A common believe is that as one gets older they get wiser and make better decisions, however this does not seem to hold true for financial decisions of those past the age of fifty-three. Young people are often known for making bad financial decisions such as excessive borrowing, spending tremendous amount of money on cars, saving too little or not saving at all, and living beyond their means. However, a new study by Sumit Agarwal & co shows that individuals older then fifty-three make more costly financial mistakes.
The economists looked at 10 financial decisions facing people between the ages of 25-75 years, including credit card balance transfer, borrowing through home equity loans and borrowing through home equity lines of credit.
What they found was that those over the age of fifty-three consistently made mistakes that would cost them more money than the middle-aged individuals. The group concludes that making financial decisions follows a U-shaped pattern.
Of course, there are exceptions to the rule – just think of Warren Buffet a multi-billionaire, living a frugal life well passed fifty-three and still making sound financial decisions.
What Can You Do to Avoid These Mistakes?
By mid 50’s you should have accumulated a substantial amount of wealth and will be nearing retirement, costly mistakes should be avoided and wealth preservation should be a priority. But given the findings chances are you may be past your prime when it comes to financial decisions, what can you do to avoid these mistakes?
1. Stay Up to Date
Keep yourself updated with the economic and financial trends. Subscribe to leading financial news sources and journals.
2. Keep Up With Technology
We live in a very rapid moving world and so much is dependent on technology, try to keep up with new relevant technology that can help you with financial decisions.
3. Attend Conferences
If possible try to attend financial conferences; this is where industry leaders often discuss new trends and upcoming changes in the industry.
4. Research Before Deciding
Take time to research your options and discuss with others. The financial industry is always changing; taking some time to research can help you make better decisions.