- Our personality types affect how we think about and manage money.
- Knowing your personality type's superpowers and Achilles heels can help you make the most of your natural strengths, while avoiding the inevitable weaknesses.
- To make the most of your Money Personality, consider practicing mindfulness when contemplating meaningful financial decisions.
Are you a Defender or a Benefactor? An Optimist or a Solo Flyer? Everyone's unique personality traits help them navigate the world in different ways. That's even true for money and investing decisions, according to recent Fidelity research. Understanding your own innate money superpowers can help you pursue your financial goals in ways that are most effective for you.
"There's no perfect personality type," says psychologist Andy Reed, PhD, Fidelity's behavioral economics research lead. "But recognizing the strengths and opportunities associated with our own personality type can help us be more realistic about how we manage our financial lives."
What are the money personalities?
The science behind the quiz
The Money Personality Quiz is based on the Five-Factor Model of Personality, known colloquially as the "Big Five." The Big Five framework is the gold standard theoretical model in personality research, having been validated by decades of research around the globe.
According to the framework, personality can be measured along five key dimensions:
- Openness: Being open (vs. closed) to new ideas, values, or experiences
- Conscientiousness: Being orderly, disciplined, or careful
- Extraversion: Being gregarious, positive, or energetic
- Agreeableness: Being altruistic, modest, or cooperative
- Neuroticism: Being anxious, self-conscious, or easily upset
When you take the quiz, you rate how much you agree with a series of 20 statements about how you think, feel, and behave when it comes to money and investing. Each statement is aligned with one of the 7 personality traits described above and rated on a 5-point Likert-type scale from "Strongly Disagree" to "Strongly Agree."
Using the responses to the statements, Fidelity then calculates which personality trait is most striking for each person. That trait determines her or his personality type.
Reed and his Fidelity colleagues developed the Money Personality Quiz to help people better understand how personality traits impact money and investing decisions. In the 2 minute quiz, which has been taken by thousands of Viewpoints readers, users respond to statements about their thoughts, feelings, and behaviors, such as "Spending money is fun," "When the market drops, it makes me anxious," and "I think I can beat the market when it comes to investing."
The quiz then provides unique feedback based on each user's answers. People fall into one of 12 personality types, which are based on the gold-standard "Big Five" theoretical model in the field of personality research. (For more information, see "The science behind the quiz.")
Each personality type has its superpowers—and its Achilles heels. By analyzing quiz responses,* we were able to identify those for each personality type. Knowing each can help you make the most of your natural strengths, while avoiding the inevitable weaknesses that often blindside investors.
The Benefactor was by far the most prevalent personality type among more than 24,000 Viewpoints readers who took the quiz between June and August 2020. Benefactors frequently put others before themselves—supporting family and friends emotionally and even financially, and donating to favorite causes. However, Benefactors are typically modest when it comes to their money approach—they don't want praise, don't consider themselves wealthy, and hope others don't either.
Some of Benefactors' superpowers include planning and saving. They may invest their money in things that would benefit their loved ones, like a health savings account or a 529 college savings plan. That altruism may also lead to pitfalls, though: Benefactors may sacrifice their own financial future for the sake of others, perhaps neglecting their retirement savings in favor of their kids' college savings or even skimping on their own expenses in retirement so they can leave a larger legacy to their heirs. Ultimately, Benefactors can benefit from objective advice about their financial plans to ensure that their priorities are balanced.
Planners are the second most common personality type among Viewpoints readers. They like to keep themselves, and their assets, organized—they pay their bills on time, stick to a budget, and monitor their progress toward their financial goals. However, that vigilance may come at a cost: Planners who check their investment accounts frequently might feel unnecessary stress—or try to time the market, which can be counter-productive. These investors should focus on trusting the plans they've created, and treat themselves to an indulgence now and then.
Optimists are the third most common personality type. They genuinely believe things will turn out well, which can inspire them to try new or challenging endeavors. And when negative things happen, they typically bounce back readily. These qualities are hallmarks of successful long-term investors, who believe the value of their investments will grow over time. Optimists are also motivated to save now so they can benefit from their assets later in life.
While we can all benefit from a dose of optimism to keep us going during periods of stress or adversity, it is actually possible to be too optimistic. Investors with this profile sometimes trade too much, take on too much risk or misunderstand investment performance. To avoid these risks, Optimists should consider reviewing their portfolio annually with someone who can provide an objective view of how they're doing.
Your money personality in action
The Money Personality framework provides a helpful way to assess the attitudes and behaviors that can influence your approach to your finances. But of course, no human being can be defined by a 2 minute quiz. When it comes to real life, most people are combinations of various personality types, with one or more dominant traits. And some of those traits connect to one another. For instance, Adventurers are likely to have higher levels of optimism, believing that things will get better in the future. After all, says Reed, "It's a lot easier to take risks when you have confidence that something good will happen—especially in the investing domain."
Likewise, Skeptics and Defenders are closely related. If you worry about the future, as Skeptics tend to, you are more likely to react strongly to ups and downs in the market—and in these situations, Defenders are often the first to react.
The good news, according to Reed, is that your Money Personality doesn't necessarily define you—and it doesn't have to dictate the actions you'll take. "Personality is not destiny," he says.
To make the most of your Money Personality—and counteract its challenges—Reed recommends practicing mindfulness when contemplating meaningful financial decisions. "Pause and think about a decision before you act," he says. "That moment of reflection can provide balance, ensuring that your deep-seated personality traits don't prompt an unproductive knee-jerk reaction."