Happy Financial Literacy Month!
Who even knew there was such a thing as Financial Literacy Month? But now that we know, we couldn’t help but dig a bit deeper….
Financial Literacy Month (April) was actually conceived in 2003 with a focus on teaching children and teenagers about money. It was “re-designated” by Barack Obama in 2010 after the financial crisis. Obama wanted us all to remember that the financial crisis of 2009 was caused by Wall Street and by Main Street. The need for improved financial literacy is something that both parties and Congress actually agree on. That alone makes this month noteworthy!
So just what is financial literacy?
Financial literacy is defined as a set of skills/knowledge that allows someone to make financial decisions. It includes an understanding of how
money works in the world
someone manages to earn money
a person invests the money
to donate money to help others
I evaluated a number of literacy quizzes to provide to all of you to test your knowledge. The good news is that they were all way too easy for all of you — you have clearly demonstrated the skills listed above. And taking quizzes reminded me of studying for my licensing exam — so I put a quick end to this part for me. BUT knowing how competitive some of you are, I decided to include a couple of questions below from the FINRA Investor Education Foundation to test your knowledge….
If interest rates rise, what will typically happen to bond prices?
Rise
Fall
Stay the same
No impact
If I knew this, I wouldn’t have to hire you.
And harder…. If you owe $1000 on a loan and the interest charged is 20% compounded annually, if you pay nothing off, how long will it take for the amount you owe to double? (HINT: Remember the rule of 72)
Less than 2 years
2 to 4 years
5 to 9 years
10 or more years
This is a dumb question. I have terrific financial literacy and would never do this.
The one take-away for you…. It’s clear financial literacy is important to you. We can absolutely help build financial literacy in your children and grandchildren.