The words of Sir Benjamin Franklin one of the founding fathers of the USA concluded that “Learning is the beginning of wealth and an investment in knowledge pays the best interest”.
What is financial literacy?
Financial literacy is a combination of financial knowledge, skills, attitudes and behaviours necessary to make sound financial decisions, based on personal circumstances, to improve financial well-being and to create and maintain wealth for long-term survival
Why is it important?
In today’s fast-paced consumer society, financial literacy is an essential everyday life skill. It means being able to understand and negotiate the financial landscape, manage money and financial risks effectively and avoid financial pitfalls. Therefore improving financial literacy can benefit anyone, regardless of age, income or background. It helps people make informed choices, day-to-day and throughout their lives.
Financial literacy is also important for the following reasons:
- The financial landscape seems to be changing faster than persons can keep pace. The consumer is bombarded every day with financial information such as the bull markets, bear markets, rising interest rates, falling interest rates, and the increased number of finance-related articles with conflicting views in the press can make creating and following a financial path difficult. This means that persons have to empower themselves to make wise financial decisions.
- People are living longer. This means that we must accumulate more funds before retirement to cover living expenses over a longer time. Otherwise, we could become a burden for our families, society, and the government coffers.
- There are more choices of financial services companies, products and services. Banks, credit unions, brokerage firms, insurance firms, credit card companies, mortgage companies, financial planners, among others and we have to know when, how and for what purpose we do business with each organization.
- More and more, the burden of making sound financial decisions is coming to rest on the shoulders of the consumers. Many companies today have shifted their retirement plans from traditional pension plans to those requiring employees to participate. This means that employees have to be more aware of what is being offered, that at the end of their work life they are able to retire well.
This is why every year the JSE sets aside a week to continue driving the theme of financial knowledge so that individuals will be able to make wiser financial decisions. The focus of the discussions will also be on individuals obtaining a broader understanding of the role and responsibilities of regulatory bodies, companies and investors in ensuring that the financial sector delivers on its objective of wealth creation.
The objectives of the week of activities are to:
a) Provide information on the financial markets.
b) Highlight the products available in the financial industry and to bring into focus the importance of the Equities Market.
c) Educate the investing public about the benefits of listing on the market, investing in equities and the regulatory framework that is in place to protect their investments.
d) Increase the number of equity investors in the market
e) Reconnect with existing investors and business associates
