Financial literacy education for the modern era.
The BigThree
Developed by economists Annamaria Lusardi and Olivia Mitchell, these three questions have become the global standard for measuring financial literacy. They test understanding of compound interest, inflation, and risk diversification.
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?
About the Big Three
Origins
The Big Three questions were developed by Annamaria Lusardi (Stanford University) and Olivia Mitchell (Wharton School) and first published in 2008. They have since been used in national surveys across more than 20 countries.
Why These Questions
These three concepts, compound interest, inflation, and diversification, form the foundation of sound financial decision-making. Research shows that people who answer all three correctly are more likely to plan for retirement and accumulate wealth.
Global Impact
The Big Three has revealed that financial illiteracy is a global phenomenon. Even in countries with advanced economies, significant portions of the population struggle with these fundamental concepts.
Why It Matters
Financial literacy correlates with better financial outcomes: less debt, more savings, better investment returns, and greater retirement preparedness. Understanding these concepts is the first step toward financial well-being.
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