Finance and investing can often seem intimidating, especially if you’re new to investing. The overwhelming number of abbreviations and financial terms (contango anyone?) is enough to make anyone put off exploring their financial options.
If movies such as Boiler Room or The Wolf of Wall Street make up your financial knowledge, you’re not alone. A 2014 study on Canadian financial literacy by the U.S. National Bureau of Economic Research (NBER), found that many Canadians lack a basic understanding of financial concepts. In fact, only 42% of Canadians surveyed could answer three simple questions about diversification, inflation, and compounding correctly.
While knowing what not to do is good, knowing what to do is even better. Fortunately, it’s never too late to learn as being financially literate provides substantial benefits. Having a basic understanding of financial planning can help you make more informed and successful decisions about your money. This will also better prepare you financially to face unexpected life events. You’ll also be able to identify areas you need to master to secure your current and future financial comfort, like saving for retirement or managing debt. By recognizing fraud and financial abuse more quickly, you’ll prevent irreparable damage to your financial situation.
With the Canadian government’s initiative on promoting financial literacy, now is the perfect time to brush up on financial concepts. Still wondering about contango? It’s when the current price (also known as spot price), is lower than the futures price in futures trading. From books to blogs to educational seminars, there are a wealth of resources available to increase your financial literacy, including the Financial Consumer Agency’s Financial Literacy Database. As part of our vision to empower your financial future, our own knowledge and support resources are also here to help with webinars, FAQs, how-to guides and more posts right here at The Ticker.
Financial literacy is more than just know-how, it’s a life skill. At the end of the day, it’s your money and educating yourself now won’t only mean you are more financially secure later, but also protect your wealth for future generations.
 Financial Literacy and Retirement Planning in Canada, U.S. National Bureau of Economic Research (NBER), July 2014