Why financial literacy matters

We are currently approaching the end of April, which is Financial Literacy Month in the United States. In Canada, it’s in November. The fact that there is something called Financial Literacy month is telling. It means not enough people know enough about financing to benefit their lives, but at least there appears to be an awareness of the problem.

Addressing the basics

For example, what is the cornerstone of how an economy works? It’s supply and demand, right? Prices are established by the amount of demand for a product in relation to its supply. This is Economics 101, isn’t it. But, for the most part, it isn’t required learning in any course at any level of education, and often isn’t taught until you take elective courses later in high school or in college or university.

This is just one example, but it highlights the challenge we face as a society to learn about one of its most important aspects: finances. So, if we don’t know the basic principles of how prices are established in society, what else aren’t we learning about the realities of the world?

People know there’s a problem

If you look at any survey on the topic, people know they don’t know enough about things like finances, and especially investing. And it hurts people because it means they don’t have as much money as they can have to spend on things like an education, a house, or even a vacation. The less we know about finances, the less opportunities we have in our lives. That’s just a fact.

Indeed, increasing financial and investing literacy in society benefits everyone. As investors, we should want people to know more about how to save and invest. It means that the level of knowledge and information increases so that we can all make better decisions to improve our finances and meet our investment objectives.

ASCEND GRP is an asset-management firm, with offices in Toronto, Richmond Hill, and New York, that services clients seeking investment opportunities worldwide.

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