Happy Friday! Came across another financial literacy test and of course had to take it ;)
This one comes from Standard & Poor’s Rating Services’ Global Financial Literacy Survey which I caught off Bloomberg.com because I’m reading fancy pants news sites now (hah – not really, I only go there if my favorite newsletters send me :))
Here’s the test – see how you do!
- Suppose you need to borrow 100 U.S. dollars. Which is the lower amount to pay back: 105 U.S. dollars or 100 U.S. dollars plus three percent?
- 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?
- 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?
- 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?
- Suppose you had 100 U.S. 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? [Multiple choice here: more than $150, exactly $150, less than $150, or don’t know]
That’s a lot of supposing :)
But suppose you answer these questions right now – what would you score?
According to Standard & Poor, if you get 3 out of the 4 correct you’re “financially literate.”And if you’re wondering why there are 5 questions there instead of 4, it’s because #4 and #5 both go together (why they couldn’t be merged into one I can’t tell you…).
Here are the answers – don’t cheat!
- 100 U.S. dollars plus three percent
- The same
- Multiple businesses or investments
- More than $150 dollars
How’d you do? 4 out of 4? 3 out of 4? 1 out of 4?
If you got the last one then I’m shutting down this blog forever because I suck at my job :( If, however, you got the second one (3 out of 4) then welcome to the cool table – population you and me! Even though, yes, I SHOULD HAVE GOTTEN ALL FOUR RIGHT because all I do is think about money every day!! Arghh…
Question #2 tripped me up, like always… (I hate inflation) But seriously – who would pay double the amount for a car or house even IF you got paid double?? No way in hell I’m paying $700,000 for a house or double for a car/vacation/etc – I’d downsize/go without! Just because you make more doesn’t mean you have to spend more, jeesh…
I should email them this:
But whatever. I’m still literate :)
Here were some interesting results when people all over the world took it:
- U.S. citizens scored worse than other major English-speaking economies (Canadians and UK’ians beat us out by far)
- In major emerging economies, it’s the 15- to 35-year-olds showed the highest percentage of financial literacy in major emerging economies
- 36- to 50-year-olds did better in major advanced economies
- Only 35% of respondents – globally – got the right answer to question #3 (this shocked me!!)
- Many homeowners can’t calculate the basic interest owed on their loan payments.
What all this means is that if you’re on a blog right now talking about money, you probably know more than most of the world :) So pat yourself on the back and be thankful you caught on when you did!
Here are more quizzes we’ve taken over the years if you want to avoid work some more:
- What’s Your Financial Personality? @ Payoff.com via Budgets Are Sexy
- How Broke Are You? @ Buzzfeed
- Financial Truth or Bunk? Round I @ Kiplinger
- Financial Truth or Bunk? Round II @ Kiplinger
- Can You Manage Your Money? @ The Christian Science Monitor
- How Financially Compatible Are You and Your Sig. Other? @ Fidelity
See ya back on Monday!
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!