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The 5 Financial Personality Types
The Ostrich
The Ostrich is someone who would rather bury their heads in the sand than organize their finances.
Advice: Ostriches should try to take slowly their heads out of the sand. They should try to examine their finances, take a close look at a better saving rate and consider approaching a financial planner.
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The Investor
People who invest are those who love the risk, trade frequently and have enough confidence to think they will beat the market.
A 2011 study found out that most investors underperform, namely 82%, because they were trading instinctively rather than strategically.
Advice: Continue to educate yourself, limit your trades to the amount you could afford to lose and try to act for your long-term financial benefits.
The Big Spender
The Big Spenders like to make social statements by having the latest car, clothes, or phones. They use the money for love and attention and are the main representatives of consumerism.
Advice: Think twice before making a purchase and try to filter the things that you really need from those bought by reflex.
The Saver
The Saver hates taking risks and hesitate about investing, or even spending.
Advice: Cash is not a suitable long-term investment. A financial advisor could help you find the right investment approach and the level of risk you are comfortable with.
The Debtor
They simply spend too much and don’t put much effort into keeping their financial assets in order.
Advice: Try to keep track of your expenses on a daily basis; check your bank account more often and don’t allow yourself to borrow too much from your friends.
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“The Freedom Finder”
The freedom finders like to spend on new experiences in the pursuit of “living life to the fullest.”
Try using a budgeting app or immediately allocating a portion of...
“The Relationship Protector”
The relationship protector is often family-oriented. If they can support them emotionally and financially, it gives them their sense of achievement at having helped.
A relationship protector is far less likely to make spontaneous investments when others depend on them, and their conservative approach to saving prepares them for retirement.
“The Opportunity Seeker”
They’re always looking to expand their options, and every financial decision is carefully calculated to maximize growth.
The opportunity seeker has to watch out for taking on more risk with business initiatives or investment opportunities. Spending time with a professional to seek a second opinion can help you assess whether the newest opportunity is the best one for you.
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Financial psychology
... is a somewhat overlooked discipline that occupies the space between psychology and behavioral economics. Advertisers and marketers trying to tempt us to spend money are well aware of it.
The Anxious Investor
Lovers of risk, anxious investors trade frequently and believe they have the edge over others. Many have absolutely no idea what their returns actually were and only remember their good decisions.
The Hoarder
For hoarders, money represents security. They abhor risk and may even stockpile cash that they would probably be better off investing — or even spending.
Find an advisor you feel comfortable with who can discuss the right investment approach — and level of risk — for you.
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Financial Personalities
There are five different types of financial personalities, each of them having their own set of values and outlook towards money:
- The Big Spenders: The ones who place a high val...
Saving Tips For All Types
After you have figured out your financial personality, here are a few tips to save money:
- Big Spenders need to consider fun alternatives to the high-purchases with things that cost little but bring real quality and happiness and lead to savings.
- Savers need to start living their lives, and not live in misery in the present, just for some future security.
- Shoppers need to recognise the emotions and value in saving money for their future, like a dream home.
- Debtors need to put some money in automatic saving funds to build their savings.
- Investors would do great in future, but can also make do with some purchases in the present, striking a balance.