True wealth: Thane Stenner
Understanding your high-net-worth personality is key to investment
success
What do you think about money? How do you feel when you invest?
What role does wealth play in your life?
When it comes to managing your wealth, your personality is an
important part of the equation. Or to put it more plainly: who you are
plays as much a role in your long-term financial success as your
ability to pick winning investments. Over the course of my career,
I’ve spent a good deal of time studying the personalities of wealthy
people. And while I would never say that wealthy entrepreneurs can be
“slotted” into pre-set categories, I have found that most high-
net-worth (HNW) individuals fall into one of the following personality
types.
The Caregiver
The caregiver’s motivation is family: taking care of it,
nurturing it and ensuring its long-term financial security across
multiple generations. Because these are longer-term goals, caregivers
tend to be less susceptible to short-term financial thinking. However,
they need to be careful that their desire to care for family doesn’t
leave the kids unmotivated.
The Boss
To the boss, money means power. Sometimes this can translate into a
motivated, driven individual who’s attentive to detail and willing
to accept risk. But bosses can also be impatient people and can be
prone to making quick, ill-considered financial decisions.
The Libertarian
When libertarians think of money, they think of freedom – freedom
from work, yes, but most of all, freedom from worry. While this narrow
focus often results in purposeful investment decisions and a drive to
save, it can also leave important goals such as estate or tax planning
ignored.
The Runaway
The runaway will go to great lengths to avoid talking or thinking
about wealth. This isn’t necessarily a bad thing. Often, the runaway
delegates important financial decisions to a trusted financial
professional, thereby avoiding many of the self-made problems and
financial challenges other personalities may face. Then again, a
complete abdication of financial responsibility is never a good idea.
The Player
For the player, investing is a game, and wealth is a way to keep
score. If players can separate their “serious money” from their
“play money,” the gambling can sometimes pay off. But the constant
pursuit of high-risk opportunities leads to a portfolio that lacks any
clear purpose and fails to fit into any long-term strategy.
The Recluse
Most HNW individuals want to keep their financial affairs private.
For the recluse, however, this desire borders on obsession. Even when
working with a professional, it’s common for the recluse to withhold
key information and maintain multiple portfolios. That can result in a
piecemeal approach to wealth management.
The Superstar
For superstars, wealth is ultimately a stand-in for status: the
more they have, the better they feel. As such, superstars tend to be
focused on spending. Not surprisingly, this tends to put a great
strain on their financial position.
The Academic
These individuals pride themselves on their financial knowledge.
Because they’re keenly aware of what’s new in the investment
world, academics can be aggressive investors. Their ceaseless
attention to the “numbers” sometimes leads them to forget the big
picture.
The Empire Builder
For empire builders, wealth is a way to measure success and
self-worth. Because their primary goal is to build wealth, they’re
often more focused on investment and speculation than some of the more
“routine” matters, such as estate or tax planning. Understanding
your own personality allows you to zero in on the emotions that
dominate the way you think and feel about your wealth.
And that can be an important first step in your continuing effort
to build and secure your long-term financial health. •
