The Brigher Side of Financial Risk: Financial Risk Tolerance and Wealth

Journal of Family and Economic Issues, Vol. 24, No. 3, pp. 233-256, Fall 2003

Posted: 20 Jun 2005

Abstract

Investors who accept a greater degree of financial risk expect to benefit from higher returns and greater wealth over time. This study explores the relationship between net worth and net financial assets and risk tolerance using data from the 1998 Survey of Consumer Finances. Willingness to take financial risk is associated with a significantly higher net worth for the whole sample, and for samples within age groups. Risk tolerance among those over 65 is among the strongest predictors of a higher net worth.

Keywords: Risk tolerance, wealth accumulation, personal finance

JEL Classification: D31, D11, D12

Suggested Citation

Finke, Michael S. and Huston, Sandra J., The Brigher Side of Financial Risk: Financial Risk Tolerance and Wealth. Journal of Family and Economic Issues, Vol. 24, No. 3, pp. 233-256, Fall 2003, Available at SSRN: https://ssrn.com/abstract=744569

Michael S. Finke (Contact Author)

The American College ( email )

Bryn Mawr, PA 19010
United States

Sandra J. Huston

Texas Tech University ( email )

2500 Broadway
Lubbock, TX 79409
United States

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