Meir Statman : How Financially Literate Are You Really? : The Wall Street Journal
Meir Statman, Glenn Klimek Professor of Finance, discusses how questions referring to financial literacy should focus on improving individual’s financial behaviour through enhancing financial comprehension in an article he wrote for the The Wall Street Journal. Statman introduces eight different questions that test these aspects of an individual’s financial literacy. The piece has been picked up by other news outlets including CNBC.
Questions brought forth in the article:
The price of a venti latte at Starbucks is a bit more than $4, amounting to approximately $500 a year if you drink 10 lattes each month. If you are 25, the $500 from just one year’s worth of lattes would compound to a bit more than $5,000 in the 40 years until your retirement at 65, if you save it in an account yielding 6% annually. So it is best that you forgo lattes.
True or false?
You can beat the market by buying and holding FAANG stocks (Facebook , Amazon, Apple, Netflix and Google). “After a decade or so, it has made me stinking rich,” Jim says.
True or false?
Learn more about Professor Meir Statman »