Risk Education

*/by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc/*

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There is a lot of popular support for introducing more financial education
into the public school system.  While I in principle agree with that
(although I wonder what you take out to make room for it), I would like to
propose that perhaps first we should introduce risk education into the school
system.

An understanding of risk is key for virtually all areas of business and most
areas of our daily lives.  An understanding of risk and decision making is
also key to understanding geopolitical events and macro issues such as
climate warming, fracking and basic economics.  Understanding risk is also
key in many personal issues such as making choices about medical care, or
even career choices.  Additionally understanding risk is also key to
understanding financial issues.

Think about how the media would present stories involving the major issues of
the day if more people had a better understanding of risk.  Imagine how the
politicians would have to change their messaging strategies if they knew they
would be called out if they tried to mislead through faulty risk logic. 
Imagine what would happen to the role of regulators if there was a greater
general understanding of risk.  Having a risk educated populous just might
change things for the better.  (And along the way I suspect all would also
be naturally better financial decision makers.)


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