As you save for retirement, it’s not unusual to worry about making the wrong choices — investing in something you shouldn’t, incorrectly balancing your portfolio, or falling for financial double-talk. How can you prevent being taken for a financial ride?
Researchers at Linkoping University in Sweden tried to predict which consumers were at risk of being misled by bad financial messaging, which in their study they gave the not-very-academic description “pseudo-profound BS.” This is double-talk composed of vaguely related words that sound impressive and insightful but don’t mean anything. The study showed financial scammers also use a misleading way of communicating.
The conclusions drawn from the study may surprise some people. The scientists found that young men with relatively high incomes who overestimate their financial expertise were most at risk, while older women with lower incomes and less financial arrogance about their skill set were more astute about being scammed.
What’s more, previous research found that people who fall for financial shenanigans are less analytical and are also the type of people that fall victim to “fake news” and buy into conspiracy theories. Gustav Tingh, professor of economics at the university and one of the study authors said that the research helps identify who is more or less vulnerable to being misled by bad, scam, or phony financial communication.
