In a world where financial knowledge is often overlooked, one young entrepreneur is leading the charge to close the gap. Youssof Altoukhi, a 19-year-old entrepreneur and crypto millionaire based in the UK, has long been vocal about the lack of financial education in schools. His message, delivered during a TED Talk at just 16 years old, highlights a glaring omission in the curricula that many believe should be mandatory from an early age: financial literacy.
Altoukhi, who faced skepticism and ridicule from educators during his early ventures, humorously reflected on the state of financial education, remarking, “I believe it should be mandatory when you’re younger to be taught financial skills to prevent suffering when you’re older. But the government would never do this – they make too much money out of financially illiterate people.”
His perspective resonates on a global scale, particularly in countries like South Africa, where alarming statistics reveal that only 42% of the population is financially literate. By July 2024, South Africans earning an average income of R35,000 had a debt-to-income ratio of 72%, while those earning R5,000 faced an even higher ratio of 75%. These figures underscore the urgent need for improved financial education across generations.
With the gap in financial knowledge starkly evident, it’s clear that basic financial skills—whether for personal or business use—are crucial to success. Here are five business-defining money lessons that should be taught in schools, inspired by Altoukhi’s philosophy:
1. Budgeting and Tax Optimization
Budgeting is often described as the “financial GPS” for both individuals and businesses. It provides the direction and control necessary to manage money effectively. As financial expert Dave Ramsey puts it, “A budget is telling your money where to go instead of wondering where it went.” For small businesses, understanding and optimizing tax strategies can lead to reduced financial burdens and improved profitability while avoiding penalties from non-compliance.
2. Saving for Emergencies
While entrepreneurs are naturally optimistic about the potential for success, the reality is that setbacks are inevitable. Maintaining an emergency fund can be the difference between surviving a crisis and having to close shop. The COVID-19 pandemic underscored this point, with many businesses failing because they lacked adequate cash flow reserves to weather the storm.
3. Using Debt to Your Advantage
Debt can be a powerful tool when used strategically, especially with the concept of compound interest. Understanding how debt works, especially for investment purposes, can help entrepreneurs build a strong financial foundation. However, it’s a double-edged sword. Mismanaging debt or failing to comprehend its impact can lead to financial ruin.
4. Thinking Entrepreneurially
Entrepreneurship is about more than just starting a business—it’s about cultivating a mindset that sees opportunity where others see obstacles. Encouraging students to develop entrepreneurial skills, even through simple activities like brainstorming business ideas, fosters resilience, critical thinking, and adaptability, all of which are crucial for long-term success.
5. Asking for Help
One of the most fiscally responsible actions an entrepreneur can take is to seek help when needed. Many businesses fail due to avoidable financial pitfalls that could be addressed through mentorship or expert advice. A robust network of seasoned professionals can provide the guidance necessary to improve a business’s efficiency, profitability, and growth. As the saying goes, “Your network is your net worth.”
These fundamental financial lessons are not just crucial for business owners but for anyone looking to build a secure and successful future. By instilling these skills in young people, we can equip them with the tools they need to navigate the complex financial landscape ahead.
