This is, as you undoubtedly know, Financial Literacy Month. (It is also, apparently, National Anxiety Month and International Guitar Month.) So to celebrate, I have prepared the following personal finance literacy quiz. And who doesn’t like quizzes?
I expect this to be relatively hard for most folks, although every question involves issues that an ordinary person might encounter in their financial lives.
I’m a little uncertain about the technology here, so if there are bugs, I apologize. Also, I assume that it will not work with RSS readers. Sorry.
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As would be expected from any serious economic downturn, Americans’ emotional reaction to the Great Recession is mostly a predictable collection of negative feelings: sorrow, fear, despair, regret, and so on. But there is another emotion in the mix that took me a little while to understand. It is anger. To be more specific, it is anger about losses in stocks and other financial assets.
It took a while for me to pick up on this partially because it is so alien to the
way I think about my investments. Not to go too far into unpleasant details, but I have lost a lot of money in the stock market in the past year. Really a lot. I am sad about this. I am regretful that I didn’t bail out when I could have. I even feel foolish about a few particular investments I chose. But I am not angry at anybody about it. Why would I be?
I knew what I was getting myself into. As readers of this blog know, my attitude to the stock market can be characterized as long term optimism tempered with a healthy dose of life-isn’t-always-fair. I knew that the market going down by half was not likely, but always a possibility. It had happened before. And I knew that although being a long-term investor increased my chances of a happy ending, nothing guaranteed one.
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Two weeks ago Trent at The Simple Dollar had a post in which he quoted at length from a pretty hostile email attacking him for not having any particular qualification to give personal finance advice. Of course, to a blogger like Trent that’s a slow hanging curve, and he proceeded to yank it into the bleachers in post that got 225 mostly supportive comments.
His defense of his right to give advice was not “Hey, maybe I don’t have a lot 
of credentials, but I know what I’m talking about” nor “Look, I’ve been doing this for three years and more than 100,000 people read this blog every day, so my advice must be pretty good.” Instead, Trent essentially said what most bloggers say, that he is not a guru but an ordinary guy doing his best. “All I can do is share my experiences and what I’ve learned along the way.”
Similarly, in the Get Rich Slowly post that discussed this blog (and led many of you to discover it) my current hero j.d. wrote that he had been thinking of updating his disclaimer and had settled on borrowing the text from The Digerati Life:
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As any reader of this blog knows, I enjoy nothing more than tweaking the nose of personal finance conventional wisdom. Well, joy of joys, yesterday’s New York Times had an article, in the science section no less, that spits in 
conventional wisdom’s face, knees it in the groin and then kicks it as it rolls on the ground.
The piece discussed the work of Ran Kivetz and Anat Keinan, two professors of marketing from Columbia and Harvard Business Schools respectively. (Marketing professor is, incidentally, the same line of work as the authors of The Millionaire Next Door.) They have discovered a new malady to avoid: saver’s remorse. It’s just what it sounds like: that sad feeling you get with money in your pocket that you could have spent in some enjoyable way but, in a moment of weakness, chose to save.
This is just so awesome.
The sober professors don’t call it saver’s remorse. I think John Tierney, The Times’ science guy, came up with that. They use the term hyperopia, literally excessive farsightedness. Sufferers of hyperopia “deprive themselves of indulgence and instead overly focus on acquiring and consuming utilitarian necessities, acting responsibly, and doing ‘the right thing.’” (K&K 2006 p.274)
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Musings, The Big Picture | Frank Curmudgeon | 
April 17, 2009 12:00 pm | 
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