A recent study by forex broker experts at BrokerChooser has revealed that 55% of Singaporeans consider themselves financially illiterate, with 52% unaware of their monthly expenditure. This knowledge gap is costing households between $1,997 and $5,410 each year. The study highlights that individuals with low financial literacy fare worse financially than those with higher literacy, even at similar income levels.
BrokerChooser analysed search data to identify the financial terms that confuse Singaporeans the most. ‘Equity’ tops the list, with 2,170 monthly searches in Singapore and 247,100 globally. Adam Nasli, Head Analyst at BrokerChooser, explained, “Equity is often misunderstood due to its broad usage. It represents the value an owner retains after settling debts. In the stock market, it refers to shares in a company, offering partial ownership and profit sharing.”
‘ETF (Exchange Traded Fund)’ ranks second, with 1,800 monthly searches in Singapore. An ETF is a fund traded on a stock exchange, allowing investors to diversify their portfolios with low fees and tax efficiency. ‘GDP (Gross Domestic Product)’ is the third most confusing term, with 1,500 searches. It measures the total market value of goods and services produced within a country.
Nasli emphasised the importance of financial literacy, stating, “With AI enabling sophisticated scams, understanding financial terms is crucial to managing money wisely and avoiding costly mistakes.” The study underscores the need for improved financial education to help individuals make informed decisions and build sustainable wealth.
“`
