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Observer article 29.03.09 Money/Question of the Week

Both Ms Willis and Ms van en Hende miss the point; you don't need to be an automotive engineer to drive a car, or a musician to enjoy the LSO, or Courtney Pine.
Clearly more knowledge, skill and experience increases competence. *How* to increase personal financial competence in the general population, such that any advice offered, can be evaluated, is the key question,
The banks and pension funds have so trashed their own reputations, that public trust in their advice has been destroyed. I agree people do discount future risk at the same time as overvaluing immediate benefits. Even so, keeping up with the market place is almost impossible, even if you have the time, or the numerical ability.
Contrary to what you might think, we have a vested interest in better public financial knowledge; all the better to value our service.
After years of working in this domain, we think that a simple approach to business enterprise would be most effective. Should our young folk know, use and differentiate between; cash-flow, income/expenditure and assets/liabilities, they would be well on the way to making safe, effective and efficient personal decisions. It may also produce increased wealth and economic activity along the way.
Test your own knowledge of cash-flow: Does 'depreciation' appear in the inflows or outflows, of a cash flow statement?
Jim Marley
Director
dothesums.co.uk
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