Sophie Gunderson, Chapter 7, Question #2

It is scary to truely imagine how little young adolescents are taught about the nature of investing and the financial markets themselves. Throughout Chapter 7 of Naked Economics, I was able to learn more about these topics precisely. Although it seems like it will take many years to somewhat master and understand, Charles Wheelan makes many points of how relevant this information is to my life now and for the rest of it. Investments are occurring daily yet many of the investments that are made aren't necessarily the best decisions if they're made under uneducated reasonings.

The teachings of this chapter were portrayed through many examples. However, The example that stuck out to me most was of Havard's investment strategies versus his mother's. His mother saved. She saved most, if not all, of her money in the bank and got the same interest rate every year. Harvard on the other hand, invested. The university would either gain a large rate if the year was successful or would have a bad year and lose some of their investment. Overall, both scenarios were not completely ideal. Wheelan makes a point for us to save (like his mother), invest (like Harvard), and then repeat this cycle. When we take risks in investing, there is a strong possibility we could gain a reward.

Overall as I find myself rapidly growing up and entering what many refer to as the 'real world', I see the importance of understanding economics and investments more and more. Although Wall Street seems like a far off idea, I now realize how beneficial it could be in my life if I make wise investments and fully understand the nature of financial markets.