Grable, J. E., Britt, S. L. & Webb, F. J. (2008). Environmental and biopsychosocial profiling as a means for describing financial risk taking behavior. Financial Counseling and Planning, 19 (2), 3-18.
Brief Description: The study applied an intervention model of risky adolescent behavior to risky financial behaviors of adult money managers. The researchers explored the role of one’s level of affluence (referred to as the environmental profile) and his/her self-esteem and age (called the biopsychosocial profile) in financial risk-taking behavior. They found that one’s environmental profile had a positive effect on willingness to engage in risky behavior (risk tolerance) but had a negative effect on money mismanagement behavior. Older workers engaged in more money mismanagement. The study involved mostly women who were affluent and successful money managers.
Implications: Practitioners may find the assessment tools used in this study helpful in predicting risk tolerance and potentially risky financial behaviors. Older individuals who are not affluent may be at greatest risk for harmful money management behavior. Saving money and planning for retirement in one’s early career may help avoid circumstances that lead to negative financial behaviors as individuals get older.