Personal Financial Wellness

Joo, So-Hyun

doi:10.1007/978-0-387-75734-6_2

Cited by 171 publications

(213 citation statements)

References 18 publications

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“…In this paper we use Joo's definition of financial knowledge and several measures thereof: knowledge of retirement savings 3 , knowledge of financial products, financial general knowledge, mathematical knowledge, and a subjective assessment of participants' financial knowledge. Joo's (2008) model assumes that financial wellness is a component of personal wellbeing; comprising financial satisfaction, financial status, financial behavior, financial attitudes, and financial knowledge. Although Joo's (2008) model viewed financial wellness as a component of personal wellbeing, there is a causal link between financial wellness and personal wellbeing in our SEM implementation of her model.…”

Section: <>mentioning

confidence: 99%

“…Joo's (2008) model assumes that financial wellness is a component of personal wellbeing; comprising financial satisfaction, financial status, financial behavior, financial attitudes, and financial knowledge. Although Joo's (2008) model viewed financial wellness as a component of personal wellbeing, there is a causal link between financial wellness and personal wellbeing in our SEM implementation of her model. The reason for this is that we turned Joo's assumption into a testable hypothesis: if financial wellness is a component of personal wellbeing, then an increase in financial wellness can be associated with an increase in personal wellbeing.…”

Section: <>mentioning

confidence: 99%

“…Two further models were used; the unstructured model ( Figure 3) and the sequential model ( Figure 4). The unstructured model assumed that financial wellness is a composite measure of all the indicator variables used in Joo's (2008) model, but eliminated all the subcomponents. As with Joo's model, we turned the assumption that financial wellness is a component of personal wellbeing, into a testable hypothesis.…”

Section: <>mentioning

confidence: 99%

“…In this paper we use the term financial wellness as defined by Joo (2008) instead of the term financial wellbeing because financial wellbeing has been variously defined with a wide variation in scope. For example, Greninger et al (1996) used a Delphi study of financial planners and educators to produce a profile of financial wellbeing for a typical household, focussing on a range of financial ratios including liquidity, savings and household expenses derived from objective financial measures.…”

Section: Introductionmentioning

confidence: 99%

“…Following a Delphi study of education experts in the field, Prawitz and his colleagues settled on eight subjective items to form their measure. 2 In this article we follow Joo's (2008) proposed model and view personal financial wellness as an overarching concept that includes financial satisfaction, among other factors. It therefore follows that we consider financial satisfaction to be a dimension of financial wellness.…”

Section: Introductionmentioning

confidence: 99%

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The Relationship Between Personal Financial Wellness and Financial Wellbeing: A Structural Equation Modelling Approach

2013

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In this study we examined the construct of financial wellness and its relationship to personal wellbeing, with a focus on the role of financial literacy. We made gender comparisons using a structural equation modeling analysis with variables that measured personal wellbeing, financial satisfaction, financial status, financial behavior, financial attitude, and financial knowledge. The research indicates that males ranked higher in financial satisfaction and financial knowledge than females; on the other hand, females ranked higher in personal wellbeing than males. The model of financial wellness proposed by Joo (2008) was operationalized to examine three alternative structural models. The model that best fitted the data was the one where financial wellness was conceived as a set of relations between variables. The relationship of all the variables to personal wellbeing was mediated by financial satisfaction, with some gender differences: In females the main source of financial satisfaction was financial status; in males it was financial knowledge.

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confidence: 99%

Section: <>mentioning

confidence: 99%

Section: <>mentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The Relationship Between Personal Financial Wellness and Financial Wellbeing: A Structural Equation Modelling Approach

2013

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Psychological biases of individual investors and financial satisfaction

Sahi

2017

J of Consumer Behaviour

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Traditional finance theory is based on the principle of maximization of utility and explains how choices are made by rational people. Although the theory provides numerous insights, observation of actual behavior of people was seen to be different from what the theory predicted. The homo economicus is in reality a homo sapien who has emotions and beliefs that help to filter the content from his or her environment. These beliefs and preferences that arise due to cognitive limitations, presence of emotions, and various psychological motives guide or bias his or her decisions. Much literature states that the biases should be corrected as they negatively impact financial behaviour and individual's well‐being. However, evolutionary psychology considers biases as design features of human mind. Thus, biases are not always bad, as at times, these biases can help the individual investor to choose the best course of action from the multiple possibilities and enable committing the less costly mistakes, thereby helping the individual to achieve satisficing behaviour. This paper aims to explore the investor biases and see whether they are related to the financial satisfaction of the individuals. Financial satisfaction is the measure of satisfaction with one's financial situation. The results showed that overconfidence bias, reliance on expert bias, and self‐control bias have a positive and significant association with financial satisfaction levels. Association of a few other biases with financial satisfaction was also observed under certain control conditions. This study provides further insights on investor behavior and paves the way for various possibilities for future research.

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Investor confidence: Are you your own worst enemy?

Asaad

2020

Fin Plan Rev

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Are overconfident investors more apt to make risky choices, which could erode investor returns? With confidence levels that exceed knowledge levels, investors may unknowingly expose themselves to risk. This paper shows that in terms of investing, overconfidence is associated with increased optimism as well as additional risk-taking through focused investment strategies. Specifically, overconfident individuals are more likely to be overoptimistic about their individual performance as well as overall market performance; more likely to have confidence in market regulations; less likely to seek the advice of an adviser; more likely to trade on margin; more likely to trade commodities, futures, and options; and more likely to have whole life insurance. Overconfidence may help explain why investor returns are consistently lower than investment returns. These findings are particularly relevant for financial advisers, as they serve the important role of providing feedback and sharing in the decision process.

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Personal Financial Wellness

Cited by 171 publications

References 18 publications

The Relationship Between Personal Financial Wellness and Financial Wellbeing: A Structural Equation Modelling Approach

The Relationship Between Personal Financial Wellness and Financial Wellbeing: A Structural Equation Modelling Approach

Psychological biases of individual investors and financial satisfaction

Investor confidence: Are you your own worst enemy?

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