- Myths and misconceptions influence how individuals and businesses approach financial matters.
- The World Economic Forum spoke with three experts about what really matters when it comes to financial literacy.
- Financial education is a “not a ‘nice-to-have’,” one expert said. “It is a ‘need-to-have’.”
In an era of economic uncertainty and growing financial complexity, understanding how money works has never been more essential. Yet misconceptions about personal finance and general financial education remain commonplace.
From the belief that investing is only for the wealthy to the idea that financial education is solely about saving, these myths continue to influence how individuals and businesses approach financial well-being.
To help separate fact from fiction, the World Economic Forum spoke with three experts on financial education and inclusion about what really matters when it comes to managing money. The experts debunked some of the most persistent myths about financial literacy and explored how better education can unlock economic security for individuals and societies alike. Here’s what they had to say.
Myth 1: Financial education is just a ‘nice-to-have’ in the workplace
Financial education in the workplace is “not a ‘nice-to-have’, it is a ‘need-to-have’,” according to Ana Mahoney, CEO of Additional Wealth.
Mahoney, whose company provides personalized financial expertise, cited research that found over half of workers say financial unease is their primary source of stress, noting that such concerns negatively impact employee well-being. The consequences, Mahoney noted, are causing “billions of dollars of lost productivity across the workforce.”
“Many more individuals are reaching retirement and also living longer lives than they ever have,” she added. “There is a massive opportunity to have a positive impact for these individuals, but also to create business opportunities that can actively enable people to live stronger, better lives.”
Myth 2: Financial education is only for people with extra time and money
Financial literacy is important for people of all ages and income levels, according to Saira Malik, CEO of Nuveen, a global investment firm managing $1.4 trillion in public and private assets.
“It’s not about how much money you have, it’s about how you make your money work for you,” Malik stated.
Malik noted that saving and investing even a small amount of money at an early age can generate important sources of passive income later in life thanks to the benefits of compound interest.
“The younger you are the better in terms of building good habits so you can save and meet your retirement goals later in life,” Malik said.
Earlier this year, the World Economic Forum’s Global Retail Investor Outlook highlighted a significant rise in individual investors participating across various segments of the global financial ecosystem.
“Investors are becoming increasingly diverse across age, geography, gender and income,” the report noted. “They are demonstrating an earlier and heightened interest in capital markets, are eager to explore a broader range of asset classes, and strongly value tech-enabled wealth management journeys.”
Myth 3: Financial institutions are too risky
Around the world, many people are wary of predatory financial institutions and reluctant to invest in volatile markets. Smart investing, however, can be an important way to create financial stability, says Oluwatosin Olaseinde, founder and CEO of Money Africa, a financial education platform.
“Thre are safe and fantastic products that one could actually keep with financial institutions and actually build wealth in the long run,” Olaseinde said, adding that financial “education plays a critical role.”
Olaseinde highlighted that the path to financial confidence and savvy investing is an ongoing pursuit, fuelled by curiosity and continuous learning. “It’s like going to the gym; you do not get better overnight,” she said. “You’re carrying those weights and gradually you’re adding more weights. That’s just how financial literacy is.”
The Forum’s Global Retail Investor Outlook also noted that new platforms are expanding access to investment products and financial education, empowering individuals to choose from a range of investing strategies and instruments at various price points.
Boosting financial literacy
Last month, the World Economic Forum’s Global Future Council on Financial Education launched a Resource Hub, a digital platform showcasing financial literacy programmes, best practice and research from around the world.
The resource hub aims to help individuals, businesses, academics and policymakers improve the accessibility and quality of financial education globally. Its featured programmes range from money management classes for teenagers in Peru to financial literacy research on the impacts of ageing populations from the Asian Development Bank.
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