Our global economy has become so complex that the gap between what people know about economics and personal finance, and what they need to know, is widening every day. Americans are increasingly responsible for their financial future, yet an alarming number lack even basic economic awareness.
In Karen Blumenthal’s article for The Wall Street Journal, Tackling Investor Ignorance, she dissects the latest report from the securities and Exchange Commission on personal finance for Americans. The conclusion? Not great.
From the article:
“Small investors, the SEC said, “have a weak grasp of elementary financial concepts and lack critical knowledge of ways to avoid investment fraud.
That’s a problem for individuals if they buy products they don’t understand, accumulate too much debt or take unintended risks with their retirement funds or other savings.”
So where does the Council for Economic Education fit in? How do we fix the problem?
“Still, people can’t be experts about every financial product or investment. So what exactly do they need to know to make good decisions?
Plenty of experts have been wrestling with this. The nonprofit Council for Economic Education is working on standards for students in fourth, eighth and 12th grades in six main subject areas: earning income, buying goods and services, saving, using credit, investing and protecting and insuring assets.”
Dr. Annamaria Lusardi, CEE Board Member and professor of economics and accountancy at George Washington University, and Bill Bosshardt, Director of the Center for Economic Education at Florida Atlantic University both weighed on the full article here.