Adults Make Riskier, More Inconsistent Decisions As They Get Older, Study Finds 225
schliz writes "People aged over 65 make poorer financial decisions and more inconsistent choices than younger individuals with the same IQ, an international research group has found. The study (abstract) had 135 healthy participants aged 12-90 make a series of decisions: for example, choosing between gaining $5 and the chance to win $20 in a lottery. On average, over-65s earned 26-39% less than all other age groups, including adolescents — a finding that could partially explain their susceptibility to problem gambling and scams."
Re:They've got money to burn (Score:5, Interesting)
"On average, over-65s earned 26-39% less than all other age groups, including adolescents — a finding that could partially explain their susceptibility to problem gambling and scams."
Might this have something to do with the fact that age discrimination is ripe in the workplace. Try landing a well-paying corporate gig if you are over 60, no matter your skill set. It's nigh impossible. And, with decreasing job opportunities for workers over 60, one can imagine that some significant minority of them become more desperate to the point where they begin to consider irrational alternatives to making ends meet. Of course, this doesn't eliminate the fact that very senior individuals - some with excess money to burn, use that money to fill the ever-increasing, yawning gap of boredom and disconnection in their lives brought on by the social isolation of the elderly in our culture. So, I think this is more of a structural problem.
Re:They've got money to burn (Score:5, Interesting)
My (german) grandmother has advanced alzheimer's, and is has reverted pretty much to her childhood. On a good day, she's in her 20's (which covers the period from 1939-1945). She has been known to wax poetical about Hitler, and has interesting ideas about homosexuals, gypsies, and the jews.
I still visit her. I leave my girlfriend at home when I visit her, and smile politely when she tries to introduce me to men she knows (knew back then). One time, she tried to hook me up with my uncle. At family events, my GF is "a good friend who didn't have anybody to visit" for the benefit of my grandmother. You may choose to sweep the elderly under the rug, I choose not to. We can still be compassionate in how we treat them, and there are constructive ways to deal with people who hold beliefs that we disagree with.
Cognitive Biases (Score:5, Interesting)
This sort of thing is in the general class of cognitive biases. Another example of this class is the Dunning Kruger effect.
Cognitive biases have a large negative effect on the financial performance of the general public. In particular if you want to be a successful investor it's very important to be aware of this issue.
Daniel Kahneman (a psychologist) won the 2002 Nobel Memorial Prize in Economics because of his pioneering work in the field of Behavioral Economics.
http://en.wikipedia.org/wiki/Daniel_Kahneman [wikipedia.org]
Re:They've got money to burn (Score:5, Interesting)
The study says fogies prefer less risk.
Not quite. The study found that geezers are less willing to take a risk to win, but more willing to take risks to avoid a loss. In many cases they were avoiding good risks and taking bad risks. Overall, they were making worse decisions than younger people when either accepting or declining risks.
Re:They've got money to burn (Score:5, Interesting)
The Rising Age Gap in Economic Well-Being [pewsocialtrends.org]
As per their training, the old think they're poor . That's why they have zero hesitation imposing whatever burdens they're told they deserve on whomever they're told can afford to pay.
There is nothing to worry about. Today. The regime is secure and the bennies will flow.
Right up until the currency folds.
Then the cutbacks; the PIIGS found out what that's about.
None of this is real. The whole damn nation is one giant ponzi scheme of vote buying, and it has a expiration date.
Old fogey hatred (Score:5, Interesting)
As a person on the tail end of the boomer generation, I saved a lot of money from my paychecks, I retired at 56, and am living quite comfortably.
We get surely a lot of hate. We're Selfish, entitled, and now foolish. Bloody fucking hell - I don't even collect SS for many years yet. I am not costing you poor abused, persecuted, and robbed of your entitlement everyone elses a damn thing, You want my fucking bank account or something?
Perhaps a different perspective is in order.
I started my career, back in the 70's, and immediately began saving. Pretty conservative investments. A lot of people I worked with at the time said that was pretty stupid. I had people making 3, 4 times as much who saved nothing, Whatever.
Young people have their chance to do the same as long as they have a job . But many don't want to. Just like many of the folks I worked with way back then. Right now interest rates are not that good. But history shows they will eventually go back up. Inflation was the big excuse not to save when I was young. Now it's interest rates. Ignore that. Save. You'll be an idiot for a few years. After that, not so much.
Now for a dose ot truth.
We are at the point, where people who haven't planned well, or people who don't really intend to plan well, resent and hate those who did. But if you are successful in your efforts to make those of us who did plan well poorer, that will not make you wealthy. You'll still be poor, you'll just have more company.
So if you really really gotta hate on us, go ahead. Tha'ts the only thing you'll have though - your hate, and the prospect of trying to live on Social Security. Save your money - no one owes you anything.