Gaining financial literacy is critical if you want to thrive in today’s society. And yet, only about a third of the global population can be described as being financially literate. Joining us today to unpack the concept of financial literacy and its impact is Dr. Annamaria Lusardi, Professor of Economics and Accountancy at George Washington University. Dr. Lusardi has taught Economics for over 20 years, and her passion for financial literacy is reflected in everything she does. Her career has been instrumental in furthering the cause of increased global financial literacy, from being the Founder and Academic Director of the Global Financial Literacy Excellence Center, to serving as the co-chair of the G53 Financial Literacy and Personal Finance Research Network. In our conversation, Dr. Lusardi breaks down the definition of financial literacy, how it’s measured by leading experts across the world, along with some of the key differences we see between people in richer and poorer countries. She explains why financial advice isn’t a replacement for financial literacy and provides guidance on what we should be doing to educate various population groups. We also discuss how global trends have created an increased need for financial literacy as an essential skill, especially for young people, and why greater global financial literacy is beneficial to everyone, including governments and wealthier individuals. Tune in as we delve into the many facets of financial literacy and the important role it plays in our collective health, happiness, and success! Timestamps: 0:00 Intro 5:11 Definition & Importance of Financial Literacy 8:51 How to measure Financial Literacy 17:09 The areas of financial literacy that people struggle with most 23:08 The costs and benefits of gaining financial literacy & who should invest in financial literacy 34:52 How does financial literacy affect stock market participation and wealth accumulation? 39:06 Common mistakes that those with low levels of financial literacy tend to make. 46:13 The impact that financial advice and financial advisors have on economic outcomes. 51:06 The variation of financial literacy across demographic groups 58:05 How to increase financial literacy 1:13:30 Dr. Annamaria Lusardi’s definition of success Participate in our Community Discussion about this Episode: https://community.rationalreminder.ca/t/episode-232-dr-annamaria-lusardi-the-economic-importance-of-financial-literacy-discussion-thread/20831 Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on Twitter — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on Twitter — https://twitter.com/benjaminwfelix Cameron on Twitter — https://twitter.com/CameronPassmore Dr. Annamaria Lusardi on Twitter — https://twitter.com/Dr_AnnaLusardi Dr. Annamaria Lusardi — https://www.annamarialusardi.com/ 'Financial literacy and financial resilience: Evidence from around the world' — https://onlinelibrary.wiley.com/doi/abs/10.1111/fima.12283 'The Economic Importance of Financial Literacy: Theory and Evidence' — https://gflec.org/wp-content/uploads/2014/12/economic-importance-financial-literacy-theory-evidence.pdf 'Optimal Financial Knowledge and Wealth Inequality' — https://www.journals.uchicago.edu/doi/10.1086/690950 'Financial literacy and stock market participation' — https://www.sciencedirect.com/science/article/abs/pii/S0304405X11000717 'Employee Financial Literacy and Retirement Plan Behavior: A Case Study' — https://onlinelibrary.wiley.com/doi/abs/10.1111/ecin.12389 'Skating on thin ice: New evidence on financial fragility' — https://www.dnb.nl/media/uxldldkl/working-paper-no-670_tcm47.pdf 'Stereotypes in financial literacy: Evidence from PISA' — https://www.sciencedirect.com/science/article/abs/pii/S0929119920302753?via%3Dihub 'Fearless Woman: Financial Literacy and Stock Market Participation' — https://gflec.org/wp-content/uploads/2021/03/Fearless-Woman-Research-Final.pdf?x53868 'How Financially Literate Are Women? An Overview and New Insights' — https://onlinelibrary.wiley.com/doi/abs/10.1111/joca.12121 'Factors Contributing to Financial Well-Being among Black and Hispanic Women' — https://jor.pm-research.com/content/9/1/71 'Financial Education Affects Financial Knowledge and Downstream Behaviors' — https://gflec.org/wp-content/uploads/2020/04/Working-Paper-Financial-education-affects-financial-knowledge-and-downstream-behaviors-April_2020.pdf