Financial Literacy, How Bad Is It?

Financial Literacy, How Bad Is It?
10 Aug 2016

There is no question; America has a financial literacy issue. A report from the FINRA Investor Education Foundation says that two out of every three American adults “lack financial literacy” and that approximately 37% of Americans could pass a basic economic/financial knowledge test. More from the study:

9% are underwater on their home mortgage
21% have overdue medical bills
18% of respondents spend more than they earn
32% pay only their minimum balance on their credit cards

Why is this the case? We have more information than ever before; shouldn’t we be smarter? Maybe in reality, that’s the problem. We are bombarded with over-complicated information, and varying opinions from the media.

It was once said “Traditional economic theory suggests that investors are rational decision-makers, carefully weighing all available information to make choices that result in the best possible outcome” (Legg Mason report on behavioral finance). If only this was true and that simple! The reality is Americans and the world for the most part struggle with basic economic concepts and financial terminology. Until this changes I fully expect a continued disconnect from retirement reality and retirement fantasy. We are inspired to continue providing as much education as we can to hopefully see those statistics, provided above, change for the better.


Good Luck!


Jeffrey Johnston

Jeffrey is originally from Solon, Iowa. He currently resides in Swisher, Iowa with his wife, Prudence, and his three children, Seth, Ian, and Roman. He graduated from the University of Northern Iowa in 1989, where he majored in Finance and Investments. He has 24 years of experience in the investment and estate planning business. He is currently the President of “Premier Investments of Iowa, Inc.” Jeffrey’s main focus is Estate and Investment Planning for Senior Citizens and Pre Retirees. Jeffrey became a Chartered Financial Consultant (ChFC) in 2001. He is the author of many articles on industry related topics and he is a frequent seminar presenter. He is a Board Member TRIAD Linn County Seniors Against Crime, and he is also a past Board Member of the Heritage Area Agency on Aging Task Force. He is a member of CEO Roundtable in Cedar Rapids, a Daybreak Rotary Member, and a member of the Cedar Rapids Estate Planning Council. In March of 2009, Jeffrey became the host of the Premier Investments of Iowa Financial Hour which airs every Tuesday Evening from 6PM -7PM, on WMT 600 AM Radio. In his free time he enjoys golf, fishing, scuba diving, traveling, and coaching son’s basketball teams.