I recently asked 20 people I know, all in their early to mid-thirties, the following simple open-ended question: How has the current recession and stock market crash affected your RRSP and/or other investments?

One person gave me a specific percentage of how much he was down this year. Three said they were probably down on the year but were not worried about it. Five people said they just keep their money in a savings account because they don’t understand finance and are afraid of anything other than cash or GICs. Ten others said they haven’t really checked and were meaning to get around to calling their financial advisor about it. And one even said, to my absolute horror, “What stock market crash?”

Now I’m not a financial advisor, or an investment guru. I don’t have a formal education in finance or economics. But financial literacy doesn’t have to come with a degree. I read voraciously: books, magazines, and especially websites. The Internet offers people a wealth of knowledge at their fingertips. All the information in the world is available a click or two away. We hear so much about the lack of literacy in this country, but not enough about the lack of financial literacy. Yet, it is vital that everyone know at least enough to have an informed conversation about their investment portfolio.

Like re-modelling your own kitchen or re-paving your own driveway, “do-it-yourself” investing isn’t for everyone. You have to know what you’re doing or the results could be disastrous. But the sad fact is that most people know more about celebrity gossip and hockey statistics than they do about basic finance. What’s more, many couldn’t care less. And that’s what shocks me the most. I can understand the ignorance, but the apathy leaves me shaking my head in disbelief every time.

We work hard for our money. Eight hours a day, five days a week, often more, for most of our lives to buy homes, cars, and other things, all the while hopefully saving for the day when we can retire and leave the rat race behind. And yet, so many people either deposit their money in a bank to be eaten away by inflation, or blindly hand everything over to their financial advisor. Don’t get me wrong, there are many great financial advisors out there. But like anyone else in the service industry, whether you’re looking for a doctor, dentist, mechanic, lawyer, etc., it’s hard to find a good one. Your level of financial intelligence will help enormously in weeding out the good from the bad. The best part? Financial advice can be found online or at your local bookstore.

One of the better websites out there is www.investopedia.com. Whether you’re an experienced investor or a complete novice, this site has everything. Their “Tutorials” section is extremely well-written, and can teach you everything you need to know to get started. From bonds and mutual funds, to options and other derivatives, they make sense of the jargon that turns off so many people from the world of economics and finance.

After learning the basics, I highly recommend the book “The Naked Investor, Why Almost Everybody But You Gets Rich On Your RRSP” by John Lawrence Reynolds.

This book is to financial literacy what Buckley’s Mixture is to coughs and colds. It tastes awful, but it works. The Naked Investor will open your eyes to the investment industry in Canada, and is required reading for anyone, whether you want to be a DIY investor or not.

When it comes to your investments, a little knowledge can go a long way. Whether you choose to open a self-directed RRSP, or you just want to fully understand what your advisor is trying to sell you, the information is out there waiting.