Financial literacy is a major problem in the United States according to Forbes “Only 57% of Americans are financially literate.” That is based off understanding terms like; inflation, interest and diversification. We are ranked 14th in the world in financial literacy behind countries like Norway and Germany. And finally we have movies like “Wolf of Wall Street” and the “The Big Short”, that show how corrupt the industry is. The problem is that the financial industry uses complex terms that confuse the average American, and the average American often gets sick to their stomachs when they think about money.
A lot of due to a lack of financial literacy. Once you feel comfortable understanding the terms that are being used and how things like compound interest and taxes work, then you can feel empowered about your finances. (YAY NO MORE SICK FEELING) We here at Orca want to help empower our clients and readers when it comes to finance and we plan on taking a unique approach to educating our consumers by explaining terms in everyday concepts that we all can relate to.
For example, comparing something like a mutual funds to dating, or comparing a popular financial strategy called Dollar Cost Average to a game we all grew up playing, Monopoly. Now we want to make sure this causes a ripple effect, so if you like the articles share them around and empower your friends to take control of their finances. #OrcaFinancial
Finally, if you want a topic explained or to challenge us here at Orca, send us a message here, and we will address your topic and break it down in the Orca Language for you.
See if you can answer the questions below from Forbes, if you get more than 3 or more correct then you are considered somewhat financially literate, and one of the 33% worldwide that could get three correct. Answers are at the bottom
1. Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?
a. one business or investment
b. multiple businesses or investments
c. don’t know
d. refuse to answer
2. Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?
a. less
b. the same
c. more
d. don’t know
e. refuse to answer
3. Suppose you need to borrow 100 US dollars. Which is the lower amount to pay back in one year: 105 US dollars or 100 US dollars plus three percent?
a. 105 US dollars
b. 100 US dollars plus three percent
c. don’t know
d. refuse to answer
4. Suppose you put money in the bank for two years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years?
a. more
b. the same
c. don’t know
d. refuse to answer
5. Suppose you had 100 US dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account?
a. more than 150 dollars
b. exactly 150 dollars
c. less than 150 dollars
d. don’t know
e. refuse to answer
Source:Forbes Financial Literacy Quiz
Answers: 1: b. 2: b. 3: b. 4: a. 5: a.
