We’ve all read about personalities based on Chinese zodiac signs, horoscopes, quizzes and tests. Find out what is your Money Personality, it’s strengths and weaknesses.
Money Personality
Money means different things to different people. Our unique life experiences shaped and conditioned us to respond to money differently, which is reflected in our spending behaviour. Recognising our Money Personality will allow us to understand how our habits help us to and/or inhibit us from, having a healthier relationship with money.
#1: The Worrier
They fret over every worst-case “what-ifs”, from a recession to worrying about how a single mistake can lead to bankruptcy, even during comfortable times. They tend to be thrifty, risk-averse, and are diligent with their finances (e.g. using apps to track credit card points/ rebates and their spending) to avoid making errors. Even though they understand the concept of inflation, their insecurities can prevent them from growing their assets in a level-headed manner. And this adds on to their worries.
Protip: While Worriers are great at saving money, the way they save money is often counter-productive/self-sabotaging (e.g. being too careful that they lose out on opportunities for investments). Take baby steps as you begin to build your money nest. Worriers will be more comfortable with instruments that:
➢ Are capital-guaranteed
➢ Require minimal capital outlay (e.g. $100/mth)
➢ Have a short contribution period (e.g. 5 years)
#2: The YOLOer
“What if I die tomorrow?” With this classic statement as their excuse, YOLOers tend to go all out in pampering themselves and enjoying the good things in life. Because they do not want to ‘deprive’ themselves, and they believe in dying with no regrets. So it comes as no surprise that they often live from paycheck to paycheck.
Protip: Just like flipping a coin, every day we have an equal chance of living and dying. This means not only should YOLOers worry about their money outlasting them (if they die young), they also need to worry equally about what if they outlast their money (if they die old). It will be easier for YOLOers to start saving for future use with instruments that:
➢ Require minimal capital outlay (e.g. $150/mth)
➢ Have no lock-in period (e.g. investment-linked policies)
➢ Have no fixed maturity date (e.g. the investment can be kept for as long as they like) so that it is easy to keep this money separate until they retire
#3: The BoChup
They know money management is essential but they are either too lazy to do it on their own, or prefer someone else to do it for them. E.g. their spouse, parents, siblings, or relatives. BoChups assume that their trusted aides know what they are doing, and will do all that needs to be done. Unless their loved one is a financial planner, the obvious risk of entrusting someone else to do the job for them is that the end product is often not
what they would expect. And it usually ends up in a ‘blind leading the blind’ situation. Hence whenever BoChup type clients tell me that their parents already bought them enough insurance or a savings policy for future use, we always end up finding out that it is incomplete and/or inadequate.
Protip: The moment someone thinks you are qualified enough to work for them full-time, is also the time that you start to be responsible for yourself, including your finances. BoChups can learn from scratch by:
➢ Engaging an experienced financial planner who can share with them
their accumulated knowledge
➢ Reading up on money-related topics found in credible publications,
both digital and otherwise
➢ Watching educational money-related content online
#4: The Saver
Cash is King to the Savers, and they are polar opposites of YOLOers. Saving money is their default operating system and the more cash they have sitting in their bank account, the more secure they feel. But Savers have an unexplainable urge to hold their assets only in cash, even when they know that they will not use all of it at once for any reason. This makes it challenging for them to practice money management. Their need to be able to see their money (bank balance) overrides their logical understanding of inflation. I have encountered Savers who tell me that if they have $100,000, they’d rather keep it all in their bank. And 20 years later, even if the $100,000 is only worth $50,000 in real value, they will not mind it since the nominal value will still be $100,000.
Protip: If Savers wish to free themselves from the curse of ‘only working hard, but not working smart’, refer to Protips for The BoChup.
#5: The Know-It-All
They are Jack of all trades, Master of none. Know-It-Alls usually only have very basic knowledge of certain topics, but think that it is sufficient to qualify them as experts, and are eager to DIY their financial portfolio. Know-It-Alls probably are the most enthusiastic when it comes to money management. But if they over-estimate their abilities, they can end up paying heftily for a lesson learnt. I’ve come across Know-It-Alls who tell me that safe and regulated investment products such as Unit Trusts, are for ignorant investors and those who lack knowledge. Whereas investors like themselves who are smarter and more well-informed, will rather invest in cryptocurrency/land banking/physical gold, as they are trendier and much more lucrative. But these Know-It-Alls did not know how to differentiate
the legitimate companies from the scams, and sadly ended up losing thousands of dollars.
Protip: It is beneficial for Know-It-Alls to learn not to:
➢ Hastily investing in unregulated investments. Just because there’s a lot of hype about it and/or other people are also investing, doesn’t mean that all of it is legitimate. Never invest with a company that you are unable to fully verify, and naively think that all will go well
➢ Undergo a consultation session with a qualified financial planner, with a ‘I already know all there is to know’ mindset
➢ Try to side-track the fundamentals methods of money management just to prove to themselves/others that they are more capable than the majority. Even geniuses also have to perform basic functions such as peeing, pooping, eating, and sleeping.
Each Money Personality has its strengths and weaknesses. We don’t have to change ourselves overnight, but it is always better to overcome our weakness, than to allow it to overwhelm us.
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