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I'm not sure what financial education would do here. The people in the article, some of whom were medical doctors, surely knew how percentages work, how probabi

I'm not sure what financial education would do here. The people in the article, some of whom were medical doctors, surely knew how percentages work, how probabilities work. What else exactly did they need to be taught, in school, university, and medical school? I'd say they needed more (at least some) common sense.

lis 12y ago
Sometimes common sense has to be taught. Of course they do know how percentages, probabilities and so on work. But they fail to do so when it comes to money. I actually doubt that this is (in most cases) due to greed. Many people just don't have a feeling for the relation between risk and promised reward.
- justincormack 12y ago
  Not sure, I think it is greed related. People assume that money creates more money just like that. One person in the article didn't trust banks post crisis. I guess people do assume that the financial services business makes vast amounts of money out of money, rather than largely just taking proportions of said money away.
fasteo 12y ago
surely knew how percentages work Not even close. A 1% daily return is science-fiction.
- cesarb 12y ago
  > Not even close. A 1% daily return is science-fiction. Not really. In 1990, the most common kind of "savings account" used here (caderneta de poupança) had one month with over 80% returns. That's a bit more than 1% daily return, for an investment almost everyone could (and did) have. Of course, that year the inflation was over 1000%/year...
  - jacquesm 12y ago
    For every rule there is an exception. Grandparent could be restated as a 'return that is more than a certain percentage over inflation' and it would hold water against your exception. Cue the next exception and so on. The point is that such high returns are a huge red flags and absent any explanation for them you should be extremely wary and probably just assume that it is a scam until you've proven otherwise.
brisance 12y ago
Actually, a lot of medical doctors and "professionals" do not really know how probabilities work. For more on this, refer to Gerd Gigerenzer's Risk Savvy: How to Make Good Decisions. http://www.barnesandnoble.com/w/risk-savvy-gerd-gigerenzer/1115811818?ean=9780670025657 http://www.barnesandnoble.com/w/risk-savvy-gerd-gigerenzer/1...
- DanBC 12y ago
  His "reckoning with risk" is an excellent book. As an example: http://imgur.com/zO4zkl4 http://imgur.com/zO4zkl4 Edit: and a review http://plus.maths.org/content/reckoning-risk http://plus.maths.org/content/reckoning-risk
oldspiceman 12y ago
Doctors are known for being terrible with money. There are a bunch of investment services especially catered to doctors to help them invest their money. Of course, these are generally rip offs compared to paying $100 a year for a fee based investment plan. But they are better than nothing.

lis 12y ago

Sometimes common sense has to be taught. Of course they do know how percentages, probabilities and so on work. But they fail to do so when it comes to money. I actually doubt that this is (in most cases) due to greed. Many people just don't have a feeling for the relation between risk and promised reward.

justincormack 12y ago
Not sure, I think it is greed related. People assume that money creates more money just like that. One person in the article didn't trust banks post crisis. I guess people do assume that the financial services business makes vast amounts of money out of money, rather than largely just taking proportions of said money away.

fasteo 12y ago

surely knew how percentages work Not even close. A 1% daily return is science-fiction.

cesarb 12y ago
> Not even close. A 1% daily return is science-fiction. Not really. In 1990, the most common kind of "savings account" used here (caderneta de poupança) had one month with over 80% returns. That's a bit more than 1% daily return, for an investment almost everyone could (and did) have. Of course, that year the inflation was over 1000%/year...
- jacquesm 12y ago
  For every rule there is an exception. Grandparent could be restated as a 'return that is more than a certain percentage over inflation' and it would hold water against your exception. Cue the next exception and so on. The point is that such high returns are a huge red flags and absent any explanation for them you should be extremely wary and probably just assume that it is a scam until you've proven otherwise.

brisance 12y ago

Actually, a lot of medical doctors and "professionals" do not really know how probabilities work. For more on this, refer to Gerd Gigerenzer's Risk Savvy: How to Make Good Decisions. http://www.barnesandnoble.com/w/risk-savvy-gerd-gigerenzer/1115811818?ean=9780670025657 http://www.barnesandnoble.com/w/risk-savvy-gerd-gigerenzer/1...

DanBC 12y ago
His "reckoning with risk" is an excellent book. As an example: http://imgur.com/zO4zkl4 http://imgur.com/zO4zkl4 Edit: and a review http://plus.maths.org/content/reckoning-risk http://plus.maths.org/content/reckoning-risk

oldspiceman 12y ago

Doctors are known for being terrible with money. There are a bunch of investment services especially catered to doctors to help them invest their money. Of course, these are generally rip offs compared to paying $100 a year for a fee based investment plan. But they are better than nothing.