Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

'Striking weaknesses' in adult financial skills

bbc.com

Post reply on HN
Print view View original

21–30 of 140 posts

Re: 'Striking weaknesses' in adult financial skills

#21

Post by sergioisidoro »

volgo wrote: post #3

Some of the skills tested in the study seem more like arithmetics rather than financial skills: - "About a quarter could not work out how much change they should receive from a shop..." - "About one in three adults struggled to work out the price they had to pay.. per litre or per kilo" - "About half could not read a simple financial line graph" - "Most struggled to calculate discounts involving more complex calculat…

This! I'm horrible at mental arithmetics and I have a degree in engineering. Everyone has access to a calculator in their pocket anyway, and ... Who's going to pay with cash within a couple of years?

To add to what you said: I think explaining basic concepts is the way to go: Explain compound interest, how much 1$ today will be worth in their retirement at a fixed rate. How does money devalue with inflation, and other basic personal finance aspects. But above all, give people the intuition rather than just say "you should invest your savings"

Re: 'Striking weaknesses' in adult financial skills

#23

Post by shaki-dora »

kartan wrote: post #5

If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest. If what you have is companies powered by complex financial systems and artificial intelligence help while consumers are not able to get a discount right, you are going to end with all money in one side of the table with the other empty handed. This is another reason to improve our education systems…

homo economicus as an idea only became popular when economists noticed that it doesn’t exist.

In this context, you are probably right: the skills this study tested are probably something we need people to have. But zoom out a bit and it’s probably a lost case, and ethically dubious, to get people to conform to an ideal only to make a system work that is supposed to serve them.

Capitalism is a tool. It’s the best we currently have. But it’s not a moral philosophy or an end in itself.

Re: 'Striking weaknesses' in adult financial skills

#24

Post by scarface74 »

hammock wrote: post #7
volgo wrote: post #3

Some of the skills tested in the study seem more like arithmetics rather than financial skills: - "About a quarter could not work out how much change they should receive from a shop..." - "About one in three adults struggled to work out the price they had to pay.. per litre or per kilo" - "About half could not read a simple financial line graph" - "Most struggled to calculate discounts involving more complex calculat…

How are you supposed to monitor your spending if you cannot figure out how much you paid for chicken?

This reminds me of the myth of the "Latte Factor".

http://www.slate.com/articles/business/the_united_states_of_...

Re: 'Striking weaknesses' in adult financial skills

#25

Post by djhworld »

Kuiper wrote: post #8
volgo wrote: post #3

Some of the skills tested in the study seem more like arithmetics rather than financial skills: - "About a quarter could not work out how much change they should receive from a shop..." - "About one in three adults struggled to work out the price they had to pay.. per litre or per kilo" - "About half could not read a simple financial line graph" - "Most struggled to calculate discounts involving more complex calculat…

Especially when you consider that most supermarket labels will also include the "price per unit weight" or "price per unit volume" on the shelf with a smaller font, it becomes trivially easy to compare which bottle of soap is going to get you the most for your money. Or maybe you neglect to do this (simply opting for the container that looks the most appealing rather than optimizing for the amount of liquid per dolla…

I guess the problem for the older generation, especially here in the UK, is they were raised on imperial units and have never really gotten used to metric.

Not saying that excuses it, but it could explain part of the reason why some people don't fully grasp the £-per-X calculations

Re: 'Striking weaknesses' in adult financial skills

#26

Post by golergka »

kartan wrote: post #5

If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest. If what you have is companies powered by complex financial systems and artificial intelligence help while consumers are not able to get a discount right, you are going to end with all money in one side of the table with the other empty handed. This is another reason to improve our education systems…

> If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest.

Capitalism works just fine. There're plenty of mechanics that punish people for their own stupidity.

Re: 'Striking weaknesses' in adult financial skills

#27

Post by ZeroGravitas »

golergka wrote: post #26
kartan wrote: post #5

If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest. If what you have is companies powered by complex financial systems and artificial intelligence help while consumers are not able to get a discount right, you are going to end with all money in one side of the table with the other empty handed. This is another reason to improve our education systems…

> If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest. Capitalism works just fine. There're plenty of mechanics that punish people for their own stupidity.

The theoretical support for why capitalism is a good system, assumes people aren't stupid and only make trades and decisions that are rational and good for them though.

Arguing that you're going to take advantage of the weak, the old, the distracted, the powerless and the terrified may be a refreshingly open take on capitalism, but it's not what it's sold on.

Re: 'Striking weaknesses' in adult financial skills

#28

Post by sokoloff »

scarface74 wrote: post #24
hammock wrote: post #7

Earlier quoted context omitted.

How are you supposed to monitor your spending if you cannot figure out how much you paid for chicken?

This reminds me of the myth of the "Latte Factor". http://www.slate.com/articles/business/the_united_states_of_...

It's an exaggeration more than a myth, IMO. It's directionally correct, meaning no re good would be done by people considering it than ignoring it.

Re: 'Striking weaknesses' in adult financial skills

#29

Post by golergka »

ZeroGravitas wrote: post #27
golergka wrote: post #26

Earlier quoted context omitted.

> If you want capitalism to work, you need some kind of "homo economicus" that is able to look for their own selfinterest. Capitalism works just fine. There're plenty of mechanics that punish people for their own stupidity.

The theoretical support for why capitalism is a good system, assumes people aren't stupid and only make trades and decisions that are rational and good for them though. Arguing that you're going to take advantage of the weak, the old, the distracted, the powerless and the terrified may be a refreshingly open take on capitalism, but it's not what it's sold on.

> Arguing that you're going to take advantage of the weak, the old, the distracted, the powerless and the terrified may be a refreshingly open take on capitalism, but it's not what it's sold on.

The fact that your strength, youth, concentration and wit will give you an advantage over others is exactly why capitalism is fair and awesome.

Post reply on HN