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.