A new study by the University of Pennsylvania’s Wharton School found that adults in many countries make money decisions with surprisingly little financial knowledge. Researchers asked people in 18 countries THREE simple financial literacy questions about interest rates, inflation and investing.
When Americans over 50 years old were asked these 3 questions, only 50% could answer the first two questions correctly. Furthermore, just 33% knew the correct answer to all three questions. “Even well-educated people are not necessarily savvy about money,” according to the report. Among people with post-graduate degrees, 64% were able to ace the quiz. That’s better than the average, 🙂 but still less than my expectations.
Do you think you are smarter than most Americans? According to the report, answering each additional question correctly is associated with a 3% to 4% greater probability of planning for retirement.
The Wharton study found that men (38%) were more likely than women (23%) to know the answer to all three questions. The guys also claimed to feel more confident about their financial knowledge, even when they answered incorrectly. The ladies, on the other hand, were more likely to admit that they didn’t know the answer to a question. Women are so modest. 😳
So how many did you get right on your first try? Feel free to spoil the answers below in the comments section if you think you know the correct answers. 😉 I’ll verify by tomorrow. Financially literate individuals save more, earn more on their investments, and manage their money better. So if you got 3 out of 3 correct then congrats! Your financial future is looking bright. 😀 Otherwise, keep brushing up on your personal finance knowledge. 🙂
Researchers of the report say that “more knowledgeable individuals invest in more sophisticated assets, suggesting that they can expect to earn higher returns on their retirement saving accounts with lower non-systematic risk,” While it’s not important for everyone to have an economics degree, it does help to acquire some basic financial knowledge to help people make decisions about their future. 🙂
Random Useless Fact:
The quokka is a small marsupial that can be found in Australia. They are herbivorous and mainly nocturnal like their relatives the kangaroo and wallaby. Quokkas are best known for being the happiest animals in the world because they appear to be constantly smiling.
For me, they were easy questions… I’m more interested in that adorable marsupial!!!!!!!
I wonder if we can import them into Canada. I bet they’d be great pets for cheering people up.
I got 3/3. Those quokka are adorable 🙂
Some say if you take a quokka to a children’s hospital it can cure all the illnesses with its cuteness. 🙂
Pretty easy questions but I can see how many would struggle with this. Financial literacy is a major problem these days with people. It is simply not taught enough. It should be is the school curriculum.
Yes, for sure. I would combine financial literacy with arithmetic lessons starting in primary school math classes.
Yay, I scored 3/3. I am financially literate!
*thumbs up* 🙂
Got 3/3, it is always interesting to see where others struggle. Education is the key, but where to start if whole families live on social security for generations ( speaking of the super duper social security system in Germany in which low educated people do their best if they are not working).
Well I am doing my best to use my knowledge and grow my passive income – thanks mom!
When I can eventually live off my passive income I plan to spend more time educating those who are less fortunate about personal finance and how to save and invest. You’re right that education is key. If a person doesn’t know how to manage money, giving him money wouldn’t solve his long term problem.
It scares me that the answer rate was so poor, those aren’t exactly hard question, but they do require a tiny bit of knowledge about money. Nice work incorporating a quiz 🙂
Thanks. It seems most readers so far are able to get 3/3. I expected nothing less from my visitors. 99% are getting at least the first 2 questions correct. 🙂 Next time I’ll find harder questions to make it more of a challenge.
3/3 but they are very simple. Next time bring in the series -7 questions liquid.
Haha, good idea. Series-7 questions would definitely stump some people, especially those who aren’t accustomed to the financial markets yet.
Phew 3/3 for me. Thees are pretty easy questions, just to show why it’s so important to include some sort of personal finance courses in elementary and high school.
Yup. The only course I had in high school about finance was Economics in grade 11, but even that was very basic in material. It was also an elective course so only a handful of my graduating class took it. There should be more classes like that.
I could understand how people could miss the first question asked if the multiple choice section would give 110$, more or less… because people could easily forget compound interest, but 102$…. how can someone miss that?
My hope is they misread the question. 😕
I got all 3 right. But I can see how so many could get them wrong. We have a huge issue of financial literacy in the US. It just reiterates that people need bloggers that demystify finance.
Alright everyone, we have a lot of work, teaching, and inspiring to do.
So lets get back to work.
Let’s get on it like a car bonnet. 🙂
YAY! I got all 3 right. I must admit… I sweated it out a bit. I am not good at math at all… EEK! Percentages. >_<
Comment on Random Fact – I hope to see a Quokka when I'm in Australia. D'awhh. SO cute.
I somewhat dislike the subject of math, however I am partial to fractions. 😀
How do people who can’t answer those questions function in the real world? Oh wait, about that level of debt and little assets most people carry in life…
I think if people were more financially literate we would all pay a lot less tax because less people would have to depend on the government for financial services when they retire.
3/3 for me. It’s a shame that many people don’t take the initiative to learn even the basics of finance and money management. The principles are simple and straightforward and they should certainly be taught in high school!
Don’t worry, that day is coming whether or not we are financially literate or not. I am sure the gov’s wil find a way to claw back some or our dollars.
I am wondering, after question three, if the mutual fund industry did not contribute some funding to this quizz????
I’m not sure if the industry did or not, but that’s a pretty interesting thought 🙂