Posted on 05/09/2014 8:48:55 AM PDT by SeekAndFind
Here’s a frightening fact via The Atlantic’s Moises Naim. Roughly half of the world can’t answer these three questions correctly:
1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow? A) more than $102; B) exactly $102; C) less than $102; D) do not know; refuse to answer.
2. Imagine that the interest rate on your savings account is 1 percent per year and inflation is 2 percent per year. After one year, would you be able to buy A) more than, B) exactly the same as, or C) less than today with the money in this account?; D) do not know; refuse to answer.
3. Do you think that the following statement is true or false? “Buying a single company stock usually provides a safer return than a stock mutual fund.” A) true; B) false; C) do not know; refuse to answer.
Even worse – 70% of Americans can’t answer all three questions correctly. And we wonder why the world seems to have so many persistent financial problems. We don’t even come close to understanding the construct of money or how it should be used.
(Excerpt) Read more at businessinsider.com ...
The assault on basic math, English and science by the left wing has left us with a nation of numbskulls.
Which is what the liberals want. Numbskull voters will buy the Gorebull warming bs and leave the financial part of their life to the left wing politicians.
That’s a joke, right?
Love the see the answers from Obama’s economic advisers.”
And from most members of Congress.
0, she should ask the government to provide her the stickers becuase she has a right to stickers.
If Lawanda has 2 kids and Knesha has 5 who gets more in welfare benefits
A, C, B
My mom thinks that the bank is the safest place for her money. I can’t get her to understand that with inflation she is actually losing money.
You only proved you cannot divide by zero.
(A-B) = 0
“I like money.”
Where is that bank and who do I have to *#@$(@#( to get a 2% rate?
The average Amercan can’t tell you who the Vice President is.
RE: (A-B)(A+B) = B(A-B)
cancel the common factor on both sides
____________________
What could go wrong if you divide 0 by 0?
If George’s debt was $8 trillion, and Barack’s debt is $17 trillion, how evil do Republicans have to be if they do not want to raise the minimum wage to $10.10?
Question: You earn $35,000 per year after tax and your living expenses are $30,000 per year. You want to buy a $25,000 car. How many years do you have to save to get it?
Answer: None. I go on food stamps, default on my rent and buy the car immediately. Then when I can’t make the payments, I scream to the newspapwers that the greedy rich bastards at the car dealership are screwing the little guy and force them to forgive my debt.
For probably many, many of the LIV types and even others who consider themselves to be “financially knowledgeable”, they have never had a savings account, and would not contemplate having one, as they spend every cent they get as fast as it comes in. They would have no reason to even think about stocks or mutual funds.
PILPUL ALERT
#3 cannot be answered accurately, for two reasons.
First, many individual stocks have a lower beta than many stock mutual funds: for example, Kraft Foods (KRFT) would probably be safer than the Fidelity® Low-Priced Stock Fund (FLPSX).
Second, a “safe return” only occurs when a stock actually appreciates in value, and/or provides a dividend. If the stock market in general is losing value, contrarian stocks will appreciate in value, so buying an SP500 fund or a Russell2000 fund in a stock market recession would provide a negative return, while purchasing a dividend-producing stock of a company providing necessities—like, for example, Kraft—would provide a “safe return.”
Anyone with an IQ of average or better could be taught this, though it generally only begins to be taught in college-level microeconomics courses, or in MBA-level personal finance courses.
While a company stock to a large extent guarantees that you will get a return which mirrors the company's performance, a stock mutual fund guarantees only that the manager will earn a commission.
That's not necessarily a bad thing if the manager or management company earns it. But it is never a good thing if they don't.
Interesting math equation : )
*#@$(@#( to get a 2% rate?
Same as me. Correct on all three.
“Refuse to answer” was my most common response on the last census form.
I just bought a car on Thursday and I knew that the loan rates they were giving me were all the same total amount in the end...
Let’s see, lower the car amount by $500 then raise the interest rate, lower the monthly rate. Lower the interest rate, raise the monthly rate. Throw in some oil changes. You end up paying the same amount for the car. They either get you upfront or in the back end with the financing.
BTW the CarFax readout showed 3 previous owners. One of which had the car repossessed after about 5 months.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.