Would you be surprised to learn you know more about financial terminology than you think? Research by eToro shows that British adults actually know much more about money and investing than they give themselves credit for.
Could you be underestimating yourself?
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When quizzed on the meaning of key investment terms such as ‘dividend’, ‘FTSE 100’ and ‘equity’, respondents gave the correct answer more than 70% of the time on average. In fact, the vast majority of the general public knew even more technical terms, with four out of five correctly identifying Bitcoin as a form of digital currency.
Long-term trends show that stock market investing tends to offer much better returns than a typical bank or building society savings account, meaning those who choose to invest can potentially grow their money much faster. And we believe that, because so many people are bombarded with news and information about the stock market, they have absorbed more information than they realise.
Iqbal V. Gandham, UK Managing Director of eToro, said: “Most people think investing is just something that the super-rich or people who wear pin-stripe suits do. But that couldn’t be further from the truth. “No matter whether you have lots of money or even a little bit and you want to grow your cash long-term, then the chances are that investing is the right option for you.
“Our research shows that while many people say they are initially put off by the complicated terms used in the investment industry, lots of us already know way more than we think we do. It’s like anything new, whether it’s VAT or VAR in football, people just need a little bit of time and confidence to understand the terms involved.
Investing for the long-term
Because of the potential for higher returns, most experts agree that investing is the best way for someone to grow their wealth long-term. Particularly in a low interest environment, where returns for savers can often fail to beat inflation.
And yet despite that, the data shows that many people are put off investing because they feel it is too complicated, or suited only to those who work in financial services. More than a quarter of people believe that investing is just for bankers, the-super rich or those working in financial services, our study found.
A further one in four believe they do not dress smartly enough to fit the profile of a typical investor, further evidence that many believe investing is for the upper echelons of society.
However, a third of those interviewed said they would be willing to invest in company shares if they had the support of an expert.
Gandham said: “An investment doesn’t need to be a large amount of money — it could be the equivalent of a trip to the cinema, or a takeaway — and it’s important to remember it’s never too late to start. “And the great thing is, there are so many amazing – and free – resources on the internet, it has never been easier to plug gaps in our knowledge.
“The days of investing being the preserve of the upper echelons are over. “eToro is on a mission to get Britain investing. The industry needs to be better at communicating to people how they can access the market, either by doing it for themselves or copying others, using social investing.”