Your Financial Personality
Here at pwfm we will be exploring financial dysfunctions on 'Money Monday' and the first thing you need to do is to discover your personality type. Believe it or not, with just this simple illustration we can predict and describe many of the sources of financial dysfunction we see. The extreme cases are the easiest to understand. So let's start by examining the most financially dysfunction-prone money personalities the Scrooge, the Gambler, the Miser and the Shopaholic.
The Scrooge
Scrooges are very strongly motivated by a desire to accumulate great wealth (one definition of greed); they also have a strong propensity to save.The scrooge personalities we see are frequently very successful businesspeople who have amassed large amounts of money. They tend to be distrustful of others, very concerned about confidentiality, and suspicious of all kinds of financial schemes. They are skeptical of new kinds of financial investments. They tend to find a niche or an approach that allows them to make money, and they like to use it over and over again.
Scrooges are susceptible to some very specific kinds of financial blunders. They generally hate to pay taxes, which frequently becomes an area where they make mistakes. Of all the financial mistakes you can make, getting deeply into trouble with Uncle Sam is one of the most deadly.
The scrooge is often a very controlling personality type. At the extreme, you may find scrooges changing their wills on a whim depending on which relative falls into or out of favor. As employers, scrooges tend to surround themselves with people who agree with them. This makes it hard for them to get and process new information about their financial lives.
Sometimes we see dysfunctions in the way scrooges handle their investments. Because they tend to be skeptical, the investments of people with scrooge-like tendencies end up being very concentrated. They tend to put all their eggs in one basket in stock and watch the basket very carefully. Unfortunately, that carefully watched basket is subject to the volatility of the market. There are ways to diversify and insulate yourself from the whims of unstable financial markets. They are not hard to learn or to put into practice. But scrooges have to fight their own nature to do this. Often, successful entrepreneurs or powerful people in politics exhibit scrooge personalities. Examples are Howard Hughes, Ferdinand Marcos, and most of the used to be millionaires of the dot.com era.
We will explore "The Gambler" personality next week on Money Monday.
