English
Français
Italiano
Español
FinAncial EducatIon foR Legal economy
Introduction
Пускане на видеото
Welcome
At the origin of the term “economics” are indeed two Greek words, οικια (oikìa, “house” or “home”) and νομος (nòmos, “law” or “rule”), which if read together give the term a shade of domestic management. This is to say that, from the roots of European civilization, economics is the science that studies the efficient allocation and use of limited resources: efficient use means also less waste, another rather popular concept these days.
Finance, which also makes headlines, is only a branch of economics, namely the one devoted to the exchange of very particular and sometimes sophisticated services, which allow us to benefit from insurance and pension schemes, or to take out a mortgage for a house or a car, or to start a business, among others. Some of those services involve very advanced mathematics, but economics at its core need not be that complex: you won’t need advanced math skills to come up with your family vacation budget. And even if you did, there are tools that can help you along the way, and our plan is to make you acquainted with those.
Things to keep in mind when surfing through life with this material are the following:
1. You cannot become rich overnight without risks. No law-abiding citizen became rich overnight without running a significant risk. The higher the risk, the higher the return, and whoever tells you otherwise is either insane, or in bad faith: in the latter case, do not act on their advice, but run and/or consider reporting them to the authorities.
2. There are no stupid questions. There are no stupid questions, especially when it comes to understanding the real cost of things. If someone is trying to sell you a product or a service, it is in your interest to understand what you are buying: you are the customer, you have the right to know all the details, and the right to change your mind at any time. If you believe asking an extra question makes you look stupid, imagine how stupid you will feel once you get scammed and you cannot recover your money. Whoever tries to shame you for asking too many questions is probably in bad faith, in which case, see the advice at the previous point.
3. Financial literacy tests are good. Authorised distributors of financial products and services are often required to ask you to take a “financial literacy test”. This is for your own benefit, as it measures your level of understanding of the risks you could be taking, and it forbids them from offering you products too sophisticated for your level of understanding. If they try to talk you into buying something very complex that you cannot wholly comprehend, they are not doing you a favour and again, see point 1.
With no further ado, let’s delve into it!
Goal of the course and target audience
This course is directed to households, entrepreneurs, SMEs, young people no longer in education nor vocational training, and older people that did not have a chance to learn about these topics earlier. The idea is to provide a basic understanding of some economic and financial concepts which will help you make better and more informed financial decisions, as well as give you some tips to avoid scammers, or at least the most common traps.
Structure of the course
Things to keep in mind when surfing through life with this material are the following
1. Basic economic definitions
In this module, you will learn the time value of money, what a market is and how it determines prices through demand and supply, what inflation and deflation are and how they affect prices. Last, you will be introduced to a very special and important market: the market for risk.
2. Household income accounting
In this module, you will learn practical ways of keeping track of your private spending and how this will help you plan your savings for future projects.
3. Financial concepts
In this module, you will learn about the main instruments sold on financial markets (such as stocks, bonds, or derivatives) and what needs each of those covers. You will also learn how those instruments are related to each other and to the real economy.
4. Legal concepts
In this module, you will learn the main concepts that most of us encounter in real life when looking for jobs, paying a bill, or starting a business. You need to know your rights to defend yourself, and you also need to know your duties vis-à-vis the law.
5. Practical examples of common scams/fraudulent behaviour you could be a target for In this module, you will test your ability to recognise the red flags of potential frauds and misconducts by going through typical scenarios and practical examples of scam schemes. Since in real life it might be difficult to recognise scammers and people who want to take advantage of loopholes and weaknesses, these examples should give you some hints to help you avoid getting swindled in a variety of situations.
There is no specific order you need to follow, even though there are certainly advantages in taking the different modules in the suggested order, as some concepts presented in later modules might build on concepts explained in previous ones.
Each course is composed of a main learning content, which is meant for everyone. Next to the main learning, you will have some options as follows:
Definitions. While going through the main learning module, you will be presented with some key financial definitions. If you are already familiar with them, you can just continue the course, otherwise you can click on them and get further explanations.
Formulas and maths. If you want to challenge yourself with some deeper knowledge around the key concept presented, you can delve into some mathematical formulas supporting and explaining how those concepts are built.
Check your understanding. As part of each module, you will have the possibility to check and test your understanding with a series of exercises.
Further readings. If you are curious to learn more, each module will offer you links and tips for further reading when applicable.
