According to a fascinating feature in the Financial Times this week, each of us fits into one of six financial personality types: these include The Hoarder, The Splasher, The Anxious Investor and The Ostrich… Which one are you?
In life, no two people are the same, so it is inevitable that we all have different relationships with our personal finances and varying outlooks in terms of saving and investment. But in our experience, the article certainly does a good job of pigeon-holing many of the people we come across in our profession.
According to the writer, Naomi Rovnikk; “Financial psychology is a somewhat overlooked discipline that occupies the space between psychology and behavioural economics.”
After reading the personality type descriptions below, and the full FT article here, you will no doubt also identify the traits of other people you know too, we’ll let you decide if you want to tell them or not next time you see them!
The Anxious Investor
Lovers of risk, anxious investors trade frequently and believe they have the edge over others. Despite their overconfidence, they are prone to be beaten by the markets — and frequent trades mean they often rack up high levels of charges.
For hoarders, money represents security. They abhor risk and may even stockpile cash that they would probably be better off investing — or even spending.
The Social Value Spender
Does shopping make you happy? Do you frequently buy your loved ones presents “just because” and blow the budget at Christmas and birthdays? You could be a social value spender, which the Money and Mental Health Policy Institute defines as someone who makes purchases (either for themselves or others) to boost their self-esteem.
The Cash Splasher
Cash splashers view themselves as generous, but they also use money to make others think more highly of them.
The Fitbit Financier
You check your online bank balance and track your spending as often as someone training for an extreme sporting event measures their calorie intake, resting heart rate and sleep quality.
Someone who would rather bury their head in the sand than organise their finances. Piles of post lie unopened on the doormat, and they seldom open their bank statements.
Here at The Financial Planning Group we are experienced with providing structure, reviewable investment strategies for Ostriches, Cash Splashers and everyone in between – our aim is to change the fundamental relationship people have with their money, and to give them confidence and clarity in their own future.
If you would like to arrange an investment consultation, please call Tim Norris or Alan Clifton on 0800 731 7614 and we would be delighted to arrange a meeting at our offices in the heart of Teddington.