Recent survey reveals big gaps in people’s knowledge
How much do people in Ontario know about money and investing? That was the big question the Investor Education Fund tackled recently. In October 2010, we conducted a survey of 1,000 people across the province. They represented our population in terms of age, sex, income and other factors. The survey included more than 20 questions about investing, borrowing and financial planning.
Here's how our participants did - and what we learned.
What people know
- Most people know the basic sign of a potential fraud.
- There is good awareness of the basic tax rules that apply to RRSPs.
- Knowledge of investment risks and returns is medium overall. It tends to be lower when it involves long-term planning.
What people don't know
- People's knowledge of financial planning and setting goals is quite low.
- Even when people understand a financial or economic principle in theory, applying the principle to a real situation is difficult for them.
Pass or fail?
Overall, people answered about half of the survey questions correctly. The average score was 50 per cent. If we consider 60 per cent correct as a "passing grade," then only 3 out of 10 Ontarians would have passed.
Who knew the most?
- People with more education and higher incomes answered more questions correctly.
- Men did slightly better overall than women.
- Married people performed better than singles.
- People between the ages of 35 and 49 outperformed any other age group.
- Internet users scored higher than non-users.
The study also found that people who are investing and saving for retirement tended to know a lot more than people who were not. Non-investors were far less aware of the tax benefits of an RRSP. They also knew little or nothing about stocks. This echoes the results of other studies that show people tend to get informed when they are personally involved and need to make decisions.
Two variables were not related to investor knowledge: region and mother tongue. Those who speak English as a second language performed just as well as native English speakers. With Ontario divided into seven regions, it is clear that no region does significantly better or worse than any other overall or for knowledge of investments.
| Guess who scored highest? People who used www.getsmarteraboutmoney.ca during the past six months scored more than 25 per cent higher overall than others. Our website users also scored higher than others on every investment-related question. |
What does the survey tell us?
People in Ontario have important gaps in their knowledge of investing. Based on the survey results, here is a list of topics where many of us could use a little help. Use these resources to boost your knowledge:
View more results from our financial literacy survey now