Financial literacy in the world

With a view to reply this query, the worldwide score company Standart and Poor’s carried out a large-scale examine of the monetary literacy of the grownup inhabitants all over the world. Greater than 150 thousand individuals from 148 nations took half within the examine.

Financial literacy in the world

The intention of the examine was to point out the significance of monetary literacy within the fashionable world. Financially literate persons are in a position to make higher choices about their financial savings, investments, loans and different monetary issues.

To evaluate monetary literacy, respondents had been requested easy questions to seek out out their understanding of Four primary ideas of private finance: threat diversification, inflation, calculation of easy and compound curiosity.

Let’s attempt to reply these questions ourselves!

Take a look at – How have you learnt your monetary literacy?

1. Threat diversification.

Think about that you’ve got a sure amount of cash. Which might be safer – investing all of your cash in a single asset or one particular enterprise, or investing in a number of completely different property (a number of completely different companies)?

Reply choices: a. one asset or enterprise; b. a number of completely different property or companies; c. have no idea; d. refusal to reply.

2. Inflation.

Think about that in 10 years the costs for all the products you purchase will double. In case your revenue doubles as effectively, what number of gadgets will you have the ability to buy in comparison with right this moment?

Reply choices: a. extra; b. much less; c. as many; d. have no idea; e. refusal to reply.

3. Easy curiosity.

Think about that you’ve got borrowed $ 100. Which fee scheme will probably be extra worthwhile for you: return $ 105 or $ 100 plus 3%?

Reply choices: a. $ 105; b. $ 100 plus 3% ; c. have no idea; d. refusal to reply.

4. Compound curiosity.

Think about you had $ 100 in a financial savings account with a financial institution at 10% curiosity. How a lot cash will probably be in your account in 5 years if in case you have not withdrawn cash out of your account.

Reply choices: a. $ 150; b. Greater than 150 {dollars}; c. lower than $ 150; d. do not know; e. refusal to reply.

Key Findings of the International Monetary Literacy Examine

All respondents who answered not less than Three out of Four questions had been acknowledged as financially literate. On common on the earth, solely each Three respondents gave appropriate solutions to the questions posed. The unfold within the proportion of the monetary literate inhabitants ranged from 13% in Yemen to 71% in Danny, Norway and Sweden.

Financial literacy in the world

It was not a shock that the share of the financially literate inhabitants is larger in developed nations (Scandinavian nations, Germany, Nice Britain, USA, Canada, Australia) and near zero in dilapidated economies (Yemen, Afghanistan, Albania). All different nations are someplace in between.

In Russia, the share of the financially literate inhabitants was solely 38%. And that is greater than 1.5 occasions decrease than in developed nations, the place the share of the financially literate inhabitants ranged from 45% to 70%.

Share of financial literate in developed and developing countries

Probably the most troublesome query was the primary query about threat diversification. Solely 35% of all respondents answered it.

The examine discovered that males are extra financially literate than girls in each developed and creating nations.

Financial literacy of men and women

The examine additionally discovered that younger individuals in all nations are extra financially literate than earlier generations.

Share of financially literate people in different age groups

Rich individuals have extra monetary abilities than poor individuals in each developed and creating nations.

Share of financial literate by income level

Thus, the extent of monetary literacy depends upon normal training, age and revenue stage. On the similar time, we stay in a world the place banks and monetary firms provide an increasing number of refined monetary merchandise to the general public. Furthermore, these merchandise are targeted not on slender segments, however on the broadest inhabitants teams.

Consequently, this results in the truth that in line with the carried out analysis, right this moment solely half of bank card holders can carry out easy calculations associated to curiosity.

In our nation, the share of financially literate individuals was 38%. Let me remind you that this was probably the most primitive check for monetary literacy. These. 62% of our compatriots can not reply these questions …

On the similar time, I’m glad to see that you simply and I’ve overtaken China and India, however are nonetheless lagging behind developed nations, in addition to South Africa – let’s push! That is what our website is for! Learn!

Analysis supply – website

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