It’s Sunday, which means...It’s recap time! 

The theme for this week was: Could you pass this financial literacy quiz? I quizzed you on the FINRA Investor Education Foundation. National Financial Capability Study, a 5 question financial literacy quiz with topics ranging from basic principles on interest, diversification, how debt works, and basic bond concepts. 

Sunday is usually a day dedicated to recapping the week, but instead, I’d like to direct you to take the quiz for yourself if you missed any of these episodes for the week. You can find the quiz link in the show notes for today’s episode: 

Financial literacy quiz link: https://www.usfinancialcapability.org/submit_quiz.php 

The quiz has a bonus question, so here it goes for your extra credit: Suppose you owe $1,000 on a loan and the interest rate you are charged is 20% per year compounded annually. If you didn't pay anything off, at this interest rate, how many years would it take for the amount you owe to double?

• Less than 2 years
• 2-4 years
• 5-9 years
• 10+ years

The answer? 2-4 years. The exact answer can be found by using the rule of 72, which is a quick and easy way to figure out how long it will take for your money to double. It also works in the reverse case in the question posed here. You take 72 divided by the interest rate, in this case 20% and that tells you how many years it will take for your amount owed on your debt to double. 72/20 = 3.6...which means that those high interest credit card payments are racking up like crazy and you’ll soon owe twice that much if you don’t get to work on knocking out that debt. The good news for investors is that the reverse is also true. If you make 20% annually on your investments, it will take only 3.6 years for that investment to double in value. 

Hopefully after listening to the One Minute Retirement Tip this week you have a better understanding of basic financial literacy concepts. If you scored a 3 out of 6 or higher on this week’s quiz, you’re doing better than the average American, so give yourself a little pat on the back. 

Tomorrow we’re starting a brand new theme: how to consolidate old investment accounts. I’ll walk you through how to consolidate your old 401k accounts - it’s a process that always trips people up, but we’ve done this with our clients hundreds if not thousands of times, so I’ll share with you the steps to take to consolidate your old investment accounts and simplify your financial life in the process. I’ll also talk about why it’s so essential to consolidate and simplify your financial accounts in retirement, and even how to simplify other aspects of your investment portfolio by using auto-pilot features in your 401k. 

Thank you so much for listening this week! My name is Ashley Micciche and I hope you have a blessed Sunday.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance