Nearly two-thirds of Americans can't pass a basic test of financial literacy

Nearly two thirds of Americans can’t calculate interest payments correctly, according to a new study. About a third said they didn’t even know how.
One of the silver linings of the financial crisis was that it was supposed to have taught many Americans a lesson, albeit painful, about the dangers of debt, and financial issues in general. Apparently, the message, though, didn’t get across.
All told, a new study estimated that nearly two-thirds of Americans couldn’t pass a basic financial literacy test, meaning they got fewer than four answers correct on a five-question quiz. Worse, the percentage of those who can pass the test has fallen consistently since the financial crisis to 37% last year, from 42% in 2009.
These findings come from the National Capability Study by the FINRA Foundation, which surveyed 27,564 Americans, from June through October of last year. FINRA in an quasi-government organization that regulates brokers and Wall Street.
Bonds presented one of the biggest problems for respondents of the survey. Just 28% knew what happens to bond prices when interest rates fall. (They rise.) And less than half of all Americans appear to be able to answer basic questions about financial risk.

http://time.com/4403643/american-financial-literacy-test-fail/

Link to the quiz: http://www.usfinancialcapability.org/quiz.php

 

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I think this is a non-event. I took the test and got them all right and they are easy but for people not in finance and who don't own bonds it's not unusual that they would miss that one (bond question).

Since there's so few questions in the test missing one really hurts one's score. If people missed more than the bond question (on this particular quiz) it's just because they don't care and didn't read it carefully.

 

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Perty easy test which only checks for general knowledge about financial issues... but the national average showed more than 3 questons was missed.!!!
Stuff like that... as it applies to real life wasnt stressed when i went to school in the 60's.!!!

 

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I only missed one question (bonds) but I'm still penniless.

 

Whats the bigest reasons that you thank caused you to be pennyless.???

 

Having no investments.

 

Well... from what i understan Donald Trump perty much started wit nuthin an he did good.!?!?!?

 

Well, if by "nothing" you mean "a small loan of a million dollars" then yes.

Let's say you got a million dollars handed to you by your father - and you put it in a mutual fund. Put half the earnings back in each year to grow the fund and cashed out half to live on. You'd end up with about $40,000 a year to live on, doing no work. Think you could live on that?

 

Yeah the Donald was a bad example.!!!

But what are you sayin... that people who "make it" have advantages that the pennyless didnt have.???

 

Most of them, yes.

Some, of course, simply have the strength of character and a bit of luck - like this guy, the quintessential self made man: https://en.wikipedia.org/wiki/Pablo_Escobar

But what exactly these advantages are is not obvious to a casual glance. There's an interesting book on some aspects of this - "Outliers" https://en.wikipedia.org/wiki/Outliers_(book).

 

For the most part - yes. They get good healthcare from the very start so they're not sick all the time. They get good education which puts them in a position to get a decent job out of school. And by the time they get out of school, they've had at least 16 years of training to live life in a way that is most likely to make you successful - getting up every day and working at something. Those are all significant advantages that people who grow up without money do not have.

 

Good ponts... i agree.!!!

Wit-out havin above average "luck"... do you thank "strength of character" can be enuff to make someone successfull who didnt have advantages like billvon mentoned.???

 

Of course. I posted an example.

It's just not going to be anywhere near as common, and it's going to be found mostly in arenas the advantaged avoid - boxing, drug dealing, that kind of thing.

Because the advantaged also have strong characters, virtues, work ethics, etc. And that's the competition.

 

Thanks for the links... but i had hoped that you coud reply in you'r own words.!!!

 

I am a financial luddite but I scored 5/6 (blowing the bonds question).

I didn't see anywhere where they equated a score with illiteracy. It's hard to tell. What if getting 2/6 is a pass?

If that were the case, I'd say it's a big deal if more than half of Americans couldn't do the basic math required.

 

One makes one's own luck.
"I've found that luck is quite predictable. If you want more luck, take more chances. Be more active. Show up more often. "
"I say luck is when an opportunity comes along and you're prepared for it."
"I have often found that the harder I work, the more luck I seem to have.

 

Im guessin that most people see luck as havin some sort of supernatural component... an just to be clear... do you see luck as circumstances which naturally occur (not a magical type thang).???

 

This is where a book like Gladwell's "Outliers" can provide an important reality check. They all worked hard. They all took chances, were active, etc. But they all started - from the beginning, before they had done all that work - with what turned out to have been major strokes of luck. It's probably not a coincidence, for example, that the founders of Microsoft not only knew each other as teenagers from the same high school, but that the high school involved had a live, real time interactive mainframe computer connection for students to practice programming - at a time when very few universities had made such capability available to undergraduates even in related classes, let alone anyone who wanted to try their hand.

If you were born anywhere else in the country at that time, you did not have nearly unlimited interactive time with a computer at your fingertips all through high school. You probably didn't have that kind of access to one even in college. So essentially no young black men, say, however hard working, had much of a shot at competing with Bill Gates and Paul Allen. If the reward for becoming the best surfer in the world were billions of dollars and control of major aspects of the US economy, those born on the beaches of Hawaii would have had an advantage, no?

Or look from the other direction. Miles Davis grew up with money, privilege - but black, in America. One time, in his early years, he was accosted by a policeman while hanging out near a jazz club, basically for loitering while black, and the cop hit him with his nightstick - in the mouth. Ok, he recovered. He didn't lose any teeth, or suffer nerve damage. But how many black kids got taken out of their futures by something like that?

So yeah, work hard etc. But choose your parents wisely, as well.

 

Agreed. Though I"ll bet most people don't think of it as supernatural. I'll bet most people think luck is some form of legitimate
phenomenon that gets a free pass from the supernatural label. They're foolin' themselves.

Yes.

Well, I see luck as a form of confirmation bias of the experiencee.

 

Correct. But these are poor examples. Opportunity isn't about handing you a specific thing; opportunity is about handing you some thing, and you making the best of it.