Thursday, October 3, 2013

3 Money Questions to Ask Your Dad

3 Money Questions to Ask Your Dad

Happy father and son enjoying themselves

Invest or save? Compared to younger men, guys in their golden years are better at sifting through financial data and making sound economic decisions, shows new research from Columbia University.

A young man’s brain is great at logic and solving new problems—processes that rely on fluid intelligence, explains study coauthor Ye Li, Ph.D. But older men possess more crystalized intelligence, or smarts based on experience, Li adds. And when it comes to money matters, your dad’s experience could trump your brainpower, the study finds.

Talk to your father when faced with these three types of financial dilemmas, Li’s research suggests.

Taking out loans. Older guys scored as much as 70 percent higher than young men on tests of debt literacy. That means they’re good at gauging the long-term risks and rewards of borrowing.

Applying for new credit cards. Again, a good grasp of debt literacy helps men your dad’s age better assess credit card risk and liability.

Hiring someone to manage your money. Older men were significantly better than young guys when it came to understanding compound interestor the way small gains and losses add up over time. Ask your pop to help you figure out the cost of fees or commissions before you hire a person (or firm) to invest your cash.

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