Forbes: 7 Questions To Test Your Financial Literacy
Great, short, informative article. I can’t tell you how many times I run into #3 and have to explain the difference between a container and what one puts into a container. And, given where I live and work, how many people have *way* too much tied up in company stock (#5), and often it’s in the form of highly leveraged positions (ie. options) which multiply the volatility and risk.
Read the article, but in summary here:
1) Does carrying a balance on a credit card help your credit (rating)?
2) Should you pay down your largest debts first?
3) Is an IRA a good investment?
4) Should you invest in top-performing mutual funds?
5) Is your company stock a safe investment?
6) Will Social Security be there when you retire?
7) Does a will protect your estate from probate?
The article answers all of these questions well. I’d add a few more details such as how Social Security computes initial benefits (based on wage growth, not inflation), and especially for #7, it’s not just the will, but when folks have done some estate planning, there may be trusts involved and perhaps a question #8 should be added: Does a trust protect my estate from estate taxes?