Roger DeChristopher“The Stuff You Won’t Hear Anywhere Else”

Two Thirds of Americans Cannot Pass a Financial Literacy Test

Hey remember the financial crisis back in 2008…..apparently most Americans forgot, or didn’t get the message. Here is a quick question for you all, if you borrow 100 dollar and pay 10% in interest, how much will you owe in interest?……….The answer is 10 dollars.

Did you get it ? If you got it wrong you’re not alone, nearly two thirds of Americans cannot calculate interest payments correctly, which is according to a new study, and about one third didn’t know how to calculate it at all.

The financial crisis was supposed to have taught us a lesson about the dangers of taking on too much debt, especially the dangers of large, high interest mortgage payments which should have not been granted in the first place, but due to political pressure and the rhetoric that the American Dream is home ownership mortgages were given out like candy on halloween.

But We Still Don’t Get It !!!

According to a new study released on Monday it is estimated that two-thirds of Americans couldn’t pass a basic financial literacy test, which means they got fewer than four answers correct on a five question quiz. And worst, the percentage of Americans who can pass the literacy test has fallen to 37% in 2015 down from 42% in 2009.

These are the findings of the National Capability Study by FINRA. They surveyed 27,564 Americans from June to October of last year. FINRA is the regulatory organization that regulates brokerage firms, brokers and Wall St.

The biggest misunderstanding of investing by investors are Bonds. Just 28% knew what happens to bond prices when interest rates rise or fall, and less than half of all Americans are able to answer basic questions about financial risk.

Another scary fact is only 48% of Americans have no difficulty in covering their monthly expenses, and that is up 12% from 36% in 2009.So what about the 52% who cannot meet their monthly expenses? How are they staying afloat? Sadly a lot has to do with education. People lacking a high school education are worst off now then they were before the recession.

We have supposably rebounded from the recession, and I say supposably, with 93 million Americans either unemployed or under employed, that’s not a rebound. One in five family’s without a single person employed in the household is not a rebound. Deutsche bank has predicted that there is a 60% chance that the United States is headed back into a recession. They use the narrowing of the short and long term yield curve to calculate this, theoretically they are correct, but the markets since the recession have not reacted to fundamental changes the way it did before the recession, with the relationship of commodities and stocks reacting similarly to each other other than opposite is the new norm, especially the oil and stock market, this makes no sense to me.

I was a trader in the oil market in the late 80’s and early 1990’s and this market reacts the opposite of what it did just a generation ago, and the theories supporting this from Wall St analysts seems like a lot of hogwash to me.

Ok, so the moral of the story is we all need some kind of help. And it seems like financially our fellow Americans are a mess. But if you are reading this you are smarter than most, hey you could be watching the Voice or the View or some other brainless television show, but your not! Taking care of yourself and your family have to be top priorities for us all and I assume that’s why your here. Take a minute to ask yourself, are you headed financially in the right direction? Are you headed where you want to be ??Can you actually achieve your financial goals by retirement?When you retire can you continue to live in the same lifestyle as you do now ? Do you need assistance in making financial decisions?

Those are very important questions which need to be addressed, and need to be addressed sooner than later! that is why we are here, not just to write these informative and stylish blogs haha, but to inform you that you have a company to contact to get financial advice, and regardless of your financial net-worth we will always answer your questions honestly and promptly, and present you with the best possible scenarios for you and your family.

remember our consultations are always FREE, so pick our brains and call us for a confidential appointment, you will be glad you did

Peter DeChristopher

 

 

 

 

Share This

Share This

Share this post with your friends!