outcomes and lifestyle, including being financially secure in retirement. Surveys show that being financially literate can help provide the following:
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For women, this can have a great impact on financial independence and future success. Studies show that almost all women who have a spouse/partner manage all aspects of their money. 94% say they manage their household finances, investments, and retirement planning.
Right Brain, Left Brain
Once you learn the fundamentals of financial literacy, consider one other important thing – your emotions. Psychology and your subsequent behavior turn out to be a very important parts of financial outcomes and how you manage your money. Take for instance the concept of “loss aversion” bias – the idea that you will be driven twice as much to avoid loss than you will to seek a gain. This can help explain why you may be inclined to sell when the markets are declining (to avoid an even bigger loss) or why you keep long term investments in low earning cash. Your emotions also play a big role when it comes to how you think about your future and planning your retirement.
Covid Conundrum
The psychological stress and existential crisis caused by the pandemic is a key factor why there were 2.4 million early retirements in 2021 – people wanted to make memories, not money.
Photo Credit Sasun Bughdaryan