How rich kids learn about money

By Finance News On Jul 24, 2024

Institut auf dem Rosenberg, a private boarding school in St. Gallen, Switzerland.

Courtesy: Institut auf dem Rosenberg

With a sticker price of more than $160,000 a year, Institut auf dem Rosenberg in St. Gallen, Switzerland may be one of the most expensive boarding schools in the world. So, it’s only fitting that students learn about money.

But rather than focusing on basic budgeting and managing credit, finance classes at the elite Swiss institution cover wealth creation, philanthropy, family businesses and succession management.

“Being able to educate these future leaders gives us the privilege to pioneer course concepts,” said Bernhard Gademann, president of the school. “Everybody should know about interest rates, inflation, share investment portfolios — nobody teaches this.”

In one of the most popular classes, which covers wealth creation and finance, students manage hypothetical $1 million portfolios and present their investment picks to the mock board of a family office — private companies that wealthy families establish to handle their investment management.

Classroom discussions, for students ages 12-18, cover various asset classes, risk vs. reward and the power of compounding.

Too often, these topics are left out of traditional curriculums because they are considered “non-academic,” Gademann said. However, these ideas overlap with the same concepts taught in math and biology, among other subjects.

Bernhard Gademann with students in a class.

Courtesy: Institut auf dem Rosenberg

“It’s truly important to understand the dynamics, the implications and why it’s relevant because it touches every aspect of your daily life,” Gademann said. “All of these things are interconnected, and wealth creation shouldn’t be ignored.”

“Not being able to provide [students] with this information and training is really stealing an opportunity for them being successful,” he added.

The lifetime benefit of a financial education

While most students don’t have access to these types of classes, more U.S. high schools are tackling financial literacy.

As of 2024, more than half of all states already require or are in the process of requiring high school students to take a personal finance course before graduating, according to the latest data from Next Gen Personal Finance, a nonprofit focused on providing financial education to middle and high school students.

Research shows taking a financial education class in high school does pay off.

In fact, there is a lifetime benefit of roughly $100,000 per student from completing a one-semester course in personal finance, according to a report by consulting firm Tyton Partners and Next Gen.

Much of that financial value comes from learning how to avoid high-interest credit card debt and leveraging better credit scores to secure preferential…