More than half the world doesn’t understand this basic financial principle

Less than half of adults understand one of the key principles for earning money. Compound interest - the idea that interests gain more profit over time

This was one of the results of a new large-scale survey (pdf) of the Organization for Economic Cooperation and Development on Financial Intelligence and Financial Subsidy (OECD) and interviewed 30 developed and developing countries around the world. 51,650 adults. Financial information is not very good

Study participants were asked to evaluate their financial knowledge, attitudes, and behavioral questions and were able to earn up to 21 points based on the findings. The average score for all 30 countries studied (including OECD countries and non-member countries) was 13.2. The average of OECD countries is only 13.7. France is the country with the highest average score, slightly above just 14.9. Poland ranked lowest with an average score of 11.6

In this survey, we asked participants if total savings account of 2% interest rate $ 100 totaled less than $ 110 in 5 years. Only 42% knows the correct answer (more). The simpler mathematical result will be a little better. 58% of the participants know that the savings account starts at 100 dollars, guarantees 2% interest rate and generates $ 102 at the end of the year.

With regard to behavior, the weakest part of respondents were related to prior planning and independent advice. Only 60% of adults said they maintained family budgets, but only half said they tried to achieve long-term fiscal goals. Of those who have selected financial products in the past two years, only 44% tried to purchase, and only 19% were seeking independent information to evaluate the selection.

They are members of the organization, but Americans who are not participating in the OECD survey may have poor performance. According to another global financial knowledge survey conducted by Standard & Poor's in 2015, 57% of adults in the United States are considered to have financial knowledge and are ranked 14th in the world.

Anna Maria Roussidi, a professor of financial knowledge at George Washington University, told the Wall Street Journal, "Results are always awful". "If the US joins, they will not be in the top ten. You were born in a country with high GDP per capita so you will not get economic knowledge through breathing."

In the 21st century, human beings acquire a lot of knowledge through new media published to the world, and the world needs economic education. The riches of the world grow year by year, but more than half the people in the world do not understand this basic financial principle. Meanwhile, in the financial industry, we need to receive technical education to keep up with the wave of digital change that is occurring in the industry. The Heart always listens and listens to finding the best knowledge source for our business and the entrepreneurial community. As for FinTech, the release and topic of this particular course has attracted our attention. Of course, I think that it is right to become a guinea pig in our community.

Please look at this fact. India accounts for nearly 18% of the world population. Unfortunately, over 70% of adults do not even understand basic economic concepts. The interests of the banking industry lack customer consciousness, especially in rural areas. Many agents are not satisfied with the motivation to promote banking in rural areas. PM Narendra Modi has launched a very successful PMJDY program to cover banking and insurance operations for all families in India. Approximately 3.2 billion citizens opened a PMJDY account. Now India is looking for the next leap in the banking industry. Payment banks are growing and many citizens are paying for bank accounts.

The digital storytelling study shows that Americans do not understand basic financial concepts. For example, in the Financial Capabilities Study of the Financial Capabilities Authority of 2012, less than half of the respondents got passing points with five simple questions on financial basis. Only 39% correctly answered three or more questions, decreased from 42% in 2009. How much is the price of ignorance? The CFPB said the recent financial crisis is the best result. This is caused partly by borrowed Americans and credit products they can not buy. The Council stated that education is the best hope to prevent recurrence. "Today's young people and future generations should not repeat financial mistakes by previous generations," CordBy wrote in the white paper.