Aging Brain More Tolerant To Risk

November 13th, 2007  |  Published in Investing  |  2 Comments

As you grow older, your ability to tolerate the stresses of a bear market increase. That’s the main thrust of an article by Money and it’s both a benefit and a drawback. Neuroscience has shown that as you age, the amygdala, the part of the brain that signals fear and anger, starts to shrink. In fact, when shown disturbing images, those in their twenties are show brain waves that are three times as intense as those in their sixties and seventies.

What does this affect retirees? It means that your checks in balances may be out of sync as temptations aren’t kept in check by fears. Teaser rates on credit cards are considerably more tempting, riskier investments sound much better than they would twenty years ago, and your submission to impulses rank up there next to teenagers.

Who cares? You’ve lived a prudent life, why not splurge a little? Splurge all you want within your means but these changes in your brain also affect your ability to sniff out frauds and scams. Don’t answer a cold call, no matter how tempting or gauranteed it may sound. Find someone you can trust to bounce ideas off, get a trusted financial advisor to guide you through the chaff. Don’t let the scammers and charlatans take advantage of your good nature.

  

Responses

  1. Carnival of Personal Finance #127 - Wonders of the World | Moolanomy says:

    November 19th, 2007 at 10:07 am (#)

    […] Retirement Blog presents Aging Brain More Tolerant To Risk — This confirms my dad’s behavior. But the benefit is that old people don’t […]

  2. My mom has a braver brain than me | Money Relations - Finance and investment blog. says:

    November 23rd, 2007 at 8:38 am (#)

    […] What caught my eye this week was My Retirement Blog’s post about the Aging Brain More Tolerant to Risk. […]