How to ensure you keep investment savvy as you age
It can take the average person years, if not decades, to learn (if ever) how to save, invest, minimise taxes and enjoy a measure of financial independence. Yet in a new study out of Texas Tech University in the States, Dr Michael Finke and his colleagues reveal that financial literacy actually worsens as we get older. The study shows that knowledge of basic concepts essential to effective money management declines by about 2% each year after age 60. Read on to find out how you can keep investment savvy as you age…
Interestingly, the study showed that confidence in financial decision-making abilities does not fall, Alexander Green in Investment U
That means folks who live to age 90 are, on average, only half as smart about money as they were at age 60, but they are no less confident about investing it.
Talk about a recipe for disaster. After all, the financial markets punish overconfidence.
Many financial products are generally complicated. So full of caveats, drawbacks, and hidden fees and penalties - that even people in the industry, including the majority of those who sell them, don't fully understand them.
You need to ensure you embrace the financial knowledge around you
Knowledge is indeed power. And financial literacy is a lifelong endeavour.
That means you should do everything you can to make sure you know as much as you can about how to boost your savings, reduce your taxes, minimise your investment costs and achieve your financial goals with as little risk as possible.
This means you need to do everything you can from reading the handful of classic investment books to learning essential money-management principles.
So there you have it, how you can keep investment savvy as you age.