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    The document discusses challenges with financial literacy in the United States. It finds that over 60% of Americans fail basic financial literacy tests and this failure rate has been increasing in recent years. Low financial literacy can lead to overspending, high debt levels, and bankruptcy. The document also notes alarming trends like high lottery spending and subprime borrowers paying much higher interest rates. It sizes the potential market for improving financial literacy at around 102 million middle-income Americans without a financial advisor.

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    The document discusses challenges with financial literacy in the United States. It finds that over 60% of Americans fail basic financial literacy tests and this failure rate has been increasing in recent years. Low financial literacy can lead to overspending, high debt levels, and bankruptcy. The document also notes alarming trends like high lottery spending and subprime borrowers paying much higher interest rates. It sizes the potential market for improving financial literacy at around 102 million middle-income Americans without a financial advisor.

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    59 views20 pages

    Team HMW

    Uploaded by

    api-369563084
    The document discusses challenges with financial literacy in the United States. It finds that over 60% of Americans fail basic financial literacy tests and this failure rate has been increasing in recent years. Low financial literacy can lead to overspending, high debt levels, and bankruptcy. The document also notes alarming trends like high lottery spending and subprime borrowers paying much higher interest rates. It sizes the potential market for improving financial literacy at around 102 million middle-income Americans without a financial advisor.

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    © All Rights Reserved
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    of 20

    Chandana Batchu

    AND YET

    In fact, about 23 percent of U.S. methane


    emissions comes from landfill food
    In the US alone, 40% ($160B) of food
    goes uneaten.
    How might we waste less food?
    Andrew Martin

    Andrew martin
    Andrew Martin

    Andrew Martin Blue Cohort EWMBA 290T


    Scope

    How Bad is Americas Financial Literacy Problem?


    Financial Literacy Test Failure Rate
    Americans demonstrate low levels of
    64% 63%
    financial literacy and have trouble
    applying financial tools to real-life 62% 61%
    situations. 60%
    58%
    58%
    Financial literacy failure rate continues to
    56%
    increase, as Americans fundamental level
    54%
    of financial knowledge deteriorates.
    2009 2012 2015

    FINRA Survey Results Need / Importance


    18% spend more than they earn
    United States financial literacy issue warrants
    concern, as it is wide ranging and may deepen future
    economic downturns and broaden income inequality.
    21% had delinquent bills Americans who lack a basic understanding of personal
    finance are more likely to become overleveraged, pay
    excessive interest expense, and file for chapter 13
    26% used non-bank loans (payday loans or bankruptcy.
    pawnshop loans)

    Andrew Martin Blue Cohort EWMBA 290T


    Findings

    Some Alarming Trends in the United States


    Annual US Lottery Spending Household Debt to GDP
    $ Billions
    Average APR by FICO
    Score
    Subprim Near Prim
    $80.0 $70.5 25% e prime e UK 183%
    $70.0
    $60.0 Australia 102%
    20%
    $50.0 Canada 97%
    $40.0 15% Korea 85%
    $30.0
    $17.8 $14.6 34% 17% 49% US 80%
    $20.0 $13.1 $10.7
    $6.8 10% Spain 77%
    $10.0
    $- Italy 57%
    5%
    France 55%
    Germany 53%
    0%
    300 500 700 0% 50% 100% 150% 200%

    Annual lottery spend: $218 per capita. Subprime borrowers on average pay 3.5x Among developed countries, US
    Expected Return: Trade $1 for $0.53. more in interest expense than prime households carry more debt relative to
    Households earning less than $13k per borrowers. GDP than Spain, Italy, France and
    year spend 3-9% of income on the Over 1/3 of Americans are considered Germany.
    lotteryin line with clothing and subprime.
    insurance.

    Andrew Martin Blue Cohort EWMBA 290T


    Market Sizing

    Financial Literacy in the US - Total Addressable Market: 189 million people

    Potential Addressable Market


    2017 US Working Age Population (16 64): 205 million
    205 million

    Total Addressable Market


    92% of working population has a savings account: ~189
    189 million million

    Served Available Market


    62% of Americans do not have a financial advisor: ~127 million
    127 million

    Serviceable and Obtainable Markets


    Middle 80% of Americans without a financial advisor: ~102 million
    102 million

    Andrew Martin Blue Cohort EWMBA 290T

    Andrew Martin Blue Cohort EWMBA 290T


    Chase Motley
    People dont know what to
    do with their pets!
    HOW MIGHT WE

    enable pet owners to take their pets


    along for the ride?
    Reid Snyder
    AgTech is not new
    Considerable modern
    challenges
    How might we empower
    farmers and enable sustainable
    agricultural production?
    Badier Velji
    How Might We create a system that
    allows people to pay for goods and
    services with their skills?

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