At Last, The Secret To Financial Literacy Is Revealed

finance literacy

Financial education can be defined as the ability of a person to make the decision at intellect level by knowing how, money works, How the whole demand and supply works, how economics plays important role in our lives and helps to make decisions related to our finances. But,

why is financial education important?

Financial Education

If a person knows these issues he can make the best decisions for managing his personal finances. This ends up being reflected in greater stability of your income and expenses; greater savings to acquire movable and immovable property; greater possibilities of covering unforeseen events, such as accidents or illnesses, or going on vacation; and even in a higher quality of life, especially for the issue of saving for retirement. Thus, financial education is a necessity within the current economic system to make the best decisions regarding our income and expenses.

At the country level, a population with sufficient financial education causes a better allocation of resources. For example, there is no idle money, because people’s savings are found in banks, which in turn lend to companies that will give a productive end, thus increasing investment and with it, technology, growth, and development of the nation.

It also reduces the social problem of the inability of pensions to provide a decent life for retirees, since people consider saving for retirement within their plans.

Due to the importance of financial education and the possibility it affords to make better-informed decisions, its lack of distribution, especially among people from low socioeconomic levels, could be considered a market failure within the framework of information asymmetries. Therefore, there must be governmental and private initiative efforts to spread this issue among the population.

It should be noted that financial education is a necessary condition for the quality of life of people and for their growth and development of countries, especially developing economies whose coverage in this area is lower than in developed nations. For this reason, it is necessary that policymakers seek to spread the issue to the entire population and guarantee the conditions that allow people to exercise their new knowledge on the subject.

how financialy literacy works

Financial Literacy also includes the study of Economy, How inflation affects us? Healthy inflation good for the country, Why Einstein said that Compounding Interest is the eighth wonder of the world, Knowing the Power of Compounding, how the stock market works, interest rates, Mortage, Debentures, how the whole banking system works? How the increase in Repo rate reduces inflation? Understanding of types of investments, Bonds, ETF, etc.

Why there is a need of everyone Should be Financially Literate?

If you ask a banker

The banker reply would be:

If everyone becomes financially literate knowing the power of Compounding and EMI traps, Who would take the loan from us? and therefore we need to shut down our banks

Why Indians are lacking in Finacial Literacy?

According to the survey held on 2013, on the people of 16 to 64 years of age, In the case of financial literacy i.e. banking, savings and investment, India comes in the last place from 16 countries in the Asia Pacific region.

Because we  Indians do not even know that there are some studies related to money, there is some information which can be learned and can not only be used to make money, but money can also be made from money. That means their money can also work for them, they can earn for them.

Indian finanacial literacy

If someone asks from us how can you raise your saving, that is, to do money to make money, The answer would be should invest our saving in the property, there is nothing more to know than that and who knows a bit more than these, they say investing in gold.

About 99% of people, who make their own life insurance, only consider that insurance as their investment, while the truth is that insurance is not only investment.

As 99% of people think that the stock market is a gambling, Lets Analyze this, to get a job you need to have a skill, training , education in that particular field, You and I have spent more than 12 years in it,And on the other side we don’t even spare to spend 5 minutes for it,Can we expect equal returns?


Stock Market is not gambling, but when you invest in the stock market, then your money goes to the Indian industry, creating new jobs. This is not only the economic development of Indian industry but also with the promotion of companies, the value of your share also increases, which also gives you economic growth.

So Educate Yourself for about Financial literacy, and understand how the whole system works, and raise your standard by doing investment because of stock market investment not help u only it helps the entire nation, As someone said Don’t invest your money on NGO’s Invest your time there and invest that money in the stock market in order to make a better nation, More Investment highly attract new startups, results in reducing unemployment.