"People would rather commit suicide than learn arithmetic." -- Bertrand Russell.
"There are three kinds of people; those who can count and those who can't." -- Robert G. Allen
Numeracy is to numbers as literacy is to words. To succeed with money, it helps to understand numbers, to be able to deal with them and manipulate them, to use them to better understand certain important aspects of the world we live in, to use them to assess risk, and to use them to better predict the future.
If you haven't mastered addition, subtraction, multiplication, division, fractions, decimals, percentages, etc., I suggest you start with Maths Matters! and Maths.
For an overview of numeracy, see Numeracy and Adult Numeracy Down Under.
Understanding and appreciating PROBABILITIES is one of the most important skills, not only for succeeding with money, but in life generally. Says John Allen Paulos in his book Innumeracy: Mathematical Illiteracy and Its Consequences:
"And if you don't have some feeling for probabilities, automobile accidents might seem a relatively minor problem of local travel, whereas being killed by terrorists might seem to be a major risk when going overseas. As often observed, however, the 45,000 people killed annually on American roads are approximately equal in number to all American dead in the Vietnam War. On the other hand, the seventeen Americans killed by terrorists in 1985 were among the 28 million of us who traveled abroad that year -- that's one chance in 1.6 million of becoming a victim. Compare that with these annual rates in the United States: one chance in 68,000 of choking to death; one chance in 75,000 of dying in a bicycle crash; one chance in 20,000 of drowning; and one chance in only 5,300 of dying in a car crash."
Many money decisions -- which stock to buy, which money program to join, how much money to commit to the stock or program, etc. -- can be good or bad, depending on your ability to estimate risk and probabilities. According to Peter L. Bernstein, in his classic Against the Gods: The Remarkable Story of Risk:
"The revolutionary idea that defines the boundary between modern times and the past is the mastery of risk: the notion that the future is more than a whim of the gods and that men and women are not passive before nature. Until human beings discovered a way across that boundary, the future was a mirror of the past or the murky domain of oracles and soothsayers who held a monopoly of anticipated events.
This book tells the story of a group of thinkers whose remarkable vision revealed how to put the future at the service of the present. By showing the world how to understand risk, measure it, and weigh its consequences, they converted risk-taking into one of the prime catalysts that drives modern Western society. Like Prometheus, they defied the gods and probed the darkness in search of the light that converted the future from an enemy into an opportunity. The transformation in attitudes toward risk management unleashed by their achievements has channeled the human passion for games and wagering into economic growth, improved quality of life, and technological progress."
