Life After Full-time Work Blog

Learn about preparing for life after full-time work through posts from Don's upcoming book.

# 137 Financial Literacy: I Interviewed Prof. Annamaria Lusardi

What it is and why it’s so important to include it as a fundamental part of our education. And a test you can take  


Literacy is the ability to read and write; financial literacy is having the knowledge and skills to make sensible financial decisions, such as budgeting and spending, and saving and investing, and borrowing. Both forms of literacy require education. Literacy skills are automatically included in the school curriculum; financial literacy skills are not.

The result is that, though rates vary across the world, overall 84% of the world’s adults can read, but only 33% are financially literate. Most adults lack an understanding of basic financial concepts.

It’s tough to imagine a world without education. We accept that education is a direct cause of improved health, improved productivity, higher income, greater self-confidence, etc etc etc. Education used to be a blessing. Now it’s a necessity. So it’s distressing that practical aspects that contribute to financial literacy aren’t automatically included.

What does education do for us? Two kinds of things.

First, and very directly, it helps us understand things around us – people, the way the world works, a framework for thinking about things. That’s a wonderful preparation for life.

Second, and indirectly, it teaches us to think. We get learning techniques. So when we encounter new situations and new problems, we’re not totally lost. That framework helps us cope.

If only we could all cope with basic, everyday financial problems!


In June I had the pleasure of interviewing one of the world’s foremost financial literacy experts, Dr Annamaria Lusardi. (To me, she is the foremost expert! She is one of my heroes.) Among her distinctions is that she is the University Professor of Economics and Accountancy at The George Washington University, a very eminent position, as well as the Academic Director of the Global Financial Literacy Excellence Center. Her doctorate is from Princeton, and (in a long list of similar activities) she chaired the financial literacy experts PISA committee, PISA being the global test of the ability of 15-year-olds. Not only is she frequently quoted by newspapers and on TV, she has also written books and papers that have been cited literally thousands of times. Personally I think of Anna as a charming and friendly human being, and it was such a pleasure to chat with her again.

I conducted the interview for the Pensions & Investments (P&I) World Pension Summit, of which I have been an Advisory Board member for many years.

Here’s a link to our 26-minute discussion:

In it I asked her:

  • What would be different if the world were more financially literate? In other words, what are the benefits? – to individuals, to their employers, to the world.
  • Our audience is in the business of pensions, in different roles. They may be parents, or even grandparents. How can they help the young ones in their families become more financially literate? And if the kids reach work without an adequate background in financial literacy, what can their employers do, to help?

Those were fundamental questions. In addition, I asked some questions relating to the current scene. I asked for her comments on:

  • how late-in-life debt is remaking retirement, and what can be done about it;
  • what’s ahead for investor education and investor protection, as we move out of the pandemic;
  • the stock market participation of women (and until Anna explained it, I hadn’t realized what caused such a large gender gap between men in women in this regard).

Was there anything she wanted to talk about that I hadn’t brought up? Yes there was: inequality, and how democratizing financial literacy can help protect people against financial shocks.

I took notes all the way through, because I learned so much.

We concluded by asking each other what is the best piece of advice we’ve been given. That’s the (by now) standard ending to the series of Board Talks that the Advisory Board members are making. Anna’s advice is a rule we should all live by, but I won’t tell you what it is – listen to the interview.

To my surprise, it turned out that my response has been well received too. In fact I actually had no idea how to respond! But since I knew I would be asked the question, I asked my wife Susan in advance to help me answer it, as she knows me much better than I know myself. And she came through! After our discussion formally ended, Anna and I talked about it a lot.

Here again is the link to our discussion: I have no doubt that you’ll thoroughly enjoy it!

And it’s a huge pleasure to acknowledge how much Mirjam Guldemond, of the P&I World Pension Summit, helped to make it happen and assembled the final version. Mirjam, you know how much I admire you and how grateful I am, not only for this but for all your help at the Summits over the years.


While on the subject of financial literacy, via LinkedIn earlier this year I heard from Mark Coan, founder of Moneysherpa, an Irish firm that, as he puts it, helps people to make better money choices through financial education.

I very much like his thoughts on financial literacy, especially in the context of all that I learned from Anna. Here’s a link to a specific piece I like: I particularly like the quick financial literacy test in it, one that has five questions that are not country-specific but have the same answers anywhere in the world. When you answer them online and get your results, you get feedback from which you learn from any that you may have answered incorrectly. Mark says that to pass the test you only need to get 3 of the 5 correct, yet only 33% of 150,000 people globally were able to do that.

I also like his 6 steps to “money zen” which, while it has an Irish context, also contains global truths: .

So I thought this would be a nice added resource for you, my readers. Hope you like it!



I have written about retirement planning before and some of that material also relates to topics or issues that are being discussed here. Where relevant I draw on material from three sources: The Retirement Plan Solution (co-authored with Bob Collie and Matt Smith, published by John Wiley & Sons, Inc., 2009), my foreword to Someday Rich (by Timothy Noonan and Matt Smith, also published by Wiley, 2012), and my occasional column The Art of Investment in the FT Money supplement of The Financial Times, published in the UK. I am grateful to the other authors and to The Financial Times for permission to use the material here.

4 Responses to “# 137 Financial Literacy: I Interviewed Prof. Annamaria Lusardi”

  1. michelle kaumbuthu says:

    Hi Don, Thank you. I have continued to enjoy reading and reflecting on your shared financial and life wisdom, stories and insights. As a woman who has grown up with single women and in a sole parent female households based on matriarchal knowledges, I was thankfully passed down information based on generational knowledge, yet many women are limited by their access to voting, workplaces and income security and late marriage divorce to enable building for their future.’

    I am really looking forward to hear the interview with Dr Annamaria Lusardi via Unfortunately I am not able to connect to site nor to your link for an unknown reason. I use latest apple mobile platforms. Any chance you could forward a download of the interview? Or upload to Apple podcast platform?

    Thank you for your contributions to making the world a better place to be and live.
    Please continue to bring the wonderful passions you are sharing. All the best Michelle.

    • Don Ezra says:

      Thanks very much for your generous words, Michelle. I went to the website and then clicked on Multimedia and found the interview on that page, halfway down. Can you let me know if that works for you? (Use for easier correspondence.) If that doesn’t work, I’ll ask Mirjam at WPS about the Apple podcast platform.

  2. Ted Harris says:

    I thoroughly enjoyed the interview. Personally, I think anyone who believes that we need to improve financial literacy at the individual level should devote some time to being an activist. Not only do people need the tools, we need to enable them to detect the “fake news” of finance, such as scams. While it’s great for parents to educate their kids, many parents are not educated themselves, hence we need to ensure that financial literacy is taught in schools – an area for activism. I agree that a piggy bank is a good place to start – I enjoyed seeing mine fill up and was delighted the the bank would pay me to deposit my money with them.

    The benefits of financial literacy are numerous – for individuals and society. I agree that it can help happiness. To young people, I have likened money to oxygen and debt, other than for a house or car, as an instrument of the devil. Credit is a big problem today, as is the idea of deferred gratification. However, I am heartened by declining birth rates, if for no other reason than young couples are realizing the size of family they can afford to provide for and educate.

    Experience has shown me that financial literacy is not necessarily a result of formal education or occupation. I had a truck driver client who had a large RRSP and a large taxable account and a corporate accounting client who introduced a mandatory pension plan because one of their senior partners spent his money on lifestyle and had saved virtually nothing for retirement.

    With regard to gender, I think most micro-finance schemes are designed for women in developing countries, and are very successful. I’m involved with one, and it has been very successful.

    Finally, your audience are familiar with behavioural finance – to me this is a big challenge. As illustrated with the truck driver and the accountant, translating the education to action is not always easy. Nonetheless, I urge all to whom it matters to be activists in promoting financial literacy. It will make for happier citizens and a more successful society.

    • Don Ezra says:

      Well said, Ted — and obviously it’s deeply felt too. Thanks for sharing it — I agree with what you say, and the examples you cite help to educate me.

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