I had raised this issue of Financial Illiteracy in my post “Financial Illiteracy – An unaffordable Luxury” on 25th October 2008 and then followed in up with “The First Step towards Financial Literacy” on 2nd November 2008.
This was till we got seriously derailed by dramatic events of 26/11 and thereafter.
I think it is time we get back on track and bridge this wide gap of over two months.
Let me recap on what I have covered so far.
In the first post “Financial Illiteracy – An Unaffordable Luxury”
Money is empowering and liberating and we put such immense effort to acquire more money in our lives. This process begins right from childhood and we spend time training ourselves to earn an then earning money. We then reach a sort of dead end as we are utterly incapable of managing this money. Much of this is due to our “Financial Illiteracy”
With passage of time those yesteryears seem so simple and golden. There were few choices and Financial Planning seemed an unnecessary luxury.
However, with changing times, there has been a trade-off and we now have choice, sophistication, advice, facilities, information, ease of transaction at the cost of risk, volatility, uncertainty and complexity.
It is, therefore very critical, that we are equipped to navigate through this maze and understand the basic concepts.
In the second post “The First Step towards Financial Literacy”, I looked at
Our financial position is not to viewed in isolation but is a byproduct of how we live our lives and our attitudes, values and upbringing. Once basics are understood, further build-up are
The whole game has three dimensions
Incomes and capacity to earn
Expenses, and
Resultant surpluses which becomes our retained wealth and available for investments and management.
These three dimensions cover the complex variables that inter-twine to influence our lives. It is important to also remember that each person / family is unique and has a different requirement. There is no standardized “One size fits all” solution here.
This recap brings us back into focus. The next post talks about the first dimension – Incomes.
4 comments:
Mavin, You have hit upon such an important issue - financial illiteracy! It is so true that so many of us are so incapable of managing money! So true - 'Our financial position is not to viewed in isolation but is a byproduct of how we live our lives and our attitudes, values and upbringing.' I have seen the difference in the way people in UK handle finances - the financial illliteracy statistics will be exceptionally high here. I am now going to read your previous posts on this!
Mavin, good to see you get back to a very important subject,particularly in these times when people, including yours truly, have seen a lot of notional profits go up in notional smoke.
Looking forward to some insightful gems from you. Why don't you call them "Mavin's Mantras for Financial Freedom?" or something like that?
Mavin, thanks for the recap. In these uncertain times, financial literacy is essential.
Looking forward to further posts on this subject.
Yes, Mavin, we certainly need some serious financial education. In fact the first one is the most intriguing one most people ignore. We take income for granted. Looking forward to some great insights from you!
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