Decisions on major financial issues such as employment, investment or savings and any choices involving risk and uncertainty were particularly prone to this effect and produced serious implications for individuals.
“Unrealistically optimistic financial expectations can lead to excessive levels of consumption and debt, as well as inadequate savings. This can also lead to excessive business entries and subsequent failures. The odds of starting a successful business are small, but being optimistic Always think they’ll have a shot and start businesses that fail,” Dawson said.
The study – “Looking on the (b)right side of life: cognitive ability and misguided financial expectations” – took data from a UK survey of over 36,000 households and looked at people’s expectations about their financial well-being and their Actual comparisons were made. financial result.
