Old White Guys

Sadly, the actual financial questions that most Americans don’t know the answers to, referred to in this article at The Atlantic and discussed in this analysis from FINRA, don’t seem to be available. However, tucked away in the report is this snippet of information:

Males, older respondents, White and Asian respondents, and those with college or higher education levels are more likely to answer the quiz questions correctly.

Several competing interpretations could be placed on that. It could be that the questions are racist, sexist, and ageist. Or, alternatively, we might consider that if we want the American people to become more “financially literate” we might want to focus our attentions on young black or Hispanic women and start teaching them earlier in life.


Courtesy of commenter Barry Drusedom the original quiz is here.

Since I’m an old white guy, I got all five answers correct. In honesty one of them is a trick question—if you gave the true answer, you’d be marked wrong but the answer they’re looking for is pretty obvious.

9 comments… add one
  • PD Shaw

    I found one question described:

    “For example, a question on inflation instructed respondents to assume the annual interest on a savings account was 1% and that inflation was 2% per year. Respondents were then asked whether, after one year, they would be able to buy more than today, exactly the same or less. Fewer than half of respondents 34 and younger were able to answer this question correctly, compared to nearly two-thirds of those 35-54, and over three quarters of those 55+.”

    What if the Respondent is confident that they will be able to buy more technology in a year, i.e. the computer with specs I want to buy today costs $500, but will probably cost $450 next year?

  • PD Shaw

    I did find one of the links interesting that indicated that a lot of states do not require a financial literacy class to graduate from high school. I think there was a nationwide push in the late 70s/early 80s to make that a requirement. And the state breakdowns do not follow any expected pattern:


  • Ben Wolf


    It looks like the participants were instructed to assume that anything they might buy was subject to an annual price increase of 2%. That they answered incorrectly indicates to me they don’t understand either interest or inflation. At the very least they don’t know the definitions of those terms, which doesn’t surprise me considering the quantity of bad information splooged in their faces by the various media.

  • michael reynolds

    The old, educated ruling classes knew more about finances than younger members of marginalized populations? Color me shocked.

  • Guarneri

    “The old, educated ruling classes knew more about finances than younger members of marginalized populations?”

    As President Obama’s dismal performance reminds us every day.

  • steve

    The old, educated ruling classes organized and managed the subprime mortgage crisis. I would suggest we put one more question on the test. If you give a loan to someone without asking if they have any income so they can afford to pay it back, what are the chances the loan fails. We already know the answer given by the old folks. Wonder if the kids would do better? (Also, to be fair, we should ask a few questions that favor the kids. Like, how do you get your smartphone to work to pay bills on it?)


  • Barry Drusedum

    The quiz can be found at the USFinancialCapability.org (http://www.usfinancialcapability.org/quiz.php). The quiz is only five questions. Must be a old white guy, got them all right.

  • PD Shaw

    Thanks Barry.

    I knew them all, but got one wrong because I misread the question. Please believe me I know that total interest payments on a 30 year mortgage will more than a 15 year mortgage over their respective lives. Please believe me because I have a mortgage, and I’m old and white.

    (The bond question is stupid)

  • PD Shaw

    Its more obvious in retrospect that the focus here is on investments, which I don’t think is the most essential area of knowledge in personal finance.

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