"Baby Boomers have lived in a world where almost any financial decision was rewarded"

A correspondent sent in an excellent comment found in a blog comments section:

"While it doesn’t make for a very pleasant society to have a large and growing wealth divide, the VAST majority of people simply couldn’t care less about having any financial competence. This study [pdf] shows that 70% of the US population cannot answer three extremely basic questions about finance.

This correlates almost perfectly to the number of people who are losing wealth. The questions should be incredibly easy to answer for any functional adult. Here is one:

'Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After 5 years, how much do you think you would have in the account if you left the money to grow: [more than $102; exactly $102; less than $102; do not know; refuse to answer.]'

If you are unable to answer that you fit into the 'fool and his money' portion of society. I have personally found the complete lack of interest in finance to be a strong feature of society. More and more I am beginning to wonder why my knowledge of the field is expected to count for nothing and why the fact that my wealth routinely grows during good and bad times is seen as some type of pathology. If I train two hours a day on the golf course why would you expect to beat me as a once a year player?

Baby Boomers have lived in a world where almost any financial decision was rewarded. They are clueless that things have changed. When they were young adults 10% cap rates on real estate were routine. Now they are typically negative in many markets! They have seen wild asset price appreciation on a multi decade timeline on EVERY asset class. There simply was nothing they could buy that didn’t increase in value. Those days are over – almost certainly for many decades. Having some interest in the basics of money going forward is essential if you don’t want to go backwards. Being lazy and winning financially has worked since 1980 but is very dead."