ON THE NECESSITY OF FINANCIAL LITERACY

I HAVE WRITTEN A LOT ON THE NECESSITY OF FINANCIAL LITERACY AND THE NECESSITY TO LIMIT THE LOSSES O INVESTMENTS. THIS AFFECTS HUNDREDS, IF NOT THOUSANDS OF PEOPLE IN GHANA.  AND IT’S NOT ONLY GHANA WHERE THESE PROBLEMS OCCUR. FURTHERMORE, IT’S NOT ONLY A PHENOMENON OF DEVELOPING  COUNTRIES, ALTHOUGH IT MIGHT  HAPPEN THERE MORE OFTEN. BUT THAT MIGHT HAVE MORE TO DO WITH THE  DIFFERENCES IN THE OVERALL LITERACY THAN WITH FINANCIAL LITERACY IN PARTICULAR.

WHEN FINANCIAL LITERACY IMPROVES, IT WILL BE MORE DIFFICULT TO LURE SAVERS AND INVESTORS INTO DUBIOUS FINANCIAL PRODUCTS. THIS IS VERY OBVIOUS IN THE SO-CALLED “MENZGOLD SAGA”, BUT NOT LIMITED TO IT. HERE, THE QUESTION WHETHER MENZGOLD WAS REGISTERED AND WHERE PLAYS A MORE OR LESS SECONDARY ROLE. THIS IS A QUESTION FOR THE REGULATOR(S). THE PRIMARY CONCERN FOR INVESTOR SHOULD BE TO DIFFERENTIATE BETWEEN HONEST AND DISHONEST INVESTMENT OFFERS.

I OFTEN REFER TO THE OLD SAYING “IF IT SEEMS TO BE TOO GOOD, IT PROBABLY IS TOO GOOD TO BE TRUE”. IF SOMEBODY OFFERS YOU AN INTEREST RATE OF AROUND 40% PER YEAR, IT IS SURELY NOT SUSTAINABLE. SOONER OR LATER, THIS OFFER WILL COLLAPSE. CONSEQUENTLY, TRY TO AVOID SUCH SEEMINGLY “ATTRACTIVE OPPORTUNITIES”.

YOU SHOULD PREFER TO INVEST ANY SURPLUS AMOUNT IN YOUR LOCAL RURAL OR COMMUNITY BANK. THESE ONES OFFER A REALISTIC INTEREST RATE WHICH IS NORMALLY EVEN OVER THE INFLATION RATE. FURTHERMORE, YOU EVEN CONTRIBUTE TO THE DEVELOPMENT OF YOUR DISTRICT. THIS IS BECAUSE  THE BANKS USE YOUR INVESTED MONEY TO DISTRIBUTE LOANS FOR MICRO AND SMALL BUSINESSES. APART FROM THAT, RURAL AND COMMUNITY BANKS USUALLY USE PART OF THEIR PROFIT TO SUPPORT LOCAL INSTITUTIONS.THEY DO THAT IN PURSUING THEIR CORPORATE SOCIAL RESPONSIBILITY.

RECKLING ENTERPRISES THROUGH GHANA RESEARCH WANTS TO CONTRIBUTE ITS PART TO IMPROVE FINANCIAL LITERACY IN THE COUNTRY.

  • FROM BEGINNING OF NEXT YEAR ON, THERE WILL BE BASIC COURSES IN FINANCE AMD INVESTMENT ON ghanaresearch.org  .(THESE COURSES WILL BE COMPLETELY FREE OF CHARGE.)
  • BY END OF NEXT WEEK, I WILL PUBLISH A QUESTIONNAIRE ON THE WEBSITE AND ON SOCIAL MEDIA. IN THIS QUESTIONNAIRE, IN THIS QUESTIONNAIRE, YOU CAN ANSWER SOME SIMPLE QUESTIONS. ACCORDING TO THESE ANSWERS, I WILL TELL YOU WHICH TYPE OF INVESTOR YOU ARE. FROM THAT YOU WILL BE ABLE TO DERIVE HOW TO INVEST YOUR MONEY BEST.

 

I HOPE YOU WILL PARTICIPATE!

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