The relationship between time perspective and financial risk tolerance in young adults

Abstract

This study examines the relationship between time perspective (TP) and financial risk tolerance (FRT) in young adults. Prior research suggests young adults should invest in riskier portfolios to maximize wealth accumulation for retirement. Optimally, they will have a future TP and a high FRT. The results of this study indicate that TP accounts for a significant amount of variance in FRT. However, the relationship between TP and FRT is not optimal. Future oriented individuals exhibit lower FRT and present oriented individuals exhibit higher FRT. The paper concludes with discussion of the implications of these findings and suggestions for future research.