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Using data from the 2001, 2004, and 2008 panels of the Survey of Income and Program Participation (SIPP), this research examines the characteristics of households that invested in rental real estate during the 2000s. Given the tumultuous real estate market during that decade, rental real estate investment was investigated during the early part of the housing market boom (2001), the height of the boom (2004), and after the market began to decline (2008). Results reveal relative stability with slight investment increases in rental real estate (4.57% in 2001 to 5.00% in 2004 to 5.08% in 2008), and several investor demographic and financial characteristics consistently associated with the investment decision. Evidence of potential over-reliance on real estate investment by some households indicates that financial planners should work to educate clients who invest, or are seeking to invest, in real estate. Education would emphasize that overweighting portfolios with real estate could be deleterious to client's wealth goals in times of slow rental or depreciating housing markets.

This study explored the relationship between financial literacy and the use of interest-only mortgages using data from the 2009 National Financial Capability Study (NFCS). A series of analyses were conducted to investigate characteristics associated with the use of an interest-only mortgage as a primary mortgage, as compared to fixed-rate mortgage and adjustable-rate mortgage (ARM) options. Consistent results indicate the individuals who incorrectly answered questions related to compound interest, mortgages, and diversification were more likely to be using an interest-only mortgage. Respondents with higher reported math skills were less likely to use an interest-only mortgage, whereas individuals with higher levels of financial confidence were more likely to be using one. These results reinforce concerns about a household's ability to understand and evaluate complex mortgage products.

Abstract Using the Certified Financial Planner (CFP) Board's definition of financial planning, this article evaluates the validity of the measures of financial planner use in publicly available datasets. A review [...]

Abstract This research extends previous literature on the relationship between financial literacy and financial advice seeking in three ways: (1) we examine financial planner use specifically within the context of [...]

One major financial decision a household faces is whether to use limited savings to prepay a mortgage or contribute to a tax-deferred retirement account (TDR), such as a 401(k) or an IRA. This paper mathematically models the tradeoff between these two saving methods using an expected utility constant relative risk aversion (CRRA) framework and then tests this model using data from the Survey of Consumer Finances (SCF). Advisors working with families to determine optimal saving strategies can use this model to help households decide whether to prepay a mortgage or contribute to a TDR. [ABSTRACT FROM AUTHOR]

This exploratory study employed quasi-experimental research methods to investigate the relationship between adult participation in a comprehensive workplace financial education program and changes in financial knowledge levels. Results revealed a positive association between participation in the education program and changes in financial knowledge levels, even when controlling for demographic and socioeconomic differences between the participant and non-participant groups. However, results did not support an association between perfect attendance in the program and changes in financial knowledge. Evidence from this study provides meaningful insight into the association between adult financial education and financial knowledge and offers guidance for the future development of effective comprehensive workplace financial education programs. [ABSTRACT FROM AUTHOR]

This study investigates the effectiveness of the Three Good Things positive psychology intervention within the personal finance domain. A randomized control-group pretest posttest experimental survey was designed to test variations of the Three Good Things exercise on happiness, financial satisfaction, and financial self-efficacy. Interventions included the traditional Three Good Things exercise, a Three Good Financial Things exercise, and a Three Financial Things exercise. The results from a sample of 993 Amazon MTurk workers, with data collected between December 2018 – January 2019, suggest that the Three Good Things exercise was the most effective in increasing happiness and showed similar increases in financial satisfaction as the domain specific exercises. Effects from the Three Good Things intervention were the only effects to endure over time. None of the interventions demonstrated an effect on financial self-efficacy. Overall, the results support further investigation into applying PPIs within the personal finance domain. [ABSTRACT FROM AUTHOR]

This study investigates the financial attributes, financial behaviors, financial‐advisor‐use beliefs, and investing characteristics associated with having used an automated investment solution (i.e., a robo‐advisor). Data are used from the 2015 National Financial Capability Study (both the State‐by‐State Survey and the Investor Survey) to investigate the use of robo‐advisors among 1,393 individuals with non‐retirement investment accounts. Multivariable results indicated that being younger, having low or midrange income, and having lower objective investment‐knowledge scores was positively associated with robo‐advisor use. This study provides important insight for policymakers, financial practitioners, and proprietors of robo‐advisors and other fintech products. [ABSTRACT FROM AUTHOR]

This study investigates how psychological characteristics influence saving behavior within a sample of 1,380 U.S. preretirees aged 50–70 from the Health and Retirement Study (HRS). Using the 3M Model of Motivation and Personality as a theoretical basis, structural equation model results revealed that financial self‐efficacy (FSE) directly explains saving behavior and is central to understanding the link between other psychological characteristics and the saving behavior of older adults. Through higher FSE, increased positive affect and reduced negative affect indirectly supported saving behavior. Moreover, the results revealed personality traits indirectly explained saving behavior. Conscientiousness and extroversion indirectly supported saving behavior; whereas openness to experience and neuroticism indirectly undermined saving behavior. This study connects broad personality traits with saving behavior, which provides information about how older adults' psychological composition is related to their saving practices. [ABSTRACT FROM AUTHOR]

Financial self-efficacy (FSE) is a psychological trait that has significant influence over a wide array of financial behavior—from credit market participation to saving and investing behavior. Research has provided consistent evidence that suggests higher FSE supports prudent and growth-oriented financial behavior across a variety of samples. For older adults, FSE has been shown to be weak and susceptible to decline, which is concerning because older adults need to save significantly for retirement, with little time to do so. While research has provided some insight into the sociodemographic and economic factors related to FSE (e.g., income), little is understood about the psychological factors that contribute to FSE levels. Consequently, the authors investigate how psychological characteristics shape FSE within a sample of 2,068 U.S. preretirees from the Health and Retirement Study. Results revealed that FSE can be supported through frequent positive affect, reduced negative affect, stronger mastery beliefs, and a higher task orientation. With this knowledge, financial professionals can more effectively help support older preretirees' FSE and ultimately, their ability to prepare financially for retirement. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between financial self-efficacy (FSE) and saving behavior within a sample of 847 U.S. pre-retirees aged 50 to 70 from the Health and Retirement Study. In accordance with the social cognitive theory of self-regulation, results revealed that FSE is positively related to saving behavior after controlling for sociodemographic attributes, financial characteristics, and saving motives. Understanding how FSE contributes to saving behavior is critical as older workers attempt to bridge the retirement saving gap. Financial counselors and planners can help this population save by cultivating and supporting clients' FSE throughout the financial planning and counseling process. [ABSTRACT FROM AUTHOR]

US households face various choices in saving for retirement, with one of the most common decisions related to maintaining or paying off a mortgage. Using the 2010 and 2013 Survey of Consumer Finances, this study investigates the relationship between financial sophistication and mortgage decisions among middle-age households. A Heckman two-stage selection model is employed to investigate two separate decisions: mortgage holding and loan-to-value (LTV) ratios among mortgage holders. Results indicate that financial sophistication is positively associated with carrying a mortgage and higher LTV ratios. These results imply that financially sophisticated households may be using leverage to increase asset returns. [ABSTRACT FROM AUTHOR]

This study investigated the association between positive psychological attributes and retirement satisfaction using a sample of 5,146 retired individuals from the 2006 and 2008 waves of the Health and Retirement Study (HRS). Utilizing Seligman's (2012) well-being theory, positive psychological attributes, as represented by the acronym PERMA, were measured by dispositional optimism (Positive emotion), reading the newspaper daily and having a hobby (Engagement), family support (Positive relationships), purpose in life and religiosity (Meaning), and perceived mastery (Accomplishment). Significant evidence was found supporting the association between positive psychological attributes and retirement satisfaction. Specifically, results of the ordinal logistic model revealed that, holding all else constant, dispositional optimism, family support, purpose in life, and perceived mastery were each positively associated with retirement satisfaction. Relevant implications for financial planners, counselors and educators include learning and developing optimism, cultivating family relationships, fostering purpose in life, discovering accomplishment during retirement, and structuring a phased transition to retirement. [ABSTRACT FROM AUTHOR]

Purpose -- The purpose of this research was to explore the growth of Home Equity Conversion Mortgage (HECM) fraud and the role of housing counselors in its identification and prevention. HECMs are the Federal Housing Administration endorsed version of a reverse mortgage and represent the majority of reverse mortgages on the market. Design/methodology/approach -- To investigate HECM counselor's training, and their ability to detect fraudulent activity, a survey was constructed and distributed nationwide using HUD's publicly available roster of qualified agencies and counselors. The survey consisted of three main sections agency and respondent information including HECM certification process, typical interactions with clients, and mortgage fraud and HECM fraud. Findings -- Responses indicate that HECM counselors have limited awareness of and training in identifying fraudulent activities. Originality/value -- The case is made that additional training is needed to raise awareness among counselors so that they might better serve their clients. Given the sizable population that may legitimately need HECMs, it is important to improve awareness and provide training to detect fraudulent schemes and prevent this type of deception from occurring. [ABSTRACT FROM AUTHOR]