"Many People Have Inadequate Understanding of Basic Financial Concepts." Seven Questions to Antonia Grohmann
July 29, 2015
Ms. Grohmann, some people make considerably poorer financial decisions than others. Where exactly do these people experience difficulties?
Many individuals make poor financial decisions, particularly when it comes to saving for retirement. They don’t start planning early enough and consequently don’t save enough to provide them with financial security in old age. They underestimate how much money they’ll need when they retire and how long they’ll live and so fail to put sufficient funds aside. Another problem for some people is that they run up too much debt. In terms of financial investments, we see the main type of asset most people invest in is an owner-occupied property or they own stocks in them company they work for, whereas a more diversified portfolio would be more sensible.
The interview with Antonia Grohmann is published in DIW Economic Bulletin 30/2015. It is available for free download(PDF, 179.65 KB).