Financial Education: A Primer

By Ash Malhotra

PART 1: In this first article, I want to set out a foundation for Financial Education.  I am very passionate about educating people – adults & kids – about personal finance and filling in the “gaps” in their financial education. While I would never claim to know everything in this field, I have a lot to share as a “financial educator”. Treat what follows as my experience and opinion, but always – always do your own research on all matters related to investing your money.

I highly recommend that your kids (especially teens) read through this material as well to be better informed about the time value of money. You will have questions, I’m sure.  I will give you my info at the end of the article, and you should reach out to specific professionals like CPAs for relevant advice.

Let’s get rolling. As we proceed through life, there are a set of tools available to us that, used wisely, create a sure pathway to financial success. These tools are education, regulations, IRS codes, and a myriad of products devised by the Financial Industry to offer a balance of risk and reward.

The purpose of financial education is to reduce risk and improve our odds of success or rewards. No one is or should be expected to know everything about Finance. That is why we rely on our network of professionals in the various areas of Finance – Banking, Investing, Insurance, Retirement, Health, Estate Planning, Education Planning, etc.

Let’s work through some of these areas of Finance starting with the most pertinent question – what is the secret of wealth and how would the Middle Class evolve to the ranks of the Wealthy? There have been many books explaining the secrets, and I will offer a summary. That said, tools, or financial vehicles have been available to all of us for a long time. It is that the financial education is missing that helps people (families) avail of these vehicles to get to the higher level of monetary achievement. There are financial vehicles to fill in the gaps. Let’s roll with the concept of “putting all eggs in one basket”.

The Traditional approach:

Many people I know measure their financial success by their ability to succeed in the Trading Market with Stocks, EFTs, Mutual Funds, Bonds, Commodities, Options, Forex, and other investment vehicles. The trading market is inherently volatile depending upon factors outside our control. There are seriously a lot of opportunities in the trading market to make good money that are somewhat counteracted by the higher risk and volatility.  But this method of making money has tax ramifications and it lacks complementing methods to balance the risk. So, what’s the workaround?


I’m sure you might have heard the term “Diversification.”  That’s the workaround to having all the eggs in one basket. It’s a method of using your money in a way that you are spreading your risk across vehicles of investments and planning. Depending upon your outlook of money management, you may ignore diversification, you may embrace it and use it entirely, or be somewhere in the spectrum.  The point of spreading risk is that in times when one type of Financial Vehicle is not doing well (case in point the current stock market), others will pick up the slack and keep generating the income. What is the best kind of Diversification? That’s something you must define because it’s your money but do the exercise with some knowledge of all vehicles providing the diversification. Depending upon your need for alternate income (like Real Estate Investments or owning a business, Estate Planning or financial longevity), financial vehicles abound!

Have I piqued your interest sufficiently?  Watch for the 2nd part of this article.  In the meantime, remember that my team and I are here to educate you on topics pertaining to personal finance, show you how to avail of some of these financial vehicles, we’ll help you with them or direct you to the professionals that handle certain vehicles that are outside of our professional purview. We are Families Educating Families About Financial (FEFAF) success! Send in your questions to me at or text 832.723.9555.  See y’all next time!