Cognitive declines + increased confidence = financial mistakes
May 11, 2016 by Kirsten Beckman
As people age, they experience a toxic combination of decliningf inancial literacy and increasing self-confidence. So says a new study conducted by researchers at the University of Missouri and Texas Tech University.
Cognitive declines are inevitable in advancing age, but the study demonstrates that those declines also apply to financial decision making. Coupled with stronger self-confidence, these declines often lead to financial mistakes and vulnerability to fraud, said the study.
The high-profile drama surrounding businessman and media magnate Sumner Redstone provides a vivid illustration of how cognitive declines experienced with advancing age can impact finances, said John Howe, professor and chairman of the Department of Finance at the University of Missouri’s Trulaske College of Business. Redstone is currently embroiled in high-profile legal battles that involve his daughter, a purported love interest, the fate of his $42 billion empire and questions about his mental competency at 92 years old. Click HERE to read more…
