Here are some thoughts from the book The Net Worth Workout: A Powerful Program for a Lifetime of Financial Fitness (see my rating for details) on the value of financial intelligence:
One of the most important steps in becoming financially fit [is] increasing your level of awareness of how you think about finances. According to Annamaria Lusardi, an economics professor at Dartmouth College, that step alone can add significantly to your bottom line.
Lusardi has shown that offering workers seminars on financial planning and retirement topics significantly increases their wealth. Such programs, according to the study, can increase employees' wealth by 15 percent to 20 percent -- regardless of their respective income levels.
I TOTALLY believe these numbers. In fact, they seem low if anything. I would think that if people learn just the basics of financial planning and apply them to their lives, they would be much, much, much better off -- much more than 20%. Then again, maybe it's the "and apply them to their lives" part that hampers the results. Maybe all of them get the education, but those who don't apply the learning -- probably a majority of people -- depress the results to "only" 15 to 20 percent.
So my suggestion is: Keep reading and applying the principles we talk about at Free Money Finance, and you'll be at least 15 to 20% better off financially. ;-)
Awareness is key. Just knowing where your money is going and what you want it to do helps enormously in making future plans.
If you feel stupid and overwhelmed, you tend to throw up your hands and do nothing!
Posted by: Sole Searching | February 01, 2007 at 09:58 AM
Just remembered why I added this page to my "re-visit" favorites. I'm surprised at the lack of comment but maybe because it was a short post.
However, I also echo the sentiment that awareness plays a very big part in one's financial fitness
Posted by: Vince @ InvestorGeeks | March 05, 2007 at 11:55 PM