How Different Personality Types Affect Financial Planning and Wealth Creation
Have you ever wondered what your personality has to do with your investment decisions? Have you ever wondered why some people simply seem to be programmed to create wealth? Well, wonder no further.
Research has revealed that there is indeed a connection between your personality type and your propensity to behave in a particular manner, as far as finances are concerned.
We share with you some of the findings of the personality types and what to avoid in them.
Personality Type 1 – Research Everything
oThere is nothing wrong with research and you should do your homework before making major financial or investment decisions.
oHowever at some point, research must come to an end and action should take over thereafter.
oIf no action takes place, then this can lead to analysis paralysis, where the individual remains in a perpetual state of preparedness, always seeking a little more information, or clarification before moving forward.
Personality Type 2 – What You Don’t See Won’t Hurt You.
oThis type generally has all the credit cards you can think of and just for good measure, also has some major department store cards in their possession at any one time.
oBecause there is essentially no cash transacted with any of their purchases, they psychologically feel no money has been put to use and continue spending like there is no tomorrow.
oThey therefore easily fall into the biggest consumer debt trap that there is, credit card debt.
oThe answer for this lot is to remove all forms of credit cards and, if they must have a card, then it should be a debit card. This is a card that is preloaded with a fixed amount of cash and you can only spend what’s on the card and not a penny more.
Personality Type 3 – Spendaholics
oThis type must buy something, anything. This is what gives them a rush.
oThis person should never be allowed into a shop without a pre- agreed plan on what it is they will do in the shop.
oThis type of person should only enter a store after they have made a list of exactly what essential goods they are going to buy and to stick to that list.
oThis person should never have access top a credit card, as they will not have the discipline to use it correctly.
oOnly cash accompanied by a specific list drawn up prior to entering the store should be used.
Personality Type 4 – Cheapest Possible Price
oThis one has a different type of disorder in that they will not be anything unless it’s the absolute cheapest price that there is.
oThis disorder is often masqueraded as one of “getting the best deal” out there.
oThis stems from many things, among one of which is fear of spending any money.
oThe problem here is that many times the absolute cheapest item is just that…..cheap. In many cases the products do not last at all and one ends up paying a lot more in the long run for these “cheap” products.
Personality Type 5 – Decision making Through Hearsay
oThis type has no fixed opinion of their own, so they go by what others say and do.
oThey conduct no research to verify any information received and take everything they hear at face value.
oAs a result of this, they keep changing their minds depending on what the latest information is that has come their way.
Personality Type 6 – Impatient
oThis type is looking for instant results on everything. The shortest route to instant gratification is what appeals to them.
oThis personality type wants things done yesterday and will often abandon very sound plans before they yield any results.
oThe final outcome here is that this person is forever in start-up mode because they are always trying out a new plan, since the previous one “didn’t work.”
Personality Type 7 – Hands off Anything Financial
oVery willing to dump financial responsibility or decision making onto others.
oThey tend to duck any financial decision making that has been left to them to execute.
oThey want the rewards of a good financial plan, but not the work associated with it.
oThey are surprisingly shocked to find that things have not taken care of themselves.
Personality Type 8 – Dreamers
oThis type would love to lead the good life and can often describe it to you in vivid detail.
oThey however make little or no effort to get their heads out of the clouds and into reality.
oThe problem here, as you can imagine, is that dreams by themselves do not pay any bills; only action from dreams can do this.
Now before you set yourself off in a major panic, just remember that we all have a little of these traits in us, so you’re not a lost cause for having spotted such signs in your behaviour. The important thing to ensure is that none of these destructive personality types dominates your financial decision making process.