Age and Risk

It is a long held notion that youth takes more risks. It has something to do with invincibility. But a science field known as neuroeconomics is growing. It combines neuroscience, economics, and psychology to study how we make choices.

What this field is finding is that as you age your brain changes how it deals with risk. Two areas particularly change – the insula and the amygdala. Insula is where your brain processes repulsive input from your senses. As you age, it gets smaller. The amygdala, which controls your fear reflexes and some of your survival instincts like generating adrenaline, also becomes less active.

What this means is you are more willing to take risks as you get older. Now, I would divide risk into two forms here, physical and psychological. This field is talking more about psychological.

There is a story on CNNMoney.com that depicts the investment changes because of this. The story is by Jason Zweig and it is called Inside the Mind of the Older Investor.

But what the story doesn’t go into is how the brain came to this result. Is it from being worn down or is it from exposure to situations? Does experience change perspective? Does being aggressive and successful change an outlook? There are many personality traits that need discussing too. If we can come to understand these questions then we can create a path for people that have certain goals. It still won’t be any sure things, but there will be a map with many routes to take.

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