December 5, 2008

Student Group Aims to Increase Awareness of Fiscal Responsibility

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Amidst the increasing economic turmoil, the Responsible Economic Action Leaders are looking to educate Cornellians in the often confusing but crucial topic of personal finances. Founded this semester by seven business-minded undergraduates, R.E.A.L.’s mission statement declares that it “strives to foster responsibility in and out of the corporate setting,” through activities including a mandatory personal finance class for students, which was the central point of yesterday’s R.E.A.L. Personal Finance Roundtable yesterday in Goldwin Smith.
“As a club as a whole, we’re trying to foster financial responsibility,” said Charles Reichenbach ‘09, one of the founders of R.E.A.L. “Our general idea is we think there is a certain lack of knowledge for students coming out of school, especially in terms of epic situations like the one we’re facing right now.”
Reichenbach and Ilya Brotzky moderated the discussion. Among the six panelists featured were Prof. Richard Curtis, applied economics and management, and MBA candidate Matthew Wagner grad, who recently accepted a position as investment manager at Goldman Sachs following his graduation. After a short opening presentation on R.E.A.L.’s goals and ideology, Reichenbach and Brotzky questioned the panelists about the creation of a mandatory personal finance class, discussing its feasibility and potential format.
“I think personal finance is important to all of us,” said Prof. William Lesser, applied economics and management. “It can also be a very painful and costly process.”
Peter Olcott, University bursar, discussed the disconnect between undergraduate students and their tuition bills. Many students have their parents deal with the monthly bills, making post-graduation financial responsibilities even harder to face.
“For many [students], this is the first bill they’ve ever gotten in their life, and they’re overwhelmed,” said Olcott. “The student needs to know what’s going on.”
The panelists were overall receptive of the idea of the mandatory class. Many raised questions about how it could be implemented, and whether it would be an online module or a four-credit mandatory introduction class.
“What we kind of get from the panel is to have a series of online courses to be accessible at all times to students,” said Brotzky. The concept of a hierarchy of courses was discussed, with intermediate and challenging courses available for upperclassmen.
Many of the panelists interest in the class was rooted in their own personal experiences in work and study. Wagner pointed out that despite the ubiquity of coverage in the national media, many basic financial institutions remain shrouded in mystery for students.
“How many people really understand the difference between investing in a mutual fund, or choosing a stock?” said Wagner.
Several times, the question was raised about how deans and professors in the University’s fine arts colleges would respond to the mandatory finance class for their colleges’ curriculum. Olcott suggested foregoing the professors’ response and going straight to the students.
“If you can show the students are concerned and need and want something, that goes a long way,” said Olcott.
Following the panelist discussion, Reichenbach cited the need for continual input into the class’s nascent stages to make it a reality, something his fellow R.E.A.L. founders agree with.
“The next step is to get the students on board,” said Brotzky. “We really think this is relevant.”
Attendees also responded favorably to the idea of a more perfunctory fiscal education, as well as raising new thoughts about the possibilities for the financial class.
“I think it could be more of a high school issue,” said Rahkeem Morris ’09 of the mandatory financial education. “You think, only about 20 percent of people have [college] degrees. Are these the only people that should have this type of program?”