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Free financial survey questionnaire to booster your monetary self-awareness

Financial survey questionnaire - personal finance
Free financial survey questionnaire to booster your monetary self-awareness

Answering a financial survey questionnaire is an excellent way of assessing the areas of personal finances you are good at, and the ones you need to improve.

  • A financial survey questionnaire is the first step to understand our personal finance gaps. From college students to young adults and mid-career Millenials, we are all being increasingly put in charge of our financial security after retirement. This financial survey questionnaire has helped me to access my financial knowledge strengths and weakness.
  • There is a vast number of financial products to choose from and little guidance on how to do so. If we are to take charge of our economic future, we must have the proper monetary self-awareness to do so. This is why choosing a financial literacy quiz is so essential.
  • I have used this financial survey questionnaire to evaluate my own monetary self-awareness strengths and weakness. This is my plan on how to improve my personal finances skills by studying a colossal quantity of authentic financial knowledge.
  • Moving forward, a basic financial planning questionnaire can help you understand your personal finance plan strengths and weakness.
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Leveraging the value of the Financial Survey Questionnaire

Leveraging the value of the Financial Survey Questionnaire

  1. Answer the 16 questions: Answer all questions truthfully. If you do not know the answer, don´t guess., just answer I don´t know. This way you will keep track of the topics you need to improve on.
  2. Take note of your score: Check your score and take not of the topics you need to improve one.
  3. Check the answers: I have included in this post a detailed answer for each one of the questions.
  4. Continue improving: Check how I improved my financial literacy by studying from a colossal quantity of authentic financial knowledge.

Follow this link to start the personal finance questionnaire.

No e-mail, no subscription, no log-in. Just well-engineered personal finance questions to evaluate your financial knowledge. 16 questions, 5 minutes.

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Financial survey questionnaire answers

Financial survey questionnaire answers

Let’s check the result of the financial survey questionnaire and verify how these questions relate to your life.

Note that for the sake of simplicity, the scoring calculation of this financial survey takes all questions with the same weight. Survey questions for financial literacy may have attributed weight to counter for the complexity of the questions. If you wish to do so, my suggestion is to apply a 50% for the first five financial survey questions, which are the most basic.

Basic personal finance questions

The first five questions of the financial literacy questionnaire cover economic fundamentals which are key when measuring financial literacy. This first set of questions aims to assess your basic financial literacy. They cover topics ranging from the working of interest rates and interest compounding to the effect of inflation, discounting, and nominal versus real values.

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The ability to use mathematics in everyday life

Question 1 – Numeracy – The ability to use mathematics in everyday life.

Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?

The first question is also an easier one. About 91% of the respondents get it right. The importance of numeracy on personal finances cannot be understated. It’s not about being good with math or knowing advanced calculus. It’s about translating the basic mathematics knowledge to your day to day life..

Numeracy involves skills that aren’t always taught in the classroom – the ability to use numbers and solve problems in real life. It means having the confidence and skill to use numbers and mathematical approaches in all aspects of life.

If you want to take a more comprehensive test on numeracy. You can try the UK National Numeracy Challenge. It took me a good thirty minutes, a calculator, and some patience to score 98%. The test is free, but you will have to register to have access to it. Once I finished the test, I had to input my gender, age, and location to see the results. This last part I think was unnecessary, they could have asked for all the information from the start.

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 Interest compounding - The recipe to make you wealthy (or poor)

Question 2 – Interest compounding – The recipe to make you wealthy (or poor)

Suppose you had $100 in a savings account and the interest rate is 20% per year and you never withdraw money or interest payments. After 5 years, how much would you have on this account in total?

About 76% of people get this question right. That’s quite a drop from 91% on the first question. And the concept around it is not that different.

Interest compounding is the beating heart of investing, it is the enabler to build wealth in the long run. It is the critical tool of anyone joining the world of personal finances. It is also the principle that multiplies your credit card and student loan debt. That is why it is so important to understand interest compounding! You can get rich or poor because of it.

Compound interest is what makes an investment of $200 a month at 5% a year to become $82.000 in 20 years. That is $48.000 of investment and $34.000 of interest! Turn this 20 years into 30, and you have $160,000.

There are countless interest compounding calculators around. The best I have seen so far is from Calculate Stuff. No registration, no ads, just a sound, and an easy interface to calculate compound interest.

Making plans for long term savings

It is easy to get carried away on ideas for long term savings. There are two crucial things to take into consideration when doing such calculations:

  1. What interest rate should you use? The percentage used here should reflect the average net returns of your investment portfolio. It is important to emphasize that we are talking about net returns, meaning your average portfolio returns minus taxes, fees, and inflation. This will depend heavily on your risk appetite and on the country you are investing in. A good rule o thumb for a moderate portfolio is from 5 to 7% a year.
  2. It is not easy to have a lot of cash in the bank. Most people usually underestimate how hard it is to have a lot of money in the bank until it is too late. There is a reason people don’t save 200 dollars a month for 20 years. At some point in the way, you end up deciding to buy a second car. Or even a countryside property, a boat, or something else that at the time seems like a great idea. If you are making any long term saving plan, ensure to understand compound interest. But at the same time, make sure you know yourself first.
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Financial survey questionnaire - personal finance

Question 3 – Inflation – Where did my money go?

Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?

Inflation is not a strange concept for most. In the present financial survey questionnaire, 83% of the participants answered question three correctly.

Inflation represents the increase in prices of goods and services over a period of time. That means that with inflation, over time, money it’s value. Very high inflation rates are usually caused by the supply of money growing faster than the economy.

Although we usually tend to see inflation as a bad thing, it is something needed for economic stability. Most economists favor a low and steady rate of inflation. Low, as opposed to zero or negative inflation, reduces the severity of economic recessions. It does that by enabling the labor market to adjust more quickly in a downturn and minimizes the risk that a liquidity trap prevents monetary policy from stabilizing the economy. You can find a good article about inflation at Wikipedia.

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Time Value of Money

Question 4 – Time Value of Money

Assume a friend inherits $10,000 today and his sibling inherits $10,000 3 years from now. Who is richer because of the inheritance?

Question four is the hardest so far, only 72% get it right, and it is related to the time value of money, or TVM.

The time value of money states that any money that is available now is worth more than the identical sum in the future. Money that is available now has a potential earning capacity, meaning that the provided money can earn interest if invested. Time value of money, therefore, accounts for the opportunity gain of having the money now as opposed to later.

In addition to the opportunity cost, by receiving the money later, you are incurring inflation, meaning that your purchase power today tends to be higher than in the future. Finally, by delaying the payment, there is an increase in the default risk.

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Money illusion

Question 5 – Money illusion

Suppose that in the year 2050, your income has doubled and the prices of all goods have doubled too. In 2050, how much will you be able to buy with your income?

Another difficult question from this financial survey questionnaire, only 72% get this one right. Although not commonly discussed, money illusion is a critical personal finance topic that must be well understood.

Money illusion proposes that people have a tendency to view their wealth and income in nominal terms, rather than recognize its real value, adjusted for inflation. The face value (nominal value) of money is mistaken for its purchasing power (actual value) at a previous point in time. Viewing purchasing power, as measured by the nominal value, is false. As modern fiat currencies have no intrinsic value, and their real amount depends purely on the price level.

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Advanced personal finance questions

Advanced personal finance questions

The second set of questions aims to measure more advanced financial knowledge and it is more focus on a money management survey.

This session covers topics such as the difference between stocks and bonds, the function of the stock market, the working of risk diversification, and the relationship between bond prices and interest rates. Risk management in personal financial planning is a key element of personal finances and understanding the topics of the advanced questions below you take you closer to your financial freedom.

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Question 6 - The function of the stock market?

Question 6 – The function of the stock market?

Everyone has heard about the stock market, many people talk about it. If you turn on the news, it is hard to go by without it being mentioned at least once. Nevertheless, when asked about what is the function of stock markets, only 67% get it right.

In simple terms, the stock market is the aggregation of buyers and sellers of stocks.

stock exchange, on the other hand, is a regulated marketplace that connects buyers and sellers of diverse financial securities such as stocks, bonds, and warrants. In other words, it is the physical place where the trade takes place. Stock exchanges date back more than 400 years. The first stock exchange was established in Amsterdam in 1602 to trade shares of the Dutch East India Company.

Each country will usually have at least one stock exchange where its leading companies will list their stocks (or shares). Today there are less than 20 stock exchanges with a market capitalization of over $1 trillion. The so-called ‘$1 trillion club’ exchanges account for more than 80% of the global market capitalization.

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Financial survey questionnaire - personal finance without fear

Question 7 – What are Mutual funds?

I am sure everyone has heard about mutual funds. Several of us have even invested money in them. Nevertheless, I am sure many of us don’t fully understand what mutual funds are and how they work. That can be seen by this financial survey questionnaire, only 67% of respondents get this question right.

A mutual fund pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.

From this brief explanation, it is clear that a mutual fund can bring a tremendous positive impact on your portfolio. By investing in a mutual fund, you can quickly diversify your portfolio and have access to investments that usually are available only for professional investors.

But don’t be fooled by the sales pitch of your bank manager or broker. A mutual fund is as good as the people managing it. Furthermore, there are dozens of different types of funds that might fit better or worse to your current investment portfolio. High maintenance fees and poor portfolio management can easily manage your mutual fund, underperform the market.

ETFs or exchange-traded funds often offer similar or better results than mutual funds. To understand how to select a good ETF and a good mutual fund, read my article on how to choose a mutual fund benchmark index.

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Question 8 - What is a stock?

Question 8 – What is a stock?

The stock of a corporation is all of the shares into which ownership of the corporation is divided. A stock represents fractional ownership of the corporation in proportion to the total number of shares. This typically entitles the stockholder to that fraction of the company’s earnings, proceeds from the liquidation of assets or voting power, often dividing these up in proportion to the amount of money each stockholder has invested.

A public company, or publicly-traded company,  is a company whose ownership is organized via shares of stock.

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What are Bonds?

Question 9 and 13 – What are Bonds?

Bonds are one of the most common investment classes, but still, only 56% answer this question correctly in the financial survey questionnaire. This question has actually one of the highest scores of “do not know” responses, 26%.

Bonds are debt securities. Meaning that when you buy a bond, you are actually lending your money to the issuer of the bond. The bond terms will define how much interest will be paid for the holder of the bond.

Corporate bonds are debt securities issued by a corporation, likewise, govenrment bonds are issued by the government.

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Risk, volatility, and potential returns over time

Questions 10, 11, 14, 15 and 16 – Risk, volatility, and potential returns over time

Risk, volatility, and potential returns are directly linked. Overall, the higher the risk, the higher the volatility, and the higher the potential gains. If you think about it, it does make sense. If you buy a risky asset, you will see it fluctuating up and down more often than if you buy safer security.

We can say that volatility is directly proportional to the asset risk. As such, to the potential gain, you can expect. Therefore, from the previous question, it’s clear to see that stocks are more volatile than bonds and that savings account is the less volatile of all. Of all the difficult questions in this quiz, this one has shown the highest rate of correct answers, 68%!

Simply put, volatility is the range of price change security experiences over a given time. If the price stays relatively stable, the security has low volatility. Highly volatile security hits new highs and lows quickly move erratically and has rapid increases and dramatic falls.

People tend to experience the pain of loss more acutely than the joy of gain. Therefore a volatile stock that moves up as often as it does down may still seem like an unnecessarily risky proposition. However, what seasoned equities traders know that the average person may not is that market volatility actually provides numerous money-making opportunities for the patient investor. Investing is inherently about risk, but risk works both ways. Each trade carries with it the risk both of failure and of success. Without volatility, there is a lower risk of either.

Over an extended period, the highest return comes typically from stocks, as does the higher share price volatility and risk. This is quite clear if we use the U.S. market as an example. When planning how to invest your money, it is important to understand what is your risk tolerance.

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Savings account historical returns

Potential returns over time

Savings account historical returns

Looking at the 5 years CD (certificate of deposit) rate over the past 10 years, we can see that it fluctuated from 0.8 to 2.2% per year. Shorter-term deposits show an even smaller return.

Bonds historical returns

The 10-year Treasury bond is the benchmark used to decide mortgage rates across the U.S. and is the most liquid and widely traded bond in the world. In the past 10 years, this bond has paid between 1.5% and 4% per year.

Stocks historical returns

Over the past 10 years, the SP500 10 Year Annualized Return rate has given an average return of 6.14%. To see how to increase your stock returns you can read this great article my MoneyByRamey on dividends.

BONUS TIP: You can read more about how to deal with risk when investing in this post of mine: Hope, Predictions and Historical Data: 3 recipes for financial failure

Question 12 – Diversification

Spreading your money over different asset classes, or diversifying your portfolio, is the best way of reducing the risk of losing money. At the same time, as you reduce the risk, you also reduce the chance of high returns. Therefore, diversification is good up to a certain point, and this sweet spot will depend on the investor to investor depending on your risk appetite.

The risk-reward decision around diversification is one of my favorite topics, that’s why I have written an entire post about it. You can read more here: How to take risks when managing your money? 3 lessons I learned to avoid poor money management

Congratulations, you have completed the financial literacy survey questionnaire. How well did you do?

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Financial questionnaire templates

Financial questionnaire templates

If you got this far in the post, you might be wanting more personal finance survey questions to get you in the right mindset. Here is list of financial questionnaire templates which I have compiled. In summary they are basic questions financial advisors should ask clients during their client financial review.

Basic financial planning questionnaire:

You can find below a sample of a financial planning survey questionnaire:

  • Is your income consistent & reliable?
  • Do you follow a budget?
  • Do you use some system to track your expenses?
  • Do you know what your annual or monthly living expenses are (excluding taxes)?
  • How much do you spend on pension, health care and insurance?

Financial planning assessment

The questions below are a sample questionnaire about financial problem:

Pension:

  • Are you covered by a company pension plan?
  • How much is your annual retirement contributions to your employer plan?
  • How much is your annual annual IRA contribution?

Retirement:

  • When do you plan on retiring?
  • How are you saving for retirement?
  • Are you comfortable that you are on track to build a sufficient financial-freedom nest egg?
  • What does “retirement” mean for you?
  • Are you concerned that you might outlive your retirement money?
  • Are you satisfied that your money will last you for the rest of your life?
  • Have you projected the effect on your net worth of the desired retirement distributions over your life expectancy?
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Financial planning survey

Financial planning survey

Insurance:

  • How much life insurance do you have?
  • Do you have health insurance?
  • Do you have disability insurance?
  • Do you have real estate insurance?

Education planning:

  • Will your children be attending college?
  • Have you determined how much it will cost to send them to college?
  • Have you established college savings funds for your children?
  • Will you have enough saved to cover college costs? If you haven’t, how will you pay for it?
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How to choose a mutual fund benchmark index

Wealth management questionnaire sample

If you are interested in a financial management survey questionnaire, here are some more personal finance survey questions:

Generational wealth:

  • Do you have a Will, Durable Power of Attorney and Health Care Power?
  • When did you last review your estate plan and wills?
  • If you were to die tomorrow, do you know how your assets would be distributed?
  • If you were to die tomorrow, do you know if your family would have enough resources to maintain their present lifestyle?
  • Do you know what rate of return is required on your money for you to retire on your schedule?

Investment Planning:

  • How do you determine where to invest your money?
  • Are you comfortable that your investments are sufficiently diversified so that when one decreases in value there is a possibility that another will help stabilize the portfolio?
  • Do your investment selections match your risk tolerance? What did you do the last time the stock market went down by 5% or more?
  • Are you pleased with your past investment performance? Why or why not?
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Financial needs assessment questions

Financial needs assessment questions

  • Are you missing anything in your life right now that is important to you? What’s not happening that you want to happen?
  • Where do you want be and what do you want to be doing in 5 years? In 10 years?
  • If you had all the money in the world, what would you do differently from what you’re doing now?
  • You had a car accident and you are totally disabled. How would this change your income and lifestyle?
  • You just returned from the doctor’s office, and found that you have five to seven years to live. The only good news is that you’ll be healthy for all of those five to seven years. How would you live those five to seven years?
  • You just came back from the doctor’s office, but this time you have been told that you have just one day to live. Look back. What regrets do you have?
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How to conquer genuine financial freedom

Financial discovery questions

This template is usually used as a powerful wealth management survey. They take the lines of self awareness survey questions and are especially powerful to be included in any college student financial survey questionnaire.

To complete this personal finance survey, rate from 1 to 5 how much you agree with the following statements:

  • I would rather work longer than reduce my standard of living in retirement.
  • I feel that I/we can reduce our current living expenses to save more for the future if needed.
  • I am more concerned about protecting my assets than about growth.
  • I prefer the ease of mutual funds over individual securities.
  • I am comfortable with investments that promise slow, long term appreciation and growth
  • I don’t brood over bad investment decisions I’ve made in the past
  • I feel comfortable with aggressive growth investments
  • I don’t like surprises.
  • I am optimistic about my financial future.
  • My immediate concern is for income rather than growth opportunities.
  • I am a risk taker.
  • I make investment decisions comfortably and quickly
  • I like predictability and routine in my daily life.
  • I usually pick the tried and true, the slow, safe but sure investments.
  • I need to focus my investment efforts on building cash reserves.
  • I prefer predictable, steady return on my investments, even if the return is low.

Read more:

Continue reading and learn more about finances:

Bonus Topic: Learn here 6 proved steps on how to manage money and unlock financial freedom. Start investing in your financial freedom today.


Featured video on risk management in personal financial planning. How to be reasonable and take moderate risks with money.

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About the author:

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Personal Finance Made Easy

Hi, I am Leblon Blue. Mid-thirties senior manager on a large corporation. Happily married for seven years and waiting for my first kid. I have dedicated my past 15 years to build an engineering background and a stable career. After working in Europe, Scandinavia, and Latin America, I am now based in the Persian Gulf, where I manage the performance of a large corporation that operates in the region.

Find more about Leblon Blue.

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What do you think?

Written by Leblon Blue

Career manager with engineering background. Finance enthusiast. Recently started this blog. Enjoying financial freedom.

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