{"id":32187,"date":"2012-09-10T05:22:16","date_gmt":"2012-09-10T09:22:16","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/2012\/09\/how-to-get-rich-and-not-get-taken\/"},"modified":"2012-09-10T07:21:53","modified_gmt":"2012-09-10T11:21:53","slug":"how-to-get-rich-and-not-get-taken","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2012\/09\/10\/how-to-get-rich-and-not-get-taken\/","title":{"rendered":"How to Get Rich\u2026 and Not Get Taken"},"content":{"rendered":"

Article by Investment U<\/a> <\/p>\n

Last week, the SEC released a wide-ranging report on financial literacy in the U.S. And the conclusion is clear: We\u2019re not there yet. Not even close. Yet the consequences have never been greater.<\/p>\n

Corporate pension plans have gone the way of the Passenger Pigeon. And without serious reform, Social Security \u2013 according to that agency\u2019s own website \u2013 will soon be done in by time and arithmetic. At the very least, the age of initial eligibility is likely to be raised dramatically in the years ahead\u2026<\/p>\n

To a great extent, we Americans are on our own. Yet need to understand basic financial concepts \u2013 and apply them. Yet the SEC report \u2013and others like it \u2013 show that the vast majority aren\u2019t ready.<\/p>\n

A 2008 Heath and Retirement Survey concluded that most Americans \u201clack even a rudimentary understanding of stock and bond prices, risk diversification, portfolio choice and investment fees.\u201d The most common response to most questions in the survey was, \u201cDo not know.\u201d<\/p>\n

Ignorance Gets Really Expensive, Really Fast<\/strong><\/h2>\n

It\u2019s a shame that even good students graduate from high school today without understanding compound interest, variable-rate mortgages, Roth IRAs, what a bond is or why we have a stock market. Teachers will argue that students suffer from historical or scientific illiteracy, too. But being unable to find Spain on a map or not knowing who Michelangelo was are not going to cost you tens of thousands of dollars over your lifetime.<\/p>\n

When it comes to money basics, ignorance gets really expensive, really fast. Yet here are just a few highlights from the new SEC report.<\/p>\n

When asked the primary benefit of portfolio diversification, respondents were given three choices: a) risk reduction, b) increased returns, or c) reduced tax liabilities. Only 56% knew the answer was A. Then again, even if they had no idea whatsoever, respondents had a 33% chance of getting it right. The reality is that most participants didn\u2019t even know this most basic piece of financial wisdom.<\/p>\n

A Crying Shame\u2026<\/strong><\/h2>\n

When asked whether a young investor willing to take moderate risk for above-average growth should invest in a) Treasury bills, b) Money market funds, or c) Balanced stock funds, 63% of respondents chose the wrong answer \u2013 and even 49% of fund owners didn\u2019t know the correct answer was C.<\/p>\n

When asked whether a traditional IRA, a 401(k), or a Roth IRA offered withdrawals that are tax-exempt, only 44% knew the correct answer was a Roth.<\/p>\n

This is a crying shame, especially in a country like ours where citizens are given the freedom and opportunity to pursue financial independence. Instead, too many learn the hard way, falling for the siren song of an expensive insurance agent or transaction-based broker \u2026 or committing hari-kari in a discount brokerage account.<\/p>\n

What is the solution? Teaching basic financial literacy in every public high school in the country would be a good first step. But education reform is slow and difficult, not least of all because less than 20% of teachers polled said they felt competent to teach saving and investing.<\/p>\n

Fortunately, Investment U<\/em> exists to fill this gap. We cover everything here from the most basic principles to the most advanced strategies \u2013 and tie them into what\u2019s happening in today\u2019s stock, bond, currency and commodity markets.<\/p>\n

So stick with us. We\u2019re committed to sharing the secrets of investment success. And \u2013 since this service is free \u2013 the cost is only five minutes of your attention each day.<\/p>\n

That\u2019s a pretty modest trade-off for something that can mean the difference between being comfortable and secure \u2026 or being a burden to your family or a dependent of the state.<\/p>\n

Good Investing,<\/p>\n

Alex<\/p>\n

P.S. <\/strong>At Investment U<\/em>, we aim to offer a wealth of investment wisdom for free. But we also offer premium services to our readers. (How could we afford a free eletter if we didn\u2019t?)<\/p>\n

For instance, our Investment U Plus<\/em><\/a> service offers the same newsletter you get now, PLUS specific stock recommendations from myself and our other experts along with each daily issue \u2013 for just $5. And today, I\u2019ve clued our Plus<\/em> readers into an excellent REIT paying a healthy yield. Better yet, its CEO has been buying up MILLIONS of dollars in shares, despite the stock hitting new highs. This is the just the kind of insider buying we look for\u2026<\/p>\n

If you\u2019re interested in gaining this type of exclusive intelligence with each issue for a minimal cost, click here to learn more<\/a>.<\/p>\n

\n<\/a> <\/a> <\/a> <\/a> <\/a>\n<\/div>\n

<\/p>\n

Article by Investment U<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by Investment U Last week, the SEC released a wide-ranging report on financial literacy in the U.S. And the conclusion is clear: We\u2019re not there yet. Not even close. Yet the consequences have never been greater. Corporate pension plans have gone the way of the Passenger Pigeon. And without serious reform, Social Security \u2013 … <\/p>\n

Continue reading “How to Get Rich\u2026 and Not Get Taken”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-32187","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/32187","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=32187"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/32187\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=32187"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=32187"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=32187"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}