Examining the Impact of Future Time Orientation on Financial Wellbeing Among Retail Investors: The Mediating Role of Overconfidence
DOI:
https://doi.org/10.54938/ijemdss.2026.05.2.714Keywords:
Future time orientation, Overconfidence, Financial wellbeing, Mediation, Retail investors, PakistanAbstract
The study examines future time orientation (FTO) influence on financial wellbeing (FWB) of individual retail investor and mediation of overconfidence (OC). Based on Self-Determination Theory, this study suggests that future time orientation influences financial wellbeing through a psychological pathway in which overconfidence plays a complementary mediating role. The study collected valid responses of 436 individual investors in Pakistan and using cross-section questionnaires distributed online through convenience sampling. The validated measurement scales of six-item FTO from Kiani et al. (2020), seven-item OC from Budiman et al. (2025) and CFPB financial wellbeing scale of ten-items adopted from Lee et al. (2020) were used in this study. The hypothesized relationships were supported by the results of the bootstrapping analysis. Individuals with higher future time orientation perform better when it comes to finances and have greater financial resilience. However, some of those positive effects are diverted by overconfidence, which leads to greater financial risk-taking of investors. The reason behind is that these individual investors determination take a risk. The findings are a useful addition to the growing literature in the field of behavioural finance. These results have practical important implications for practitioners, such as financial advisors, policy makers, individual investors and educators. These actors may seek to promote long-term financial wellbeing through improvements in future orientation and reductions in cognitive biases.
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