Does Dubai Have the Right Financial Ideas?

We are strong advocates of encouraging financial education at an early age. We think it’s the first best step to ensure our little ones enter into adulthood prepared and aware of how the American credit industry works as a whole. As parents, we want our kids to understand how credit card APR works, why credit scores matter and how to ensure those strong credit scores enable our young ones to buy a home, a new car or continue with their education. Turns out, though, Dubai has a slightly different approach and if we’re smart here in the U.S., we’ll take notice and make efforts to transition some of this country’s great ideas into our own financial education efforts. While we begin our efforts once kids hit their teen years, Dubai starts with kids far sooner.

Smallest Investors

Imagine standing in the middle of Dubai’s financial nerve center – its stock exchange – and seeing investors and other powerful economic minds coming together to present something that will grab the attention and imagination of the country’s youngest. What these minds have come up with is a way to bring young people into the mix, complete with their own investor numbers and prepaid debit cards. And if you’re thinking we’re talking about teens, think again – this country is starting much sooner than that. Indeed, these are elementary aged children and what they’re about to receive is something that will benefit them the entirety of their lives. It will also, if properly executed, ensure a powerful economy for the country as the generations continue. Children are sponges when it comes to gathering information. They can’t quantify it, but there’s a sense of wanting to know more. They want to come home to their parents who are genuinely excited for what they’ve learned that day and frankly, there’s simply no better way to ensure this than with these types of educational efforts on the part of educators.

Dubai Financial Market (DFM) announced this past week that it would be launching iVESTOR Shabab cards for those under the age of 21 and its primary justification is simple: the goal is to “promote financial knowledge and responsible spending”. It’s not mandatory, but parents are supporting this new effort in droves. Those who sign up for the prepaid debit card will have their own life – long investor number issued at the same time. Meanwhile, the card can also be used for transactions in everyday life without the risk of running up debt on a credit card. Not only that, but they’ll learn the differences between debit cards and credit cards, while also learning more about the responsibilities that come with carrying those financial tools with them in their daily lives.

Build and Sustain

So why now? It’s simple. This new initiative is part of a renewed effort on the part of Dubai’s main efforts to build and then sustain interest in the financial markets that these young people learn about in primary school and as university students during routine visits to the DFM. As you may know, DFM is the primary arm of the country’s financial services division and has quickly become a powerful advocate for financial education in today’s youth. There are thousands of students of all ages who visit the DFM each year. When they visit, they’re encouraged right away to take part in the stock market. Each is given a “dummy account” so that they can play the market in a “stock game”. This exciting games puts classmates face to face against each other in a fast paced “winner take all” kind of environment. The learning opportunities present themselves every second of their time spent at DFM. The iVESTOR Shabab card has been designed because “we do not want the relationship to be ended at this point – for them just to visit and go away”. These latest efforts all but guarantee their interest isn’t peaked and then soon forgotten the moment they exit the building. It takes that initial spark of interest and then builds on it. But there’s more than just a financial game at stake.

This program gives these young students, who are now official cardholders, a permanent membership of DFM and even better, it allows them to trade independently when they reach 21. These years before they hit that milestone are used for educational purposes and ideally to build passion and respect for not only a national interest in finances and economics, but a global drive as well. For those with parents who trade shares in their childrens’ names, every single dividend earned is then paid directly into their kids’ accounts, where they can then use their card to continue investing or do with as they wish. It’s a great alternative to waiting for a traditional paper check. The cards also function as a pre-paid means of allowing under-21s the convenience of paying for purchases by card, and a formal record of their spending that could help them better manage their finances.

Very Enthusiastic

So how are the little ones taking to this new opportunity? The UAE youngsters are “very enthusiastic” about the markets, especially those planning on pursuing a career in the financial sector. They’re going into it as very well prepared young adults who for most purposes, are no longer in that learning curve. They understand the stock market and they know how to take the information, reports, analyses and other information and put it to good use. Even better – this year the best performer in the mock-trading simulations the group runs for students wasn’t a university high-flyer – it was a high school kid. There is one similarity in this program and the way things move in the U.S. – parents can easily access their child’s monthly statements so that they too can stay on top of their young ones’ spending habits.

Time for U.S.

So is this a program whose time has come here in the States? It very well could be – in fact, many analysts agree it’s long overdue. Remember, we’re in financial times that few, if any, know how to navigate with any certainty. The biggest financial minds in the country can’t even agree that we’re out of a recession. This is a golden opportunity for this country to better ensure the economic outlook for the U.S. – and it’s not going to cost billions in taxpayer dollars; it’s not controversial and only good can from a program like this. And it all starts with a single field trip, a group of dedicated adults willing to work with these young people and a commitment that lets these kids know their time is drawing near and all they need to do is avoid the mistakes that have been made over the past few years. This has the potential to truly redefine the American economic landscape.

So what are your thoughts? Could you see the benefit of using funds from state and local educational coffers to better prepare your child? Even if it’s unrealistic for a field trip to Wall Street, would you support an investment in video teleconferencing, virtual tours and even annual conferences, via VTC, with hundreds of schools across the country? Let us know your thoughts and share your stories with our readers either in the comments or via Facebook. We want to hear your ideas.

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