Are you an earthworm drying up on scorching asphalt? (On financial literacy and behavior)

Today's article is about financial literacy and acting on that information. There is a very big difference between "what you know" and "what you can do." I would like to think about this.

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I go for walks to manage my health. It is a daily morning habit, but since this summer is so hot, I go for walks and do exercises early in the morning, around 5 o'clock, before and after sunrise.

This is because I have the knowledge that if I walk during the day, there is a risk of heatstroke and I could potentially ruin my health, and I am able to take action to avoid it.

I started writing with stiff language, but today I will think about whether or not I was able to take evasive action.

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During the day, I go to an air-conditioned gym to do muscle training. I have no choice but to walk under the scorching sun for the 10-minute distance from my house to the gym.

Then, I see earthworms dead on the blazing asphalt.

It is scorching weather where even a human might dry up. It is only natural that an earthworm would die immediately if it were on the asphalt, right?

Now, why did the earthworms die on the asphalt?

There are two possibilities: ・The earthworm did not know that the asphalt was hot. ・The earthworm knew the asphalt was hot, but did not know how to avoid it.

Perhaps, and this is just a guess, the earthworm did not know that the asphalt was hot, so it could not imagine that it would die. After all, it is an earthworm.

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Let me give another example, this time using elderly people. They are humans. Elderly people, as humans, know the knowledge that they should drink water frequently to prevent heatstroke and that they should spend time at home with the air conditioning on.

They possess this as knowledge.

However, unfortunately, we see news of elderly people who are unable to take that action and are unfortunately taken away by ambulance.

Why were the elderly unable to take action to prevent heatstroke even though they possessed the knowledge?

Perhaps, and this is just a guess, it is thought that they did not take action to prevent heatstroke because they lacked a sense of crisis that threatened their own lives, saying things like "I don't like air conditioning" or "drinking too much water is not good."

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In terms of financial literacy, are you a
earthworm?
an elderly person?

The earthworm dried up because it didn't know any better.
The elderly person was taken to the hospital by ambulance because they knew, but couldn't take action.

The lukewarm water in the pot might be hard to notice because it gets hot little by little. The asphalt under the scorching sun is a temperature that will dry you up the moment you touch it. It is something you must not approach.

If you are a human, no one would lie down on that scorching asphalt like an earthworm. Because you are human, you possess knowledge. You know that there is a danger of drying up and dying on the asphalt.

However, when it comes to financial information, there are people who lack that knowledge and lie down on the asphalt to dry up. Also, there are many people who have the knowledge but do not take action.

Specifically, there are investment products you should not approach, such as futures trading, FX, structured bonds, and margin trading. You have at least heard of them, right?

Why do you
pour large sums of money into things you don't know?

Why do you
not take avoidance action even though you know?

Why? Why?

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