Middle-income Americans tend to roll the dice when making decisions about their money, leading to expensive financial mistakes, according to a new survey.
About 67% of people with household annual income between $30,000 and $100,000 have made at least one “really bad financial decision,” according to a study released last Tuesday by the Consumer Federation of America and Primerica Inc. Those stumbles cost families an average $23,000.
Despite the hazards, less than half of those surveyed (45%) have turned to an investment adviser to help them manage their money.
Another 15% said that they use the Internet and television for investment information, while 17% “wouldn't seek any information or advice, and just make a decision,” according to the report .
Those in the middle class have seen their financial assets dwindle to an average $27,300 in 2010, from $37,000 in 2007. Yet their faltering financial prospects don't make them more attuned to money management.
“They'll spend weeks planning a vacation to Disney World, but when it comes to their financial future, they procrastinate,” John Addison Jr., Primerica's co-chief executive, told reporters at the National Press Club in Washington last Tuesday.
The sponsors of the study are shocked at the willingness of middle-income investors to go it alone.
“A strikingly high percentage of respondents in our survey said they wouldn't consult any information at all in making a decision,” said Stephen Brobeck, executive director of the Consumer Federation of America.
Urging discipline, he warned against taking out home mortgages, taking on too much credit card debt or making risky investments.
Source: Mark Schoeff Jr., Investment News
The information contained in this article does not constitute a recommendation, solicitation, or offer by D2 Capital Management, LLC or its affiliates to buy or sell any securities, futures, options or other financial instruments or provide any investment advice or service. D2, its clients, and its employees may or may not own any of the securities (or their derivatives) mentioned in this article.
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