Factors Shaping Financial Success: A Deep Dive into Influencing Variables

This paper explores various socioeconomic factors that contribute to individual financial success using machine learning algorithms and approaches. Financial success, a critical aspect of all individual's well-being, is a complex concept influenced by a plethora of different factors. This study aims to understand the true determinants of financial success. It examines the survey data from the National Longitudinal Survey of Youth 1997 by the Bureau of Labor Statistics [1], consisting of a sample of 8,984 individuals's longitudinal data over years. The dataset comprises income variables and a large set of socioeconomic variables of individuals. An in-depth analysis demonstrates the effectiveness of machine learning algorithms in financial success research, highlights the potential of leveraging longitudinal data to enhance prediction accuracy, and provides valuable insights into how various socioeconomic factors influence financial success. The findings underscore the significant influence of highest education degree, occupation and gender as the top three determinants of individual income among socioeconomic factors examined. Yearly working hours, age and work tenure emerge as three secondary influencing factors, and all other factors including parental household income, industry, parents' highest grade and others are identified as tertiary factors. These insights allow researchers to better understand the complex nature of financial success and enable policymakers to grasp the underlying dynamics shaping aspirations, decision-making, and the broader socio-economic fabric of society. This comprehension is crucial for fostering financial success among individuals and advancing broader societal well-being.