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Let’s take a test. Here are the rules: Use anything or anybody you can. Take as long as you want. {I always dreamed an instructor would say those words to me one day!}
The below questions were developed by the Financial Capability Organization to help test YOUR financial literacy.

1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After 5 years, how much do you think you would have in the account if you left the money to grow? Answer Choices: more, less, or exactly $102.

2. Imagine that the interest rate on your savings account was 1 percent per year and inflation was 2 percent per year. After 1 year, how much would you be able to buy with the money in this account? Answer Choices: more, less, or the same as today.

3. Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.” Answer Choices: True or False

4. If interest rates rise, what will typically happen to bond prices? Rise, fall, stay the same, or is there no relationship? Answer Choices: Rise; Fall; Stay the Same; No Relationship

5. True or false: A 15-year mortgage typically requires higher monthly payments than a 30-year mortgage but the total interest over the life of the loan will be less. Answer Choices: True or False

The answers are posted at the very end. Your score is NOT important. What you do to build your knowledge is important.

If you have been reading my blog (thank you!) you know Americans are not saving enough for a “SUSTAINABLE” retirement. Sustainable is a fancy word for NOT running out of money in retirement! Kinda an important issue, given life expectancy has increased. There are numerous studies showing the projected shortfalls, by age, income, education level etc. But the important issue that MUST be resolved, what remedies, if any, should be taken? I suggest two priorities are: increase your investment CONFIDENCE by increasing your finance and investment COMPETENCY and get off your behind and do something!.

I have been startled talking with people in various careers and education levels who are struggling with the concept of saving for the future. Doctors, Engineers, Vice President’s and people with income of $200,000 or more are going to have a significant financial shortfall if they ever stop working. Now I don’t know about you, but I do NOT want to be a Wal-Mart Greeter in my old age. My apologies for those who do it and enjoy it. It’s time to understand your weaknesses and change! This is one of the key reason I sit at my desk and try and write this blog every week.

Let’s look at three (3) reasons for shortfall in savings:
1. We do not have the knowledge needed to save for retirement.
2. We do not have the self-discipline to save for retirement.
3. We do not have the excess funds (after paying all our expenses) to save for retirement.

Are the above reasons or excuses? I have used all three in my past. To me the above reasons/excuses indicate we have a lack of “Financial Competency”. Majority of our education schooling barely says the words financial and investment literacy.

WHAT ARE WE DOING ABOUT IT!

Becoming competent in anything does not happen overnight, by reading one book, or hoping for it. If that was the case I would have graduated from college with a 4.0. I had to settle for a 3.98- I WISH! Competency happens through education, practical experience, and mentoring and life lessons. Here are the top ways to help improve your financial and investment competencies:

1. LET”S GET IT STARTED – RIGHT NOW- NO MORE EXCUSES
Increase your knowledge about: interest rates, stocks, bonds, mutual funds, life insurance, disability insurance, estate planning, social security, how credit cards work, credit scores, saving for the future, social security, real estate, insurance, retirement, and taxes and MORE. Tackle one topic at a time. Start with the one you are most interested in learning and begin to build a solid foundation of financial know-how. If you need life insurance, start studying the various types and companies that offer the product. Then (wait for it) buy the life insurance. Preparation, without action, accomplishes little.

2. USE FREE U.S. GOVERNMENT RESOURCES
The U.S. government is publishing more literature to help us learn about personal finances. How many of you knew Congress declared April “Financial Literacy Month”? I actually did NOT. Great job communicating this fact!. Check out the following government websites:
1. Financial Literacy and Education Commission is affiliated with the U.S. Treasury Department, and its mission is to improve financial literacy by coordinating efforts between the public and private sectors.
2. MyMoney.gov is dedicated to teaching the basics about financial education. You can find advice on subjects like buying a home, balancing a checkbook, or investing in a 401(k).

3. READ NEWSPAPERS AND MAGAZINES (And for those who dislike reading, listen to audible materials)
• Financial section of your local/regional/national newspaper.
• Finance and business newspapers like the Wall Street Journal and Investment Business Daily
• The Kiplinger Letter remains the longest continually published newsletter in the United States.
• Additional magazines to check out are Barron’s, Fortune, Forbes, and Money, etc.

4. SEARCH THE INTERNET
There are many online resources to increase your financial literacy. Many of the cable news networks, such as CNBC, have websites with a finance tab. And I know by authoring this blog weekly, you can research any finance and investment topic using Google.

5. FINANCIAL AND INVESTMENT CLASSES
Take a class at your local community or four year college. Your public libraries often times offer inexpensive or free finance and investment courses. If you prefer to stay at home, take a course through an online college, The Great Courses, Khan Academy, etc. offer excellent inexpensive courses. There are also a multitude of self-help books and workbooks that teach finance and personal money management. I have six of the “For Dummies Books”. I love these books as they simplify concepts into plain English.

6. FINANCIAL PODCAST, YOU TUBE, RADIO
There are many radio talk shows and podcast that offer financial advice. Learn from callers’ questions and financial dilemmas. Warning – some shows/podcast are infomercials promoting services or products. Always double check (and triple check) any financial advice being offered.
National radio shows that offer financial advice include:
• The Dave Ramsey Show
• Moneytalk with Bob Brinker

7. FINANCIAL AND INVESTMENT APPS
You can solve time-value-of-money calculations such as annuities, mortgages, leases, and savings. The EZ Calculators app is my favorite.

8. START AN INVESTMENT CLUB
I belong to two investment clubs. The purposes of an investment club are to learn about investing in equities (stocks, mutual funds, ETFs, etc) and make a positive return on investments. This is a long-term commitment for a group of 4-10 people who want to learn about the stock market through investments in stocks. The National Association of Investors Corporation is a nonprofit organization that offers investment education and practical investing experience through investment clubs.

9. DON’T FORGET YOUR KIDS!
Open a savings account and teach your kids how to save. Starting to learn about money management when young is key to improving financial literacy as an adult. Organizations like Jump $tart Coalition for Personal Financial Literacy, a national coalition of organizations, tries to improve the financial literacy of K-12 and college students through advocacy, research, standards, and educational resources.

10. WATCH INVESTMENT AND FINANCIAL TELEVISION SHOWS
Watch television programs offering financial information.
Here are some television channels that offer well-known financial programming:
• CNBC TV
• Bloomberg TV
• Fox Business News

11. SEEK EXPERT ADVICE
Talking to an experienced advisors, such as CPA, or Certified Financial Planners, who can help people understand how to budget and save. An advisor can also look at how they are handling credit and debt and make suggestions on how to pay off, consolidate and manage finances with a plan for achieving a goal.

12. BUILD AND UTLIZE YOUR NETWORK
Whether it’s a podcast, webinar, e-book or blog, there are thousands of educational resources to help us improve our personal finances. While these resources are valuable, don’t ignore the opportunity to gain expert advice from your immediate network. Utilize the knowledge (and lessons learned) from your circle of successful friends, family members, your boss or even your CPA.
Many of the larger churches offer finance and investment workshops.

CONCLUSION

If all you know about money is how much it cost you when you bounced your last check, it’s time to get a wee bit more financially competent. Understanding investment opportunities, market trends and how the economy works is incredibly important for building and growing your wealth. For living a sustainable (NOT RUNNING OUT OF MONEY) retirement. Getting smarter about your money is not complicated or time-consuming. Take a few minutes a day to educate yourself and form smart, simple money habits, and you can be well on your way to improved financial
Finally, RESPECT yourself and get the knowledge you need. I will leave you with the Queen of Soul talking about R-E-S-P-E-C-T!

Let’s see how well you scored on the FINANCIAL Literacy test versus a 2015 group of average Americans. Answers are highlighted below
1.MORE – This is testing knowledge of interest rates. 75% gave the correct answer of “more than $102,” 8% said “exactly $102,” 5% “less than $102” and 12% said “don’t know.”
2.LESS {In the 2015 survey, 59% answered correctly, 20% said “don’t know,” and 10% each answered Exactly or more than today.}
3.FALSE {46% answering correctly – “false,” 10% “true” and 44% replied “don’t know”}
4.FALL
5.TRUE

Click below if you want to take above FINANCIAL LITERACY QUIZ or the 10 question -INVESTOR LITERACY QUIZ
http://www.usfinancialcapability.org/quizzes.php

DISCLAIMER
I am a proud nerd (my beautiful wife and daughter told me so) investment and finance blogger, with a Rutgers, MBA and Harvard, Advanced Management. I am a successful investor in equities and real estate and happy to share my personal finance and investment lessons learned with you. I am NOT however, a licensed financial advisor. Please do not construe my suggestions on this blog, as recommendations for your personal situation. For individual finance advice please seek your own licensed CPA or financial advisors.