Optimism is too easy to be foolish

Optimists often make financial decisions more wisely than others, but if they're too optimistic, he'll either invest or venture, and thus save less money, a study has just revealed.

Manju Puri and David Robinson, professor of finance at Duke University in North Carolina, USA, compared statistics with expectations in life set by people to determine the level of optimism of all people.

Overall, they used data about US families, collected in 1995, 1998 and 2001 in the US Federal Reserve's Income Survey. The survey carried out on about 4,500 people who are often repeated every 3 years. Those who hope to live longer than average statistics are classified as " optimistic ". Those who expect to live longer than the average age for about 20 years are classified as " extremely optimistic ".

The team found that, in terms of regulating ability, optimists can make rational decisions, but the extremely optimistic group "reveals habits of money and behaviors that are generally not considered wise ".

When compared to others, optimistic people:

- Work more time
- Investing in personal capital
- Save more money
- Usually balancing the revenue and expenditure in the account
- Believe that your income will grow in the next 5 years
- Plan to retire later, or not completely off
- Like to remarry if divorced

And those who are extremely optimistic:

- Working less than a few hours
- Have a higher ratio of individual investment in the portfolio
- Easy to become day traders
- Save less money
- Less capable of balancing accounts according to common regulations
- Easier to smoke cigarettes

"The difference between optimistic and extremely optimistic people is significant and shows that excessive optimism, like overconfidence, can lead to foolish behaviors , " the study author said.

The team also likened optimism like red wine. "The doctor told us to drink two glasses of red wine every day that could be good for health. But no one advised us to drink the whole bottle. The same is optimistic. A bit is very beneficial, but too much can lead bad financial decisions ".

Thuan An