26-08-2012, 03:03 PM
To me, the first and most important reason is that there is inflation. If the world is in a deflationary or no-inflation environment forever, I would not think about investment at all. I probably would just work to earn money and save it for retirement. But deflation is temporary(though deflation can be as long as 5 or 10 years, for one's lifetime, it is still considered short), inflation lasts forever. Inflation makes whatever I save become less and less in the future. Can my earning power grow at the same with inflation til the day I am gone? Or any government has any simple financial instruments to guarantee that? Unlikely. At some point, younger people with more advanced knowledge will surely challenge my earning power. Slowly, not only, my earning power can't pace with inflation, but my earning power could deteriorate. To me, the only way out is to invest.
In this sense, financial literacy is as important as being able to read and write(maybe more important?)as everyone will grow old and retire and saving is unlikely to ensure it because of inflation. Why does the current education system not include it as a basic course?
In this sense, financial literacy is as important as being able to read and write(maybe more important?)as everyone will grow old and retire and saving is unlikely to ensure it because of inflation. Why does the current education system not include it as a basic course?