As the son of a Montgomery county school teacher, I was so honored to mentor a group of hard- working students from Albert Einstein High School in Montgomery County rise to success in giving an incredible pitch to the judges at the Business Pitch Challenge. As the month of April is Financial Literacy Month, this was a great time for me to help make an impact in increasing the financial literacy among students. These students have the privilege of taking a business and finance course at the high school level. They are already much more advanced in their understanding of business operation and level of financial understanding than the majority of this country. As of 2019, 19 states require high school students to study financial literacy before earning a diploma, which is up from 17 in 2018 and 13 in 2011. It is great to see this progress year to year. At the business Pitch challenge, I listened to the students’ pitch which included a deep analysis of revenue, profit margin, and expenses of their business idea: a drone delivery service, which would deliver packages from door to door.
I encouraged the students to deepen their analysis by cutting costs through changing their business model from serving as a manufacturing company to serving as a software as a service business. This way, the company would be able to cut down on high fixed costs and focus on driving recurring revenue. The important thing to note is that the students were able to hold a discussion on cost-benefit analysis, while most high school students could not due to their limited understanding of financial metrics. Whether the Drone package delivery service would become a million -dollar company or not, these students have won the lottery by attending a school that would allow them to study finance before the rest of their peers across the country. The earlier students start to understand this material, the better. As they reach college and beyond, it is crucial that they become financially literate, which will make them financially smarter. It is crucial that young adults are able to make potentially complex decisions about student loans, mortgages, credit, and managing retirement-savings accounts. According to research studies, on average, students in states that require financial literacy courses in high school have lower credit card balances and pay for college using lower cost student loans than students living in states without this mandate. States with the mandate to incorporate financial literacy courses into the curriculum have seen an overall improvement in credit scores and a lower rate of late payments on credit cards among young adults. This shows how important it is for students to begin increasing their financial literacy as early as high school.
As a financial advisory firm, Sherman Wealth is a big proponent of starting to increase financial literacy at an early age. We are excited that students in Montgomery county are working to increase their understanding of business strategy and financial information, which is what we think will help them long term. This is why I was excited to be a part of the business pitch competition and help coach the students into developing strategic ideas and better their business model