Financial Literacy: Finding Your Way in the Financial Markets, Audiobook Review

I recently listened to the audiobook Financial Literacy: Finding Your Way in the Financial Markets on Audible. Written and narrated by Connel Fullenkamp, a Duke professor of economics.

If you are looking for a great resource about financial literacy this is a great listen. It's always helpful to build out our knowledge base so we can feel more confident and less emotional about the financial tools we use like mortgages, credit cards, banks, and stocks.

The audiobook is rated over 4.5 stars with almost eleven hundred reviews.

There are twenty-four chapters, each about thirty minutes a piece, just long enough to teach to a classroom full of eager students over the course of a semester, he is a college professor after all.

As there are already ample audiobook reviews online of Financial Literacy: Finding Your Way in the Financial Markets, I have chosen to focus my review on the two chapters I found the most intriguing.

Chapter 24, The Future of Finance. This is not the first book I've come across where at the end of the book the knowledgeable and experienced author tries to make forward-looking guesses on where their field is heading. Generally, I find the author's pontifications do not bear out in the real world. But that's not the case with Connel Fullenkamp. One of the great pleasures I had in listening to his book is I found it a decade after it's been compiled from his lectures and published. So, a fair amount of time has passed. Which is good when discussing the future! And even with a decade gone by, I feel most his forward-looking guesses on the world of finance are still in their infancy.

He talks of large companies wanting to become lenders: Think Apple, they recently launched a credit card that has already attracted millions of customers.

Peer to Peer lending (P2P): Companies like Upstart and Lending Club are involved in this space. Everyday people can loan out money to small businesses and the like with interest rates and terms of repayment that they are willing to take on.

Crowdfunding: This is where a group of people invest in a company the same way angel investors or venture capitalist might. Angel investors being wealthy individuals or venture capitalist companies specifically designed to plow money into companies in the hopes of growing them and generating massive returns on the capital they handed out. These companies are much younger and with less revenue than the types of companies you might typically see in the stock market. The novelty of crowdfunding is now anyone can invest (with a few stipulations as to how much you can invest) thanks to the Jumpstart Our Business Startups (JOBS) of 2012. Prior to the JOBS law only rich individuals (an individual with more than one million in assets excluding his/her primary residence) could invest. Now, the opportunity comes to everyone. As a disclaimer I think crowdfunding will also become a big driver in the future and as such I am invested in Start Engine and Wefunder. I have also made other investments through Start Engine, Wefunder, Seed Invest (acquired by Start Engine) and Equity Zen.

The author's final note is that in the world of finance one thing that is almost certain is that we will all be required to be more responsible for our own financial health. Companies have rid themselves of pensions and the retirement benefits most people receive today have to be managed by ourselves. And who hasn't heard the politicians tell us that social security will go bankrupt in the future? All this leads to the conclusion that we all need to step up our game and increase our knowledge of financial instruments and situations.

The other chapter I found intriguing was, Chapter 23, The Whys and Hows of Financial Regulation. I might find this chapter more interesting than most. It talks about how many of the government agencies that regulate bank and financial institutions today were born out of the collapse of the financial industry during and after the Great Depression. I think I need an entire book on this subject. Any recommendations?

I hope this review of Financial Literacy: Finding Your Way in the Financial Markets was helpful. I recommend the book, or in this case the audiobook for anyone that would like to better understand how money operates in our society and the ways in which many of these instruments like mortgages and credit cards or banks and regulators function.