A millennial's take on financial lingo
Thursday, 08 November 2018
A recent accountancy survey highlighted that 60% of college and university students can’t explain terms like: ISA, bonds, shorting, hedge funds, index tracker fund and derivatives.
Other concepts that mystified most of the respondents were: equity, (unknown by 84%), and asset management, which could only be explained by 10% of those surveyed.
Naturally, this has led people to accuse the ‘millennial’ generation of spending so much time in the digital world that they have become financially illiterate. They should put their phones down and learn how the ‘real world’ works!
As a ‘millennial’ myself, and a chartered accountant, I find this approach rather odd.
In my view this survey doesn’t indicate much at all. I’d say it doesn’t matter who you ask, not many people are going to be able to give you the dictionary definition of any of those terms we’ve listed above. And even if they could, what does that prove?
So what is the real indicator of financial literacy? In my opinion, it’s knowing what debt is, how it arises, what it costs and how to avoid it. It’s also an advantage to be able to evaluate different savings and investment options and the overall benefits of only buying things when you can afford it rather than maxing out credit cards and worrying about how to pay for it later!
In this digital age, there are a number of apps that can help manage finances and, at Larking Gowen, we can help with this too. A number of our clients use cloud based infrastructures. From this we can, and do, monitor financial indicators such as their business’s bank balance, incomings and outgoings, the money owed to them by their debtors (including how long this has been outstanding) etc.
If embraced properly then digital products can be very advantageous. We are constantly using cloud based products to provide real-time advice to our clients and to help guide them towards making better financial decisions.
If you’d like to hear more about the cloud based book-keeping and accounting offerings that Larking Gowen have, and how we can help your business grow then please contact us on 0330 024 0888