Posts Tagged "psychology"

Poker chips

Is Betting on Fantasy Sports Addicting?

“The best adrenaline rush ever,” says one of the barrage of fantasy sports commercials broadcast into living rooms this football season.

An adrenaline rush is known to be a hallmark of addiction to other types of gambling, which can trigger the brain’s pleasure center much like the triggers in a drug addict’s brain, according to University of Cambridge psychologists.

Hundreds of thousands, perhaps millions, of Americans are playing fantasy football and other sports online for money. The Internet has made this so accessible that it could facilitate the rapid-fire betting associated with problematic gambling.

Playing fantasy sports is “as easy as ordering a pizza online … [or] texting your friends,” a relapsed gambler told the New York Times. He said he lost nearly $20,000 on football, tennis, and Japanese basketball. And losing is easy but the odds of winning are long: an investigation by the New York State attorney general found that 1 percent of players “receive the vast majority of the winnings” paid out by two prominent sports fantasy websites. …Learn More

Photo of happy teens

Don’t Worry About Money. Just Be Happy

The adage that money won’t buy happiness has been proved wrong – at least up to a point. One famous study found that one’s well-being increases as income rises, though the benefits subside around $75,000 per year.

But what about the reverse? Do people who are happy earn more money? Yes, say two British economists.

Their study in the Proceedings of the National Academy of Sciences concluded this after following American teenagers for a more than decade through the National Longitudinal Study of Adolescent Health. In 1994 and 1996, this survey asked high school students to react to statements like “You were happy” and “You felt hopeful about the future.” In a 2008 follow-up survey, when most of them were around age 30, they were asked how much money they were making.

People who reported having a happy adolescence earned about $3,400 more than the average gross income of all the survey respondents; the average was $34,642. However, the opposite effect was more consequential: young adults who had a “profoundly unhappy adolescence” were earning 30 percent less – equivalent to a $10,000 hit to their earning power. …Learn More

This Retiree Is a Lucky Dog

It would be even tougher for Sher Polvinale to get by solely on her late husband’s Social Security check of $1,700 per month if he had not bought a life insurance policy that has paid off their house.

Despite her meager financial circumstances, Polvinale’s retirement is rich in rewards.

This 69-year-old former payroll administrator for a construction company said she brings in $200,000 in annual donations for her non-profit, which cares for old, unwanted dogs that need expensive medical care and attention. One can’t help thinking, while watching the National Geographic video below about the retired dog sanctuary in her home, that many elderly people would be lucky to have such a place to live out their final years.

For financial or lifestyle reasons, not everyone settles into a full-blown retirement. Some people refuse to retire altogether, while others try out retirement only to resume working, perhaps in a part-time position. Polvinale’s is one of the myriad stories of how individuals adapt and recreate their lives as they ease into old age and detach from the hard-charging work world.

“I’m kind of an odd person,” said Polvinale, explaining what motivated her to establish the non-profit in 2006. She recalls telling her husband, Joe, who would die in 2008, “I can’t agonize over whether people are going to love their dog until the end of its life. I want to keep them until they die. That’s selfish but I want to know that they’re safe and loved for the rest of their lives.” …Learn More

Jared Diamond: Elderly Have “Low Status”

Celebrated scholar Jared Diamond doesn’t mince words in exploring “the low status of the elderly in the United States” in the above Ted video.

An obvious example is beer, which older people are known to buy and consume. Yet, Diamond asks, “When’s the last time you saw a beer ad that depicts smiling people 85 years old? Never.”

Diamond, who is himself closing in on 80, has developed many specialties – traditional societies, geography, evolutionary biology, and physiology (to name a few) – which give him license to paint with a broad brush, as he did in his Pulitzer Prize-winning, “Guns, Germs, and Steel: The Fates of Human Societies.”

His sobering lecture on the elderly ends on a positive note as he describes their gifts – wisdom, knowledge of history, and skills refined over decades – and how society might better use them.

But the neglect, isolation, and abandonment of the elderly, or worse, he explains, are not new. They were present in some early traditional societies that could not care for them or would not spare the resources to do so. The isolation of older Americans today, Diamond believes, is a direct consequence of the changes that have come to define modern societies: the elderly’s complete separation from the labor force in retirement, the geographic dispersion of families and friends, and technology.

Even Diamond admits to feelings of uselessness. He’s a whiz on the slide rule, the precursor to a calculator, but sometimes calls his son for assistance using his 41-button television remote. …Learn More

anxiety

Avoidance Comes with Financial Anxiety

Knowing how to budget or invest one’s retirement savings are useful skills. But managing money isn’t just about what you know – it’s also about how you feel.

That’s the gist of a handful of recent studies into a newly identified emotion known as financial anxiety. These early studies look at two things: 1) is financial anxiety real?; and 2) does it explain why people do things like avoiding money issues or going into debt to paper over their financial problems?

The evidence says yes to both questions.

A 2012 study established financial anxiety as an identifiable psychological condition that can be measured using a standard psychological test. The researchers gauged their subjects’ reaction times to pairs of words flashed on a computer screen – negative financial words (debt), positive financial words (jackpot), neutral financial words (bank), or anodyne control words (camp). The subjects were timed on how long it took to identify a word after an on-screen icon replaced one word in the pair.

When only the negative financial word was left on the screen, people with higher financial anxiety were slower to respond than when only the positive word was visible. The prevalence of longer delays for negative words suggests that most subjects had at least some financial anxiety. …Learn More

Planning for a Centenarian’s Life

Americans have been labeled everything from the Greatest Generation to Generations X, Y, and Z. Are you ready for the Centenarian Generation?

The number of 100-years-olds has roughly doubled over the past two decades to more than 67,000 – mostly women – and the U.S. Census Bureau predicts it will double again by 2030. Just think about the implication of living for a century: retirement at, say, 65 means 35 years of leisure.

This is unappealing to some, unaffordable to many, and it impacts us all.

“We’ve added these extra years of life so fast that culture hasn’t had a chance to catch up,” Laura Carstensen, director of Stanford University’s Center on Longevity, said during a panel discussion at a recent Milken Institute Global Conference in Los Angeles. The best use for a additional 20 or 30 years of life isn’t, she said, “just to make old age longer.”

Granted, the Milken panelists – all privileged and accomplished baby boomers – are removed from the financial and other challenges facing most older Americans. But they have thought deeply about longevity and its consequences.

The following is a summary of their musings on how we might adjust to the coming cultural tilt toward aging:

  • Young people need to be more engaged in the issue of increasing U.S. life expectancy, because it will affect Generation Z far more than it has today’s older population. To engage his son’s interest in the topic, Paul Irving, chairman of the Milken Institute’s Center for the Future of Aging, said he introduced the concept of 80-year marriages. “That started a conversation,” he said. …Learn More
Family photo

Black Americans’ Distrust of Finance

Redlining, subprime mortgages sold in minority and immigrant neighborhoods, higher interest rates on car loans – black Americans have reason to distrust the financial system.

This spills over into their retirement planning, specifically their relationships with financial planners and how much they save, concludes a study in The Journal of Personal Finance. Among the findings is that blacks and, to a lesser extent, Latinos have difficulty trusting planners.

Past research shows trust can play an important role in financial decisions. People who trust the stock market, for example, are more likely to invest in stocks. But black Americans start out with generally lower trust levels: nearly half reported “low trust,” compared with only about one-quarter of whites, according to the survey data used by three finance professors in their study last year.

The researchers then assessed whether trust levels affected two specific behaviors: hiring a financial planner and saving for retirement.

A lack of trust reduced the likelihood an individual will engage a planner by 18 percentage points, compared to individuals who tend to be more trusting. The surprising result was that blacks were actually more likely to hire a financial planner than were whites with similar incomes when the researchers controlled for trust – meaning the controls eliminated differences in behavior related to individual trust levels.

Another finding was that while blacks have less retirement savings than do white Americans of similar incomes, this difference virtually disappears when the analysis controls for the difference in their trust levels.

If black Americans could get past their inherent lack of trust and get good advice or good financial products things might be different, said one of the study’s authors, Terrance Martin, an assistant professor of finance at the University of Texas-Pan American in south Texas.

“You might see less of a difference between black households’ accumulated retirement saving relative to white households,” Martin said.Learn More

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