When it comes to money, are you smarter than average?
Just like their driving, most Canadian consumers think their own level of knowledge about finances is far above that of the "average Canadian", according to a recent RBC study.
Most (70%) describe their own financial smarts as "excellent/good", but only 30% are inclined to say the same about their neighbours.
Another example of Lake Wobegon effect? Probably, particularly when you consider it's pretty tough for the majority of people to be above average when it comes to money issues -- or anything else for that matter.
Nonetheless, most of us seem to believe that we've got the inside track when it comes to finances.
In fact, almost two thirds (65%) think that the average Canadian's level of financial knowledge is "not very good" and needs attention. At the same time, roughly the same percentage (64%) believe that financial literacy, or the lack of it, is a serious issue that requires improvement.
What about you? Do you you think you've got a bit of an edge when it comes to financial issues?
By Gordon Powers, MSN Money
Posted by: Mike | Sep 25, 2021 1:38:29 PM
I for one am smarter than 100% of all other individuals in terms of managing personal finances. The only reason my portfolio lags the market every year is because all other investors out there don't follow my predictions/market timing.
Posted by: Ike | Sep 25, 2021 4:09:02 PM
@ Mike... I see that you are a legend in your own mind :-)
Posted by: Fallen | Sep 26, 2021 8:34:35 AM
@ Mike
You must be a retired Billionaire by now. Keep patting youself on the back, self praise is better than no praise. The world needs your kind for relief from the real world.
Posted by: Jim | Sep 26, 2021 4:27:41 PM
I'm a financial idiot. I accept my pay and base my savings in Dollars instead of Silver.
On the bright side, I've got over 98% of the country as company.
Posted by: Mike | Sep 27, 2021 2:42:12 PM
If any of you would like me to manage your assets, I charge a 3% management fee (which is just a shade higher than the top hedge funds-I am after all smarter than 100% of all the other investors out there). Let me know.
Posted by: Western Guy | Sep 27, 2021 7:10:58 PM
Most people unfortunately know almost nothing about finance. I think it almost criminal that our school system teaches people near useless math such as Sign and Co-sign but doesn't teach financial basics like calculating payments of compound interest, how vehicle leases work versus ownership, how to calculate a true ROI, how taxes are applied to incomes, and how inflation effects their day to day lives.
Most people "shudder" get their financial knowledge from banks which often pass on really flawed advice. If I have to listen to one more person tell me how much better bi-weekly mortgage payments are I will cry. In case you are one of the "believers" in this myth think of it this way. If you have a 100K mortgage and make monthly payments of 800 at a 4% interest rate going to biweekly saves you about $8 a year of interest. Meanwhile lots of people will carry debt on credit cards that they could otherwise pay off.
Basic financial knowledge doesn't have to be complex. Realistically if you can learn your way around excel and be practical in your application you will do just fine.
Practical application. If you have credit debt phone the company TODAY and ask how you could possibly get a lower interest rate. If they say no ask if you can switch to a different type of card. Seems simple but after this advice a friend of mine cut a 20% interest rate on 15K debt to 8%. That saved him $150 a month in interest just for picking up the phone.
Posted by: Patrick | Sep 28, 2021 4:47:46 PM
@Western Guy
You don't pay the fee on the card to get the lower interest rate because that's plain stupid and throwing money away.
You grab yourself an Unsecured line of credit and pay off the card in total using that. You then cut up the card and do not get yourself a cheque book for the line of credit.
Not only do you save the monthy fee you can lower you interest rate up to 20%+ (Some card like the Home Depot Card or other department store cards carry an incredible 28.99% Interest rate)
Using this method of paying off debt you can save hundreds of dollar PER MONTH which can be put towards your debt to futher reduce it or pay it off sooner.
My personal interest rate on my unsecured line is only 4% and most people can even be approved for close to 6%. That's a far cry from the 20% your friend had and does not include the fee most credit cards will charge monthly to force the interest rate lower, nor does it include any fee like many credit cards have (either monthly or yearly)
Posted by: @ Patrik | Oct 1, 2021 5:51:34 PM
4% isn't too bad. I have been fortunate enough to get a LOC at 1% (which has afforded me some nice investments returning much better than that) as well as my mortgage that low (special deal my wife gets through her company). Anyways carrying credit card debt isn't ever advisable however my advise was for the people that have that debt and can't get a line of credit. I appreciate you grabbing one detail and running with it but consider where the entire package is coming from.
Posted by: Susan Smith | Oct 2, 2021 5:23:47 AM
I need help with money issues. I am trying to sell my house in Nova Scotia but meantime paying the mortgage and utilities while I live and work in Ontario and rent a home. I have a debtload of 30,000 including car, and personal loans. I would like to consolidate all 4 and make one loan but my credit score is only 600 according to equifax, the last time I looked. My car loan is a high interest 18% and all these payments are making it very hard to live. I don`t want to get into anymore debt or have any more problems. Is there private investors that would give me a loan with like a 9-10% interest rate. I am in a stable full time job in which I earn 57,000 a year.
My late husband and I declared bankruptcy in 2006 and discharged in 2007. My husband took sick and I only worked on Sundays for a while and then part-time after his death in 2010 and widow`s pension. I could not keep up paying my house and utilities and bills so i had to come back to Ontario to get a full-time clergy position. I need a break desperately. Is anyone listening, can anyone help
Posted by: PaydayDesk.com | Oct 4, 2021 6:06:16 AM
Well, it's hard to say that there are lots of people who are really smart about their finances. As for me, I can not say that I always make wise financial decisions, but I work on it and try to learn from my own mistakes. In these tough economic times it's difficult to avoid borrowing money, lots of people live in debts and spend more than they earn. It's important to work on your financial habits and try to live within your means. It's necesary to control your finances, put everything in writing and avoid spontaneous financial decisions.