Financial literacy is the ability to use knowledge and skills to make effective and informed money management decisions. Gaining the knowledge and developing the skills to become financially literate is a lifelong process that begins with something as simple as putting a few pennies in a piggy bank, and evolves to more advanced subjects such as risk and asset allocation.
Stock market investors seem to have a brighter future due to the presence and immense growth of financial literacy education among the youth. Most of them have wider experience and knowledge of market stock shares, derivatives, and bonds (National Conference of State Legislatures 2005). This provides them with adequate knowledge on how to save early enough to become good future stock market investors. The risk of pumping money to unworthy projects due to low financial literacy level no longer exists. For example, in America the youth have formed Future Investment Clubs (FICA), which aim to provide financial aid, knowledge, and careers to all those who believe that they can become good stock market investors. The program includes 10 to 25 members and is aimed at ensuring that the youth stays in schools and starts looking for white collar jobs. They should become business owners who will create jobs. They saw that the only chance to attain this target was to invest in stock markets through purchase of shares and bonds.
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