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There is much going on these days in the field of financial literacy. I remember, when we first started in 2006 with this project, it was difficult to find listening ears to our story on how to set up user-friendly tools for personal finance education. And all of a sudden, guess what, financial education is the hottest topic around!
The current financial turmoil and its impact on businesses and consumers opened the eyes of many, jumping on the bandwagon and riding the wave, a good thing to be in financial literacy these days. I can't complain.
Not only is there a real need to increase the understanding of financial investments, there is also a huge need to get better information from financial institutions. When you see how financial products are being sold on the back of a big bank's brand (= if it's from this bank, it must be good), something is definitely wrong. Large brands do not mean good stuff, and the opposite is often true: small is beautiful, handicraft is a gauge of quality. We often forget this.
With the globalisation opening the playfield for mega-mergers, large brands ruled. But in banking, they lost.It is game over for large brands in banking, the new regulations won't allow them anymore. They are too dangerous, not only for the consumers, but also for the country in which the HQ is located. For example, imagine a small country with three large global banks, if a banking crisis occurs and the banks need government support, this little country won't be able toinject the necessary funds: Game over. This is what happened to Iceland by the way.
This concept is for the moment contained to the financial industry, but thinking outside of the box, why is it so that private companies are getting larger and larger? Is it for the benefits of the consumers? And of the shareholders? Bullshit, it is just to the benefit of the management! Now just think of GM and you will get my point. When you are CEO of such a huge company, you are not in touch with the reality anymore. You are used to fly on a private jet, and when it comes down to deciding which kind of cars you should design / develop / build / market in the future, one little mistake has disastrous effects.
Moreover, with design and development centers being co-located for cost efficiency, what are the employees doing in the other countries? Sales and marketing... the death of creativity, you got it. Again, small is beautiful, entrepreneurs create value, they are the source to growth, and to quality. Because they know what their customers want, because they are in field talking to their customers, because thy understand the pain to be solved.
Anyway, this brings me far away from financial literacy, but my point is: you cannot trust a large corporation selling things following an un-personal process. It is not for you, it is for the company, it is for the management. And the same management is after short-term profits. Hence, get your financial literacy up and running, make sure your Financial IQ is at the top to be able to challenge what is sold to you, because it matters.
The deep shit we are in now is partly because of the product structurers who did not know what they were selling, but also because the investors did not ask the right questions! They trusted the products blindly, and you know what trust is worth when you talk about money!
Financial education is the next big thing, and education in general. E-learning is seen as one of the next big things to invest in forthe VCs in Silicon Valley, my bet is in financial education. Because there is a huge gap between what Main Street knows and what Wall Street knows, and that gap must be filled in order to restore trust, investments, lending, and ensuing growth.
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tycho