, experience, and the sufficient job skills for the role.
Financial literacy application
There are many ways in which young people can apply their financial skills practically. One is through a popular investing channel available to young people, which is called the “shared economy”.
The government and private institutions can introduce the shared economy to the youth as a system where assets and services are shared between private individuals. The easiest way to make them understand what the shared economy is about is to use Uber and AirBNB as examples. If they’ve made an Uber or AirBNB transaction, then they’ve successfully invested in what is now called the shared economy.
The idea of this kind of economy is to connect businesses and people that own assets with other entities. The shared economy is a good way to introduce the youth to business and knowing the ins and outs of a particular market.
This is Money states that microinvesting is also a good way to put your financial literacy to the test. It is a type of investment that links a person’s debit card to a microinvesting app that turns spare changes into capital. The spare change is then transferred directly into an investment portfolio.
Microinvesting may seem a waste of time at first but think about the exponential growth of every Euro that is being invested. Serious money can be accumulated in 10 years’ time when Euros are invested in the right places. Think about purchasing a cup of coffee for 3.80€ every day. With a microinvesting app, the loose change, which amounts to 0.20€ can really mount up after a year or so without the investor really realising.
One of the things that young people usually say about investing is that it is hard, and sometimes the complexities of investing deter many young people. Not to mention the money that you can lose with investing. However, despite these realities, FXCM suggests that millennials have a strong entrepreneurial spirit, which can be used to revolutionise and improve the status quo of businesses. Like any other venture, all it takes is a bit of knowledge and some experience in order to slowly gain wisdom in investing and use it to your benefit.
To get some valuable insights into investing, young people should read the investor’s bible, ‘The Elements of Investing: Easy Lessons for Every Investor’ by Malkiel and Ellis. It has all the necessary things that people need to know to become financially literate as well as business savvy.