GoodSense
Full time employment: Posting here.
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Financial literacy | Getting it right on the money | Economist.com
Saw this article a couple of days ago. It seems common sense to provide financial education to everyone, since almost everyone will need to manage money sooner or later.
Interesting excerpt to highlight the dire need for financial education:
For instance, a survey in 2004 by Cambridge University and Prudential, a big insurer, found that some 9m Britons are “financially phobic”, meaning that “they shy away from anything to do with financial information, from bank statements to savings accounts to life assurance.” Research by the British regulator, the Financial Services Authority, found that one-quarter of adults did not realise that their pensions were invested in the stockmarket.
Also in the article, some expert said that financial literacy is impossible for the masses.
“The depressing truth is that financial literacy is impossible, at least for many of the big financial decisions all of us have to take,” says Richard Thaler, a behavioural economist at the University of Chicago. Aptly for someone who has built his career on the study of irrational financial behaviour, Mr Thaler admits that even he finds it hard to know the right thing to do. “If these things are perplexing to people with PhDs in economics, financial literacy is not the right road to go down.”
Whoa?? We're not talking about everyone knowing how derivatives work. They just need to understand how to read a prospectus and how to use a compound interest calculator online.
I suppose it's only a matter of time before someone points out that financial literacy is unpatriotic, since it may lead to responsible spending.
Saw this article a couple of days ago. It seems common sense to provide financial education to everyone, since almost everyone will need to manage money sooner or later.
Interesting excerpt to highlight the dire need for financial education:
For instance, a survey in 2004 by Cambridge University and Prudential, a big insurer, found that some 9m Britons are “financially phobic”, meaning that “they shy away from anything to do with financial information, from bank statements to savings accounts to life assurance.” Research by the British regulator, the Financial Services Authority, found that one-quarter of adults did not realise that their pensions were invested in the stockmarket.
Also in the article, some expert said that financial literacy is impossible for the masses.
“The depressing truth is that financial literacy is impossible, at least for many of the big financial decisions all of us have to take,” says Richard Thaler, a behavioural economist at the University of Chicago. Aptly for someone who has built his career on the study of irrational financial behaviour, Mr Thaler admits that even he finds it hard to know the right thing to do. “If these things are perplexing to people with PhDs in economics, financial literacy is not the right road to go down.”
Whoa?? We're not talking about everyone knowing how derivatives work. They just need to understand how to read a prospectus and how to use a compound interest calculator online.
I suppose it's only a matter of time before someone points out that financial literacy is unpatriotic, since it may lead to responsible spending.