We are not taught anything about economics.
I did not learn how to open a checking account (or savings account) until I got out of the Army (in 1967). We were paid in cash (side story even in Vietnam on payday the paymaster would fly out to where you were and pay you in cash).
We certainly were not taught about compound interest and how it can help you in a savings account and hurt you with credit.
We were not taught about contracts and what to be careful about and when necessary to get a lawyer involved.
All these things we learned as we stumbled through life.
Some never learn.
A person can be rich, but not wealthy. A rich person has a lot of money that comes from one source and if that source goes away their net-worth begins to drop. A wealthy person has a lot of money but has structured things so they have many sources of income and if one sources dries up there are others.
This is why someone may come into a lot of money could be broke in a relatively short time after getting the money.
They either trusted someone they should have trusted and/or they did not understand the need to invest in things that will keep the money stream flowing.
Lottery winners, actors, and athletes make up the bulk of those that squandered their millions (as well as children that have inherited wealth).
I read a report several years ago that said the average sports millionaire is broke after three to four years.................
Thank you for that thoughtful post! You make excellent points about how people can have the talent to make good money but are poor at keeping it. Our education system and parents need to do a better job of teaching young people how to hold on to whatever they earn.
The public schools do ZERO to teach basic economics and personal finance. If you went to public school and had parents who did not know how to handle money, then you enter life at a real disadvantage.
When I was in the military, it was still mostly a cash environment. Many Marines would cash their checks and blow it all in town on a single weekend, having nothing left in their pockets until the next payday. Thankfully the military had barracks, chow halls, and fifty cent draft beer at the e-Club.
I developed a reputation of someone who could be trusted so some of my fellow Marines would give me $40 or so on payday so I could hold on to it for them. I ended up being sort of a bank for them. These guys didn't even have a savings or checking account to their name and would not think to even open one.
It is no surprise that many well-paid athletes go broke after retirement. Many of them grew up in the ghettos and knew only poverty growing up. Not only did they not have the education to properly deal with their finances but they were likely taken advantage of by shysters and even fleeced by family members.