There’s a Chinese saying that out of crisis comes opportunity. In fact the Chinese character for “crisis” and “opportunity” is identical. It looks like many Americans have taken that saying to heart. A new study from Fidelity Investments shows that the financial crisis was a wake-up call for investors and was the catalyst for making positive changes in their personal finances. As Fidelity says, they have gone from “scared” to “prepared”.
Fidelity’s research report, entitled “Five Years Later”, finds that many investors have let go of feelings of fear and now have taken action to improve their finances. Here are some of changes they have made since 2008:
- Increased Savings Rates: 42 percent increased contributions to their IRAs, health savings accounts, and 401-Ks. 55 percent of those surveyed say they “feel better prepared” for retirement.
- Reduced Personal Debt: 72 percent say they have less personal debt than before the crisis.
- Built an Emergency Fund: 42 percent say they increased their rainy day fund.
What’s most interesting is that these changes are not temporary fixes. Almost 80 percent—of those who transformed their finances– said their actions are “permanent changes in behavior.”
That’s significant and a sign of progress. But Fidelity also notes that 59 percent of investors are still scared or confused.
What about you? What changes are you making? Are you scared, or prepared?