“Financial illiteracy is a major contributor to the economic struggle that many Americans face."
Among affluent U.S. investors, regard for their own financial literacy increases with wealth level, according to 2012 wealth level studies conducted by Millionaire Corner.
Financial literacy is an integral component of achieving the American Dream. “Financial illiteracy”, writes Vince Shorb of the National Financial Educators Council. “is a major contributor to the economic struggle that many Americans face. The average citizen battles debt, struggles with financial decisions, and will experience retirement shortfalls. These financial problems often lead to health problems, emotional stress, and decreased productivity.”
Affluent households put the highest premium on hard work, education and smart investing as factors in their success, and are primarily concerned with maintaining their current financial position, our ongoing research finds. But the less wealthy affluent investors are not as confident in their knowledge of financial products and investments as their wealthier counterparts.
In households with a net worth between $100,000 and $1 million (not including primary residence)m only 8 percent of investors considered themselves very knowledgeable about financial products and investments. More than half (55 percent) said they are fairly knowledgeable, but with a great deal to learn, while one-third said they do understand some things, but are not very knowledgeable.
In comparison, three times as many Millionaires investors (with a net worth between $1 million and $4.9 million NIPR) consider themselves very knowledgeable about financial products and investments, while 62 percent overall consider themselves fairly knowledgeable, and only 17 percent saying they are not very knowledgeable.
In Ultra High Net Worth households with a net worth between $5 million and $24.9 million NIPR, one-third consider themselves very knowledgeable, while 54 percent say they are fairly knowledgeable with a great deal to learn.
America’s wealthiest households, those with a net worth of at least $25 million, are the most confident in their financial knowledge. Almost half (45 percent) say they are very knowledgeable.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.