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Our financial smarts erode quickly after age 60
Old 10-27-2011, 08:16 AM   #1
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Our financial smarts erode quickly after age 60

Interesting article and a 10 question quiz. I think most everyone here should do quite well on this test! I missed question 4 with a SWAG.

Our financial smarts erode quickly after age 60 - Robert Powell - MarketWatch
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Old 10-27-2011, 08:23 AM   #2
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100% - - You had me worried, since I am 63 and was over 60 before I retired.
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Old 10-27-2011, 08:28 AM   #3
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Originally Posted by veremchuka View Post
Interesting article and a 10 question quiz. I think most everyone here should do quite well on this test! I missed question 4 with a SWAG.

Our financial smarts erode quickly after age 60 - Robert Powell - MarketWatch
Got fooled as well by #4. But thanks for making me feel younger.
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Old 10-27-2011, 08:28 AM   #4
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I'm 63, but still scored 100%.

My age probably helped since a lot of the "stuff" I've been exposed to many years, quite unlike a much younger person.

IMHO, it has more to do with financial literacy rather than age.
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Old 10-27-2011, 08:46 AM   #5
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No erosion here - I answered all 11 questions correctly.
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Old 10-27-2011, 08:53 AM   #6
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No erosion here - I answered all 11 questions correctly.
Same here, I do admit to some problem with #11.
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Old 10-27-2011, 08:57 AM   #7
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Got 100%... but then again I am not yet 60


But some of the questions are bad... like the auto loan... the question should have stated 'all else being equal'.... without that, get the one with the lowest interest... OR, pay cash and don't pay interest..
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Old 10-27-2011, 09:01 AM   #8
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100% but wasn't that quiz on "Are you smarter than a 5-year-old"?
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Old 10-27-2011, 09:03 AM   #9
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I'm 62 and got #4 wrong. Since I have no need for another mortgage, I'm good with it.
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Old 10-27-2011, 09:05 AM   #10
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Feeling pretty good...100% @ 60 so I have a little leeway 'til I turn 80.
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Old 10-27-2011, 09:06 AM   #11
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No erosion here - I answered all 11 questions correctly.


I missed #4. Probably because I haven't taken out a mortgage in 20 years, and was never interested in getting the biggest loan amount I could anyway.

Looking at the age profile against results, it looks like the 70-74 group got only slightly worse results than the 25-29 group.
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Old 10-27-2011, 09:17 AM   #12
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Well, that was fun and only 10 questions. My mind didn't wander to far even though I have already entered into my early years of geezerhood. I was a little apprehensive since I am not as knowledable as most on the forum yet managed to score 100%. Even so I am working on simplifying our investments for auto-pilot when the day comes and I am either having flashbacks, living on the other side of the looking glass, or not around to take care of the love of my life.

Cheers!
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Old 10-27-2011, 09:33 AM   #13
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I went back & forth on #4 (this was before I saw others missed it), and got it 'wrong'. Got all others marked correct.

I'm not so sure we are wrong, I think the correct answer is 'it depends'. IIRC, the reason people were taking adj rate mortgages was because the lower initial payment qualified them for a larger loan. The idea was that your income would rise in following years and any higher rate could be handled OK. I'm not saying that was sound reasoning, but I'm pretty sure that's the way it was.

The logic that a fixed rate removes variables and should qualify you for a larger loan makes sense to me. But I just don't think it was working that way. So maybe older people remember this?

-ERD50
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Old 10-27-2011, 09:42 AM   #14
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I went back & forth on #4 (this was before I saw others missed it), and got it 'wrong'. Got all others marked correct.

I'm not so sure we are wrong, I think the correct answer is 'it depends'. IIRC, the reason people were taking adj rate mortgages was because the lower initial payment qualified them for a larger loan. The idea was that your income would rise in following years and any higher rate could be handled OK. I'm not saying that was sound reasoning, but I'm pretty sure that's the way it was.

The logic that a fixed rate removes variables and should qualify you for a larger loan makes sense to me. But I just don't think it was working that way. So maybe older people remember this?

-ERD50
I understood the question as specific to someone with little credit history so lower credit score and higher rate. An adjustable loan allows the borrower to improve the credit score over the first couple of years and convert it to fixed under better terms. This assumes "all other tings beign equal" over the entire 5 years, especially all rates.
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Old 10-27-2011, 09:49 AM   #15
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These have nothing to do with financial acumen, but rather how well you have learned your financial catechism. Most of them are definitely TBD in each historical situation.

Ha
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Old 10-27-2011, 09:50 AM   #16
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I went back & forth on #4 (this was before I saw others missed it), and got it 'wrong'. Got all others marked correct.

I'm not so sure we are wrong, I think the correct answer is 'it depends'. IIRC, the reason people were taking adj rate mortgages was because the lower initial payment qualified them for a larger loan. The idea was that your income would rise in following years and any higher rate could be handled OK. I'm not saying that was sound reasoning, but I'm pretty sure that's the way it was.

The logic that a fixed rate removes variables and should qualify you for a larger loan makes sense to me. But I just don't think it was working that way. So maybe older people remember this?

-ERD50

My thinking is different than Michael's....

Banks are stupid... they only look at 'can you pay this monthly payment'... who cares about 3 or 5 years from now... and 20 years from now nobody here will be around.... if you can't make it then, that is their problem...
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Old 10-27-2011, 09:54 AM   #17
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I went back & forth on #4 (this was before I saw others missed it), and got it 'wrong'. Got all others marked correct.

I'm not so sure we are wrong, I think the correct answer is 'it depends'. IIRC, the reason people were taking adj rate mortgages was because the lower initial payment qualified them for a larger loan. The idea was that your income would rise in following years and any higher rate could be handled OK. I'm not saying that was sound reasoning, but I'm pretty sure that's the way it was.

The logic that a fixed rate removes variables and should qualify you for a larger loan makes sense to me. But I just don't think it was working that way. So maybe older people remember this?

-ERD50
I reread the question and think that the above (my bold) may be the logic behind the "correct" answer. Agree it is confusing - especially for us with age-related declining mental function.
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Old 10-27-2011, 09:59 AM   #18
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100%. Not sixty yet, but I grew up in the sixties...
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Old 10-27-2011, 10:01 AM   #19
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Age 60/100%, they should have graded on the curve for the others who did so badly.
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Old 10-27-2011, 10:04 AM   #20
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What questions?
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