Interview concepts and applications

The Interview

Recently, I came across a rather fascinating and intriguing article indicating that most young adults are not financially literate. More specifically, the article indicated that young adults, i.e. those in the 18 – 26 age bracket lack the knowledge and capabilities to make sound financial decisions, i.e. in relation to budgeting, saving for retirement, investing, etc. I was interested in finding out whether this is indeed the case, and if there is anything that can be done to salvage the situation. Towards this end, and following an introduction from a close acquaintance, I sought the insight and opinion of XXXX XXXX, the Chief Investment Officer at XXXX Bank.

I established that the findings made by the authors of the article in question were indeed true to the effect that most young adults lack the skills and capabilities to effectively manage their finances. All that one needs to do to ascertain this fact is to peruse the social media profiles of most persons in the aforementioned age group. Displayed therein are varying levels of extravagance fueled by the desire to show off. To a large extent, this could be termed an indication of lack of financial management skills as the money most young adults waste on worthless pursuits could be channeled to various investment schemes so as to enhance their financial stability going forward. I was also surprised to find out that the financial habits picked up during youthful years are carried into adulthood. Although the repercussions of poor financial decisions at a younger age could be mild, consequences during adulthood could be rather significant.

One of the major reasons as to why most young adults are clueless about the effective management of personal finances as well as investing is lack of access to education programs that seek to enhance their financial literacy. For this reason, young adults lack proper understanding of some fundamental personal finance concepts such as investing, budgeting, debt management, and saving.

It would be prudent to note that although some consequences of financial illiteracy are easy to perceive, there are some other effects that are more difficult to discern. For instance, lack of financial literacy exposes young adults to a higher than normal chance of being duped in financial dealings – i.e. meaning that they are more likely to invest in flawed investments such as Ponzi schemes. There are also more likely to have a higher appetite for debt, which they are likely to mismanage following their access the same.