The first step to creating wealth (including getting out of debt and investing money wisely) is gaining insight into the four basic money personalities. The more people know about their financial beliefs, the easier it is to accumulate wealth.
Here is a brief description of money hoarders, achievers, entrepreneurs, and thrill-seekers, plus tips for financial prosperity for all money personalities.
Money Hoarders
A money hoarder doesn’t like to take financial risks with investments or big purchases, and has a low desire to create wealth. “Typically, hoarders are careful, conservative money managers,” writes Liz Koh in Your Money Personality: Unlock the Secret to a Rich and Happy Life. “They live by a strict budget and keep spending under tight control.” Hoarders prefer to keep their money secure, such as in a bank account.
If hoarders are prosperous, it’s due to earning a high salary or having substantial secure assets. To create wealth with this money personality, hoarders need to step outside their comfort zones, seek expert financial advice, and learn as much as they can about investing and investments.
Achievers and Wealth Accumulation
An achiever is relatively conservative, but has a strong desire to succeed in life and create wealth. They are analytical and cautions in their approach to money. Achievers are usually well-educated and well-read. They often have highly paid professional jobs and ambitious career plans. Achievers tend to spend money on high-ticket items, such as a home in a high-priced suburb, an expensive car, private school education, and designer clothes.
To gain financial prosperity, achievers might focus less on spending less money on high-priced items that create an impression of affluence. Instead, it may be financially smart to find ways to look and feel affluent without spending a lot of money or going into debt. Creating and sticking to a household budget that focuses on achieving financial goals.
Entrepreneurs and Creating Wealth
“Entrepreneurs are true creators of wealth, people prepared to take an initial high level of risk,” writes Koh in Your Money Personality. “Entrepreneurs can succeed despite having few assets or a small income.” They’re also more likely to fall into bad habits with money or create a high level of debt. Entrepreneurs tend to go to extremes: millionaires one day, financially bankrupt the next.
To create wealth with this type of money personality, entrepreneurs need to diversify their financial assets, and separate their personal and family assets from their business and professional assets. If they invest in high-risk ventures, they need to have a plan for knowing when to bail out and minimize their losses.
Financial Thrill-Seekers
Thrill-seekers care less about accumulating wealth, and more about enjoying financial risks. They gamble their money and have an “easy come, easy go” attitude. “They often have a high level of income, which is used for short-term satisfaction,” writes Koh. “Credit cards are used to their limits. Mortgages can be extended to pay for an overseas holiday.”
To be financially prosperous, thrill-seekers need to stop spending and start saving. They need to invest in long-term investments or savings accounts, where they can’t get to their money and spend it on things that offer instant (but temporary) satisfaction.
It is possible for all four types of money personalities to be financially prosperous! First, people need to figure out the profile that most closely fits them. Then, then they need to adjust their financial plans and goals accordingly….and remember that money can buy happiness.
Source:
Koh, Liz. Your Money Personality: Unlock the Secret to a Rich and Happy Life. (AWA Press, 2008).
Laurie Pawlik-Kienlen - Laurie Pawlik-Kienlen is a full-time writer and blogger in Vancouver, BC, and the creator of the Quips and Tips blog series.
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