Americans are Financial Illiterate, Buried in Debt and Locked into High Interest Mortgages
Posted on | November 10, 2009 | No Comments
There is very little doubt that many Americans are financially illiterate, buried in debt and locked into high interest mortgages. In a recent survey completed by the University of Michigan baby boomers were unable to figure out a simple math question on compounding interest. In fact, only 18% of baby boomers correctly answered the question.
This is not the only troubling issue when it comes to financial matters. When asked if one should diversify their portfolio over half of the respondents said that it is safer to invest in just one stock than many stocks or a mutual fund. The question was posed in a true-false statement so it is strongly possible that many of the other half just guessed and got the question correct.
When it comes to financial literacy it is not only the baby boomers who struggle. In a survey completed by Jump$tart Coalition for Personal Financial Literacy only 17% of high school and 19% of college students knew that over a multi decade time span that stocks perform better than bonds of savings accounts. At this age this is the type of information these students need to know so they can invest wisely!
The only way to fix this problem is to educate Americans at all levels. Many of my friends and family have had this conversation. Why are we learning the periodic table in middle school yet we do not know how to invest money in a savings account or stock market until we are out of college? There is absolutely no reason that personal finance should not be taught from middle school through high school; our country would greatly benefit if this was the case.
Please make sure to return to Subprime Blogger for all your mortgage and financial news. To stay up to date on the current state of finances make sure to bookmark the current news category below.
Author: Jesse Wojdylo
Comments
Leave a Reply