MONEY Investing

Pigs Fly: Millennials Finally Embrace Stocks

Jeans with cash in pocket
Laurence Dutton—Getty Images

Young adults have been the most conservative investors since the Great Recession. But now they are cozying up to stocks at three times the pace of boomers.

What a difference a bull market makes. The Dow Jones industrial average is up 160% from its financial crisis low, and the latest research shows that young people are beginning to think that stocks might not be so ill advised after all.

Nearly half of older millennials (ages 25-36) say they are more interested in owning stocks than they were five years ago, according to a Global Investor Pulse survey from asset manager BlackRock. This may signal an important turnaround. Earlier research has shown that millennials, while good savers, have tended to view stocks as too risky.

In July, Bankrate.com found that workers under 30 are more likely than any other age group to choose cash as their favorite long-term investment, and that 39% say cash is the best place to keep money they won’t need for at least 10 years. In January, the UBS Investor Watch report concluded that millennials are “the most fiscally conservative generation since the Great Depression,” with the typical investment portfolio holding 52% in cash—double the cash held by the average investor.

This conservative nature has raised alarms among financial planners and policymakers. Cash holdings, especially in such a low-rate environment, have no hope of growing into a suitable retirement nest egg. In fact, cash accounts have been yielding less, often far less, than 1% the past five years and have produced a negative rate of return after factoring in inflation.

Conservative millennials, with 40 years or more to weather the stock market’s ups and downs, have been losing money by playing it safe while the stock market has turned $10,000 into $26,000 in less than six years. Yes, the market plunged before that. But in the last century a diversified basket of stocks including dividends has never lost money over a 20-year period—and often the gains have been more than 10% or 12% a year.

Millennials are giving stocks a look for a number of reasons:

  • The market rebound. The market plunge was scary. Millennials may have seen their parents lose a third of their net worth or more. But with few assets at the time, the market drop didn’t really hurt their own portfolio, and stocks’ sharp and relentless rise the past six years is their new context.
  • Saver’s mentality. Millennials struggle with student loans and other debts, but they are dedicated savers. They have seen first-hand how little their savings grow in low-yielding investments and they better understand that they need higher returns to offset the long-term erosion of pension benefits.
  • Optimism still reigns. Millennials are easily our most optimistic generation. At some level, a rising stock market simply suits their worldview.

This last point shows up in many polls, including the BlackRock survey. Only 24% of Americans believe the economy is improving—a share that rises to 32% looking just at millennials, BlackRock found. Likewise, millennials are more confident in the job market: 32% say it is improving, vs. 27% of Americans overall. Millennials are also more likely to say saving enough to retire is possible: only 37% say that saving while paying bills is “very hard,” vs. 43% of the overall population.

Looking at the stock market, 45% of millennials say they are more interested than they were five years ago. That compares with just 16% of boomers. Millennials also seem more engaged: They spend about seven hours a month reviewing their investments, vs. about four hours for boomers.

This is all great news. Millennials will need the superior long-term return of stocks to reach retirement security. Yet many of them are just coming around to this idea now, having missed most of the bull market. In the near term, they risk being late to the party and buying just ahead of another market downdraft. If that happens, they need to keep in mind that the market will rebound again, as it did out of the mouth of the Great Recession. They have many decades to wait out any slumps. They just need to commit and stay with a regular investment regimen.

Read next:

Schwab’s Pitch to Millennials: Talk to (Robot) Chuck
Millennials Are Flocking to 401(k)s in Record Numbers
Millennials Should Love It When Stocks Dive

MONEY Financial Planning

Here’s What Millennial Savers Still Haven’t Figured Out

Bank vault door
Lester Lefkowitz—Getty Images

Gen Y is taking saving seriously, a new survey shows. But they still don't know who to trust for financial advice.

The oldest millennials were toddlers in 1984, when a hit movie had even adults asking en masse “Who you gonna call?” Now this younger generation is asking the same question, though over a more real-world dilemma: where to get financial advice.

Millennials mistrust of financial institutions runs deep. One survey found they would rather go to the dentist than talk to a banker. They often turn to peers rather than a professional. One in four don’t trust anyone for sound money counseling, according to new research from Fidelity Investments.

Millennials’ most trusted source, Fidelity found, is their parents. A third look for financial advice at home, where at least they are confident that their own interests will be put first. Yet perhaps sensing that even Mom and Dad, to say nothing of peers, may have limited financial acumen, 39% of millennials say they worry about their financial future at least once a week.

Millennials aren’t necessarily looking for love in all the wrong places. Parents who have struggled with debt and budgets may have a lot of practical advice to offer. The school of hard knocks can be a valuable learning institution. And going it alone has gotten easier with things like auto enrollment and auto escalation of contributions, and defaulting to target-date funds in 401(k) plans.

Still, financial institutions increasingly understand that millennials are the next big wave of consumers and have their own views and needs as it relates to money. Bank branches are being re-envisioned as education centers. Mobile technology has surged front and center. There is a push to create the innovative investments millennials want to help change the world.

Eventually, millennials will build wealth and have to trust someone with their financial plan. They might start with the generally simple but competent information available at work through their 401(k) plan.

Clearly, today’s twentysomethings are taking this savings business seriously. Nearly half have begun saving, Fidelity found. Some 43% participate in a 401(k) plan and 23% have an IRA. Other surveys have found the generation to be even more committed to its financial future.

Transamerica Center for Retirement Studies found that 71% of millennials eligible for a 401(k) plan participate and that 70% of millennials began saving at an average age of 22. By way of comparison, Boomers started saving at an average age of 35. And more than half of millennials in the Fidelity survey said additional saving is a top priority. A lot of Boomers didn’t feel that way until they turned 50. They were too busy calling Ghostbusters.

MONEY mobile banking

How Millennials Will Change the Way You Bank

woman with iphone image of her mouth in front of her mouth
The mobile generation wants to do everything with pictures instead of words, including paying bills and depositing checks. Maciej Toporowicz—Getty Images/Flickr Select

Nearly all young adults carry a smartphone and prize the camera as its key feature — not just for selfies, but as a means to conduct their life without words.

If a picture is worth 1,000 words, soon we may not need words anymore. Nearly nine in 10 young adults are never without their smartphone, and a similar percentage say the camera function is among the most important features, new research shows. This love of the visual has broad implications for all businesses, perhaps most notably banking.

The youngest millennials have almost no memory of cell phones without cameras. They post pictures to avoid writing about events in their lives and snap photos as reminders to perform ordinary tasks. A third of all pictures taken are selfies, according to a report from Mitek Systems and polling firm Zogby Analytics.

This generation wants to do everything with a snapshot—from clicking a picture for online purchases to depositing money or paying a bill by snapping an image of a check or invoice. Four in five millennials say it is important for retailers to have a high quality mobile app; nearly nine in 10 either have or would deposit money in their bank with mobile technology, the report found.

“There is a substantial disconnect between what young people have come to expect and the often horrendous consumer experience they get with mobile,” says Scott Carter, chief marketing officer at Mitek. Banks have been among the slowest to respond, he says. About half of consumers who try to open a bank account online give up because it is so tedious, Carter says.

A bank that adopts more sweeping image technology such as facial recognition or fingerprint identification and uses it to replace passwords and the need to fill in account numbers would be a big winner—and not necessarily just with the younger set. Mobile banking is taking off with all generations. Only 12 million people used mobile banking services in 2009, according to Frost & Sullivan, a research firm. That number was expected to hit 45 million this year.

More than one in eight Americans have deposited a check within the past year using a mobile app, the American Bankers Association found. Of those, 80% use the app at least once a month. Other findings from the Mitek survey of millennials:

  • 34% have deposited a check by taking a picture
  • 54% would pay for goods using their smartphone as a mobile wallet instead of credit cards
  • 45% would pay a bill by taking a picture if the technology were available to them, vs. the 21% who do so now
  • 36% have switched where they do business based on a company’s mobile app
  • 60% believe that in the next five years everything will be done on mobile devices, much of it through images

We will never be a wordless society. But just think about those awful assembly instructions that come with a box of parts at IKEA or Target. If a YouTube video or other image makes it easier, why fight? A lot of people think of banking and personal finance the same way—and for them, a picture really is worth 1,000 words.

TIME 2016 Election

Elizabeth Warren and Suze Orman Call for Student Debt Reform

Democratic Senators Discuss College Affordability
U.S. Sen. Elizabeth Warren (D-MA) (2nd L) speaks as Senate Majority Whip Sen. Richard Durbin (D-IL) (L), and Sen. Patty Murray (D-WA) (R) listen during a news conference June 5, 2014 on Capitol Hill in Washington, D.C. Alex Wong—Getty Images

Warren didn't touch the question of whether she would run in 2016

Correction appended Sept. 17 at 2:40 p.m.

Senator Elizabeth Warren and personal finance expert Suze Orman teamed up Wednesday morning for a spirited, hour-long discussion about student loans, for-profit colleges and the staggering debt crisis facing tens of millions of Americans today.

The two women, who first met at a 2009 TIME 100 event, clearly saw eye-to-eye on nearly every issue, surprising absolutely no one, anywhere. They often echoed one another in their condemnation of “the biggest banks,” “the crooks” selling exploitative student loans, and corporate control over the lawmaking process.

“Washington works for those who have money and power, for those who can hire armies of lobbyists and lawyers,” Warren said.

“Private banks are financially raping—and I use that word truthfully—raping our children,” Orman said. “It’s ludicrous.”

The question of whether Warren will run for president in 2016 was defused right off the bat, when Orman jokingly announced her own candidacy. Warren remained silent on the issue throughout the panel discussion, hosted by Politico and Starbucks in downtown Washington, D.C., choosing instead to draw attention to her student loan reform bill, which was blocked by a Republican filibuster in June.

The bill would require the federal government and private banks to allow the roughly 25 million Americans, each of whom carry an average of $30,000 in student debt, to refinance their student loans at today’s lower interest rates. It would also cap undergraduate loans at interest rates below 4%. The current interest rate for federal Stafford student loans is as high as 8%; private loan rates often top 14%.

Warren and Orman argued that since Americans collectively carry more than $1.2 trillion in student debt alone—a sum that doesn’t take into account mortgages or other personal debt—they cannot buy houses or cars or make other purchases that would stimulate the economy. Senate Republicans blocked another effort to bring the bill to vote on Tuesday. Warren promised Wednesday to “keep hitting at” it this term.

Both Warren and Orman pointed out repeatedly that student loans, unlike any other type of loan, cannot be forgiven under any circumstances, including bankruptcy or death. Those carrying student debt through retirement “will have their social security garnished,” Orman said, as an appalled Warren echoed her: “Your social security check gets garnished!” Americans who die with student loans often pass on that debt to surviving family members.

One of the challenges in passing the student loan reform bill, Warren said, is that the U.S. government mades $66 billion between 2007 and 2012 off of the interest from federally-backed student loans. Her bill would reduce that profit substantially, but proposes making up the difference through a stipulation in the tax code requiring that those making more than a million dollars per year pay taxes at the same rate middle class families pay, she said.

Toward the end of the discussion, the moderators, Politico’s Mike Allen and Maggie Haberman, changed the topic to the upcoming 2014 and 2016 elections. Orman said that while she would vote for Hillary Clinton in 2016, she would much prefer to vote for Warren, who she described as her “political voice.” Warren smiled but didn’t respond.

Allen later asked Warren who her favorite Republican is, to which Warren quickly answered, much to the delight of the crowd, “Living or dead?” When Allen pressed her to come up with her favorite living Republican, Warren suggested Senator Bob Corker (R-Tenn.), who voted to advance debate of the student loan reform bill and is working on housing finance reform.

Allen later asked Warren what her reaction would be if Republicans win the majority in the Senate in November, and Mitch McConnell, who is facing a tight race in Kentucky, succeeds and rises to Senate majority leader. “I’ll be blunt,” Warren said. “I hope that he doesn’t come back.”

In one of the final questions, Haberman asked Warren which Republican she would like to see run in 2016. Warren just laughed. “No,” she said. “No.”

Correction: The original version of this story incorrectly said that Sen. Bob Corker voted for the loan reform bill. He voted to advance debate of the bill.

MONEY Financial Planning

Why Millennials Aren’t Getting Love from Financial Advisers

Financial advisers are aging and mostly targeting their peer group. Where can a dedicated Millennial saver get answers?

“Follow the money” was sage advice in All the President’s Men, and “show me the money” worked well enough for the characters in Jerry Maguire. Now financial advisers are taking the same approach in their pursuit of new clients.

A third say they aren’t interested in your business if you have less than $500,000 to invest and 57% want at least $250,000 in assets to get on the phone, according to a survey from Principal Financial Group. Okay. These are business people following the money in their quest for higher fees and more commissions.

Yet this approach pretty much ignores the next mega-generation—the 80 million Millennials, the oldest of which are now turning the corner on 30. Just 18% of financial advisers say they are prospecting in this demographic. Millennials don’t have a lot of assets at this point in their life, and 29% of advisers say this generation has little interest in their services because of the cost, Principal found. So why bother?

Well, anyone building a wealth management business for the long term might find plenty of gold in this group. Millennials are hell-bent on saving and investing long term, and providing for their own financial security. Eight in 10 Millennials say the recession convinced them they must save more now, according to the 2014 Wells Fargo Millennial Study. Meanwhile, the financial industry, banks in particular, have a long way to go win this generation’s trust. They might want to get started.

Most wealth advisers are focused on Baby Boomers (64%), high net worth clients (64%) and business owners (62%). For those willing to work with the less well-heeled—advisers who just getting started and willing to build a practice over time—these twenty-somethings offer a huge opportunity. One issue, though, is that there aren’t a lot of young wealth advisers out there. Like bus drivers and clergy, this profession has a slow replacement rate and is aging fast. Among the 300,000 or so full-time financial advisers, the average age is about 50, and 21% are over 60.

The result is an industry filled with people that largely do not relate to Millennials and do not care because they have so little to invest. At the same time, we have a generation that has got the message on saving and wants to get serious about investing for its financial future. So it’s not surprising that a growing number are turning instead to online financial advice firms—start-ups such as Betterment, Wealthfront and Personal Capital—to get investment guidance with little or no minimum and at lower cost. Millennials may be broke and fee averse. But they won’t be that way forever. This time, “show me the money” may be bad strategy.

MONEY Personal Finance

Money Know-How? American Teens Are, Well, Just Average

Students taking test in classroom
Roy Mehta—Getty Images

A major study shows that American 15-year-olds are barely average when it comes to knowledge of personal finance—and way behind the kids in Shanghai.

For a country whose grandest export might be capitalism, we don’t do very well with our own kids. American teens land smack in the middle of the pack when it comes to simple personal financial know-how, according to a groundbreaking new global study.

Topping the list are kids in Shanghai, Belgium, Estonia, Australia and New Zealand. Bringing up the bottom are teens in Colombia, Italy, Slovak Republic, and Israel. The U.S. rates just below Latvia and ahead of France.

These findings come in the newly released 2012 Program for International Student Assessment (PISA), a widely recognized comparative measure of student proficiency in 65 countries. In the past, PISA has focused on math, science, and reading. For the first time, in 2012 it added testing on personal financial concepts.

Only 18 countries opted into the financial literacy component, which is a statement all by itself. This is a relatively new field of education and most countries have little more than a fledgling effort. Some who take it seriously and have broad financial education programs, like Australia and New Zealand, scored relatively well. But Shanghai, which is not regarded as a leader, produced the best results of all.

The assessment looked specifically at 15-year-olds. Those in Shanghai had a mean score of 603—well ahead of second-place Belgium (541) and 9th-place U.S. (492). In last place was Colombia’s mean score of 379. PISA is part of the Organization for Economic Co-operation and Development (OECD).

The 2012 results, eagerly awaited in education circles (and especially in financial education circles), were a bust in at least one big way. The goal is to figure out how to raise the financial I.Q. of people around the world by starting early and teaching in classrooms about budgets, credit cards, saving and investing. Asked what seems to work best, Michael Davidson, head of schools at the OECD, said, “The easy answer is we don’t know.”

The strong scores in Shanghai correlate with strong math scores there, he noted. But in other countries, the highest scores correlated with simply having a bank account. In general, strong financial literacy scores were also highly correlated with students demonstrating problem-solving skills and perseverance. So it may be that the best approach is a focus on math, offering kids some exposure to real world financial decisions and cultivating their will to ask questions and not give up so quickly in all spheres of life.

Among U.S. students, the OECD found that:

  • A worse-than-average 17.8% do not reach even a baseline level of understanding about money concepts, meaning that at best such students will understand an invoice or the difference between a want and a need. They have little aptitude for even simple things like a basic budget or loan.
  • A nearly average 9.4% is a top performer, meaning they understand things like fees and transactions costs and can make financial decisions with no immediate benefit but which will be good for them in the long run.

These are discouraging numbers, especially when weighed against the results in Shanghai, where just 2% of 15-year-olds do not reach the baseline and 43% are top performers—and efforts at formal financial education there are way behind those in the U.S.. With numbers like these, it’s the Chinese in Shanghai that soon may be exporting capitalism.

TIME Financial Education

How We Can Fix the Economy and Save Capitalism

Bringing the underprivileged into the financial mainstream would do no less than save our way of life, argues the activist John Hope Bryant.

The civil rights battles of the 1960s changed the course of American history. But the fight isn’t over. It just has a new front: economic empowerment.

Vast segments of the population “never got the memo” on how to save, invest, find a great job, start a business, and otherwise operate in the realm of free enterprise, John Hope Bryant asserts in How the Poor Can Save Capitalism. An activist for bringing the poor into the financial mainstream, Bryant argues that those who fail to “understand the global language of money” are nothing more than “economic slaves.” So financial education “is a new civil rights issue.”

This isn’t an entirely new thought. After the civil war, President Lincoln established the Freedman’s Savings and Trust with the mission to teach newly freed black Americans about money. Even then, it was apparent that some ability for the poor to borrow at reasonable rates, save and earn a return was in their and the nation’s best interest.

But the Freedman Bank quickly failed through the mismanagement of politicians, and broad-based financial education is only now really beginning to catch on. Bryant describes how his own father missed the money memo. A concrete contractor, he would bid $1.50 for $1 of work and “ended his amazing career dead broke.” He knew about hard work; he just didn’t know how to translate that hard work into economic gain.

When we talk about financial education today we mostly think of teaching young people how and why to budget, manage their credit, shop wisely, live within their means, and begin saving immediately for retirement. They will come of age in a world without safety nets and must take saving seriously at an early age. It’s the surest way to get to financial security and it’s a simple point that I try to make as often as makes sense.

Bryant is on board for all that. It’s why he and his book are even on my radar. But he makes a point not often made: to the underprivileged, basic concepts like saving for retirement and managing credit wisely are of another world; this group just needs a bank account to avoid predatory check-cashing services, role models from the neighborhood to show them how to start and build a small enterprise, and a few modest money successes to build their confidence. This is financial education at a very basic level.

Globally, half of adults totaling some 2.5 billion do not have a formal bank account. This shuts them off from credit and savings opportunities that you may take for granted; it hinders their rise to a better life and squanders the potential to convert hundreds of millions of people from economic drains into economic contributors. Some 40 million of these unbanked are in the U.S., and by reaching them Bryant believes we can lift them out of poverty and resuscitate our moribund economy. His plan includes a variety of near-term tax and other incentives that, naturally, have a cost. But Bryant would ask: what’s it worth to save the economy?

Financial inclusion for the poor is not the same issue as financial education for all kids. But the two are closely linked. All young people should be exposed to money basics like, budgets, credit cards, college loans, compound growth and inflation. Over the past decade, a global movement has emerged pushing for just that. But before any of these lessons will make any sense to the very important underprivileged among us, these people must first be brought into the mainstream where they can secure micro loans at a reasonable rate and stop giving away what little they have to payday lenders. It’s the right thing to do, and if Bryant is right it will do nothing less than save capitalism.

 

 

MONEY

Closing Out Your Old 401(k)

Q: I got a check closing out my old 401(k). Can I add it to my new 401(k) without penalty? — Matt Gould, New Cumberland, Pa.

A: Yes, and act fast.

Unless you put the money in another retirement account within 60 days of receiving the check, you’ll owe taxes on the sum, plus a 10% early-withdrawal penalty if you’re not yet 59½, says John Piershale, a financial planner in Crystal Lake, III.

Related: Will you have enough to retire?

One hitch: The old plan usually withholds 20% of your account for taxes, so when you make the deposit you’ll have to use other cash to cover that 20% shortfall.

Assuming you get this done within 60 days, you’ll get the withheld money back at tax time.

If your new 401(k) plan doesn’t accept rollovers or will make you wait too long to deposit the funds, put the money in an IRA, advises Lancaster, Pa., planner Rick Rodgers. You can always move it into a 401(k) later.

TIME Personal Finance

Why Millennials Would Choose a Root Canal Over Listening to a Banker

Bank Investor Returns Seen Rising to Most Since 2007 on Test
Pedestrians walk past a Citigroup Inc. Citibank branch in New York, U.S., on Tuesday, March 5, 2013. The six largest U.S. banks may return almost $41 billion to investors in the next 12 months, the most since 2007, as regulators conclude firms have amassed enough capital to withstand another economic shock. Photographer: Victor J. Blue/Bloomberg via Getty Images Bloomberg—Bloomberg via Getty Images

Fed up with indifference, Millennials envision a bank-free existence.

It’s symbolically important that a dozen or so former bank buildings around the country—some road kill from the recession—have been turned into thriving nightclubs. The young adults who frequent these dens would tell you it’s a far better use of the space; they have little interest in banks, period.

You don’t have to look hard to find out why. Millennials have a whole new set of money issues that banks do not address in a relevant way: this generation is loaded with student debt that’s difficult to refinance; grossly underemployed without access to capital to start a business, or three; and hungry for financial guidance that isn’t self serving. Millennials also want to conduct their affairs on a smartphone, not go to a bank branch—ever.

This generation does things differently. Couples are quicker to mingle their financial accounts. They are more likely to piece together a career through four or five jobs. They share cars and apartments. They are ultra connected and enjoy teamwork and collaboration, and value experiences and meaningful employment above high pay. All this has huge and largely ignored implications for banks that just want to issue a mortgage, auto loan, or credit card. From the Millennials’ point of view, they don’t get it.

A third of Millennials say they will lead a bank-free lifestyle in the near future, according to new research from Scratch, an in-house unit of Viacom that consults with brands. Half of Millennials say they are counting on startup firms to overhaul how banks work, and 75% say they would prefer financial services from the likes of Google, Amazon, and PayPal. They expect technology companies to change the industry—not banks.

This is a thunderous warning shot for banks, which Millennials—our largest generation at around 80 million—see as a cookie cutter industry with little interest in innovation or differentiation. A third of young adults are ready to switch banks in the next 90 days; 53% say all banks are the same. Visiting a branch is like getting a root canal: 71% of Millennials would rather go to the dentist than listen to a bank’s message.

With numbers like that you might expect they’d also stay away from former bank buildings—just because. Then again, Millennials may find a level of catharsis partying in places like The Vault in Sacramento, Calif., (formerly Bank of Italy), Capitale in New York (formerly Bowery Savings bank), and Bond in Boston (formerly a Federal Reserve building). It feels a little like grave dancing.

“None of the big banks have made a public shift from selling credit to empowering human endeavor,” says Scratch executive vice president Ross Martin. He believes there is an opportunity for banks that can flip the switch. Millennials grew up believing they were special and could not be stopped. They’ve been pummeled by reality but yet retain a high level of confidence and optimism. According to Scratch research:

  • 73% of Millennials say when they decide to do something no one can stop them.
  • 80% say they are sure they will get what they want in life.
  • 82% own their future; saying when they fail at something it’s their fault—not someone else’s.

“This generation needs someone to bet on them,” says Martin. It’s not enough for a bank to be reliable, trustworthy, green, and community oriented. Bankers need innovative products and services that will help Millennials carve out their unique path to success. They need micro loans and a new way to assess creditworthiness that does not revolve around a single full-time employer. They need impartial counseling on how to save and invest. They’d flock to a bank that felt more like Starbucks or Apple than a hospital operating room.

Rethinking lending and other financial services presents an imposing challenge. Millennials rank the four largest banks among the 10 least loved brands in America, Scratch found. Says Martin: “We’ve never seen numbers like that.” So banks can either figure it out and capture this generation’s heart, or watch the kids dance on their grave.

 

TIME Personal Finance

This Quiz Showed Me Just How Cheap I Really Am

136147882
Getty Images

Maybe saving money at every turn isn't the right approach. Smart spending on your happiness and relationships provide much needed balance.

I’ve always known that I am cautious with money. I just didn’t know how cautious—possibly to a fault—until I spent a few minutes with a new online assessment tool Your Money Mind.

The tool centers on a seven-question quiz, and the goal is to determine what motivates your spending decisions. The answers fall into three categories: fear of making mistakes and hurting your long-term financial health; happiness derived from spending on things you want; and commitment demonstrated by spending in ways that enhance your relationships.

Ideally, you want some balance among the three. In taking the quiz a half-dozen times, however, I found a consistent and decided skew toward the fear factor. My primary goal, the quiz showed me, is to seek safety and security. Happiness clocked in second; commitment a distant third. Here are three typical questions that pulled back the curtain on my extreme frugality:

  • Your best friend is planning a wedding all the way in the Caribbean. Do you feel: excited about the adventure, frustrated because of the cost, or mixed but willing to go anywhere to support your friend? C’mon, man. Just stay in town.
  • You’re asked to buy a raffle ticket. Do you say: sure it’s for a good cause, no thanks I never win, or yes I am due for a big score? Sorry, I don’t play lotto either.
  • Your spouse wants to take up golf. Do you buy: a set of used clubs because this will never last, a new set of clubs for the both of you, or a new set plus private lessons just for your spouse? Honey, I love you. But there’s a brand new archery set collecting dust in the garage.

I don’t think of myself as cheap, or uncaring. But this game clearly does. Not that I’m taking it too seriously. A one-size-fits-all quiz is far from perfect. According to the assessment, I am “slow to make decisions and as result may miss opportunities.” Nonsense. I decided right away that the Caribbean wedding was a frustrating expense—but that, yes, I must go. And when it comes to really big expenses like buying a house there is no such thing as too slow. When you are ready, you are ready. If someone swoops in, so be it. Other houses will be there.

Still, I expect that this assessment of my money mind will alter my approach to financial decisions in some ways. It turns out that saving money isn’t the only thing that matters. Maybe I make too many personal sacrifices in the name of security. Maybe I over emphasize delayed gratification. Maybe I should, well, live a little. That’s what the quiz designers at United Capital Private Wealth Counseling concluded. They seem to be nudging me towards that African safari we’ve long dreamed about. But you know, I believe I’ll just think about that a while longer.

 

 

 

 

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