Financial Confidence

A pattern emerges
The confidence curve we found was based on
data from people who had just joined LearnVest.
Our group of respondents was 65% female,
from across the United States (with the heaviest
concentration from the east and west coasts) and
45% are married or partnered.
In order to mitigate the impact our somewhat
skewed demographic had on our analysis, we
explored similar research to understand the
broader context of the U-curve. We discovered
that the trend revealed in our own data is
also in line with the work of certain behavioral
economists, who have noted similar trends in
researching happiness. A study out of Dartmouth
College and Warwick University, for example,
found that “happiness and life satisfaction are
U-shaped in age...well-being reaches a minimum,
other things held constant, round the age of
forty.” 3 Not only has this happiness curve been
demonstrated by extensive data from the United
States and Europe, but data from 72 countries
corroborates the trend. 4 (We should note that while
the LearnVest data was analyzed by cohort, similar
studies have found that “the U-shape seems to be
unaffected by cohort influences.” 5 )
With supporting evidence for the U-curve in the
broader context and other data sets, we set out
to understand what causes financial confidence to
nose-dive over time.
8 Financial Confidence: Examining the U-Curve—and How We Might Improve the Confidence Trajectory