Crisis may raise financial literacy for many

[dkf]

LOS ANGELES — The current economic crisis is providing a teaching moment about the perils of financial ignorance for parents and their children alike.

Millions of Americans are learning the hard way about the pitfalls of teaser mortgage interest rates and runaway credit card debt. Sadly, their kids might be doomed to repeat the mistakes.

Financial instruction at home and in the nation's schools is skeletal at best, educators say. American youngsters who can Twitter, text and blog with ease are clueless when it comes to balancing a checkbook or understanding retirement savings.
....

At an exhibition hall near Glendale recently, dozens of 11th- and 12th-grade students participated in a financial literacy program sponsored by the nonprofit educational group Junior Achievement. The hands-on event was an attempt to thrust teenagers into the grown-up world of budgeting and bill-paying. The students were assigned adult identities, with children and incomes, then required to navigate a host of financial obstacles, such as getting a mortgage and paying for medical insurance.

Steffy Sulub, 17, morphed into a 33-year-old married woman trying to make ends meet on $42,516 a year. Budgeting for a house and car, while still eating three times a day, is hard work, she discovered...
....
"Finance companies are better off with customers being financially illiterate," Levin said. "And financial literacy organizations have to scratch and claw for every penny — it's like going into battle with a weapon but no ammunition."

http://www.honoluluadvertiser.com/article/20090315/BUSINESS05/903150343/0/BUSINESS12

[pinto]

1. It's an eye opener for me.

That's for sure.

[dkf]

2. Oh boy did I learn a lot.

Did I understand how crooked mortgage brokers gave people who qualified for prime loans sub-prime ones instead? Nope not a clue.

I had heard of Glass Steagall years ago, but did I understand WHY it was such a big deal? Nope not a clue.

All these derivatives have been around for years. Did I know they existed until they started blowing up? Nope not a clue.

Thank goodness I'm so leery of debt I stayed out of this mess on a personal basis. I feel bad for people who believed that they really could do it all.

[HillbillyBob]

3. I not a financial genious either, but got burned years ago

on a balloon payment scam. We didn't stay in the place long enough to get burned on the balloon part.
It turned out the realtor/mortgage guy was a crook and was selling places with funky contracts. If you were an hour late on the day the payment was due his contract said (in ittybitty tiny print you could not read w/o a microscope) that he could repo the place. One friend was not even really late , on the day the payment was due she had to work and it was payday and this being nazibama you don't get your paycheck until the close of business Friday so you have to wait until Monday when of course you ahve to be back at work(they do their best to make it hard and long as possible before you can cash your hard earned minimum wage). Well at any rate her payment was due at 3 pm on Friday and she did not get off from work til 5, she got home at six to get her payment book and the house was gone. Her belongings were in the empty yard. It was a 3 room cottage, he had actually sold the house and the lot (he had moved the house there to begin with) to two different people for more $.
We were very careful when we bought this place , we bought cheaper than we qualified (like half under a prime or 1/4 of what we could have qualified for a subprime) we had looked at at least a couple hundred houses on line I drove out to see maybe 50 or more. I went through 5 realtors and 6 or 7 mortgage brokers all the sobs trying to put us in a funky mortgage for more money that we were willing to take on. Keeping in mind that I have NEVER EVER heard of an Adjustable Rate Mortgage go to a lower rate only higher and the Interest only mortgages just sounded like a way to end up broke and homeless..been there done that!

Our education system has been raped and gutted by the policies of the slave mentals called RPIGS for years.
It is time to put some sense back in our education system. It benefits the rpigs slave owner wanabes to have ignernt citizens who do not have a clue to Civics or Economics or how mortgages work.
It is time to absolutely deprive the selfservatives of a place in our government and society. They are traitors to the country and our citizens with their piratize every part of our infrastructure to their own benefit, but sure as hell not ours.
I knew that stuff about private enterprise being more efficient than government was a lie, the only 'efficiency' gains would be to suck profits at our expense.

[Sen. Walter Sobchak]

4. I REALLY want to believe that

Unfortunately a combination of marketing (you need it or your a loser), self-delusion (I can afford it, I will be rich before 30) and the american entitlement complex (I deserve this shit now) will always win out in the end.

[etherealtruth]

5. A year ago, had I heard the term 'paper market'

I honestly would have assumed it had something to do with the manufacture/sale of paper products. Sad but true

[Karenina]

6. Jon Stewart's expose of CNBC should help.

[dkf]

7. If anything he scared a generation away from investing.

Unfortunately, that is still the only place people in the private sector can create a decent future since hardly anybody can guarantee a pension.

I've come to the conclusion that only the Government can upkeep pensions. The legacy costs of old time companies make benefits unsustainable.

Stashing funds in a bank account won't get you to retirement.

[Karenina]

8. Investing in what?