Know Your Personality Type = Make Better Financial Decisions
A previously unrecognized realization flashed across my mind. For the first time, I thought “Wow, it makes more sense now. The exhaustion and inability to wind-down following client meetings, social events, and family functions is linked to my personality type.” This was grouped with “No wonder I have certain beliefs about money” and “I'm more of an introvert than I thought!”
The result of this earth shattering (for me) realization has led to personal changes and improvements. What prompted all this? Clicking the most appropriate of the oddly worded multiple-choice options while thinking “This is silly and will never work.” Since seeing the personality profile test results, I've found it really helpful.
I'm a financial planner by trade, but also an amateur psychology enthusiast (as you may be as well, seeing as though you’ve made it into paragraph three). I’m not claiming authority on this subject but am passionate about learning why people do what they do. There are many tests for different personality profiles (not advocating one over others) but I'll be referring to the DISC profile.
Here are some thoughts related to finances:
Dominance - The ambitions driver. Strong-willed, determined, and competitive.
Advantages this personality profile may have in making financial decisions - The natural drive to get ahead can lead to higher incomes and assets. Competitive by nature and the desire to do well financially.
What to watch out for that could hurt your finances- Quick decisions and quick trust in the wrong advice can be detrimental. Overconfidence in a poor business venture or investment can quickly lead to long-term consequences. The next best thing may not always be the next best thing.
How to make better decisions - You're busy. A high-powered person needs a team to help you accomplish everything. Find the right team giving the right advice and not just telling you what you want to hear.
Influencing - The outgoing, enthusiastic, life of the party. Accepting and warm and someone everyone loves.
Advantages - Great at networking, small talk, and making people feel comfortable. Good interview skills and interpersonal skills
What to watch out for - Potentially too trusting of others without looking deep into the details can lead to getting the wrong advice. Also, less focus can exist on personal finance which could lead to erosion of funds through unknown fees/charges, not noticing fraud, or lack of proper returns.
How to make better decisions - Set aside time monthly to review your finances (as painful as it is) and maybe make it social! Get some friends together to share budgeting, career, and financial ideas.
Steadiness – The desire for predictability, consistency, and stability. It makes sense now, the anxiousness when my savings account drops, the avoidance of confrontation, and desire for steadiness.
Advantages - A more cautious approach often means more frugality and better savings habits. Not chasing (and potentially being burned by) the next hot trend or investment idea.
What to watch out for - A lack of taking risk could mean underperformance (potentially more conservative than appropriate), career and relationship advancement opportunities could be missed, and personal growth may be hindered due to desire to stay in comfort zone.
How to make better decisions - Once the desired safety net is made, educate yourself to become more comfortable with other ideas. Force yourself out of your comfort zone once in a while. New isn’t always bad, new is just new.
Compliance - Systematic, cautious, and analytical. Home of paralysis by analysis.
Advantages - Accurate decisions and a well thought out approach. Desire to become educated in financial strategies to make informed decisions.
What to watch out for - Lack of decision-making leads to stagnation. Researching a subject too much and waiting too long to act could miss opportunities or result in continuing to do it how you've always done it. Lack of trust in professional advice (or only trusting one particular guru) could be detrimental in the long run.
How to make better decisions - Progress over perfection. Don't let the lack of all possible information lead to inaction. Gather as much as possible, but sometimes "making a decision, and then making it right" is better than "waiting to make the absolute right decision."
Regardless of personality type, anyone can be financially successful. Knowing your type and realizing your strengths to double down on, and your weaknesses to be aware of (and give yourself grace about) may be a helpful way to make better financial decisions this year! I scored a high “S” and high “C” by the way.
Hopefully, these observations are helpful. For more articles, calculators, or to schedule time to meet and consider a professional partner, check out www.precisionwealthpartners.com.
About the Author
Paul M. Mitchell is a registered representative of and offers securities and investment advisory services through MML Investors Services, LLC. Member SIPC. Precision Wealth Partners is not a subsidiary or affiliate of MML Investors Services, LLC, or its affiliated companies. His office is located at 2 Bala Plaza, Suite 901, Bala Cynwyd, PA 19004 . You can reach Paul at 610-766-3000. CRN202501-1536961.