With Age Comes Wisdom, Science Has Proved It.
I think we all know the frustration of getting older when it comes to learning new stuff and remembering where you put your glasses. But now we know there is an up side too. Lead Scientist Dr Ye Li, of California University in Riverside and his associates have proved that although older people's brains slow down, experience and knowledge more than make up for it - helping them make better financial decisions.
You see there are two types of smarts in this world one called fluid which is the ability to learn and process and the other is crystallized which refers to what we draw from accumulated experiences and knowledge.
The study performed a series of economic tests found the older group of 163 participants aged 60 to 82 were wiser than the 173 younger counterparts of 18 to 29. When it came to the topics of:
- temporal discounting' (how much people discount future gains and losses),
- loss aversion (how much the valuation of losses outweigh gains of the same magnitude),
- financial literacy (understanding financial information and decisions)
- debt literacy (understanding debt contracts and interest rates).
The older group also showed greater patience and better financial and debt understanding. Confirming that experience and acquired knowledge from a lifetime of decision making offset the declining ability to learn new information.’