Americans spend more, in aggregate, than we save. In recent years, millions of us bought homes we couldn’t afford with mortgages that had interest rates that rise over time. Just a few years ago, tens of millions of us turned our 401(k)s into 201(k)s by loading up on overpriced tech stocks.
No question, greedy corporations have a lot to do with our troubles. You can’t open the mail, watch television or read a magazine without seeing another pitch for yet another credit card. Mortgage brokers deceived unwary consumers into signing up for mortgages they couldn’t possibly pay. And stock brokerages and investment bankers made billions of dollars hyping Internet companies that had little or no profits or revenues.
In addition to pointing fingers, however, it’s important for Americans to look in the mirror. No one held a gun to consumers’ heads when they made the decisions to run up their credit-card debts, or buy houses they couldn’t afford or stocks of companies that had little or no value.
Mostly, people made poor decisions because we’re a nation of financial illiterates. We lack the knowledge to make sound investment choices. “An educated borrower is less likely to get into a loan that gradually gets worse over time,” says Paul Golden, spokesman for the National Endowment for Financial Education…
Read more at http://www.kiplinger.com/article/investing/T041-C007-S001-badly-in-need-of-financial-education.html#HpMxI67hqCj25LEI.99