This paper confirms earlier evidence that richer, educated households of larger size are less prone to making financial mistakes than other households. These results have motivated the construction of a single index of financial sophistication that best explains a set of three investment mistakes. The index of financial sophistication increases strongly with financial wealth and household size, and to a lesser extent with education and proxies for financial experience, but is lower for self-employed and immigrant households. It is of course difficult to unambiguously establish that any behavior is a mistake, especially when one considers the possibility of nonstandard preferences. The empirical finding that poorer, less educated, immigrant households are more prone to joint deviations from rational benchmarks makes it more plausible that these deviations are indeed mistakes.