The Personality Trait Linked To Bankruptcy

People with this trait are 50% more likely to be declared bankrupt.

Being kind and trusting is linked to financial hardship, especially for the poor, new research finds.

In general, people who are more agreeable are at greater risk of bankruptcy and lower credit ratings.

The reason is that people who are agreeable tend to care less about money.

For those who have an adequate income, caring little about money is not as big a problem.

With greater financial resources to fall back on, richer people can afford to give money a low priority.

For those at the lower end of society, though, being nice and trusting can be financially problematic.

Dr Sandra Matz, the study’s first author, said:

“We were interested in understanding whether having a nice and warm personality, what academics in personality research describe as agreeableness, was related to negative financial outcomes. Previous research suggested that agreeableness was associated with lower credit scores and income. We wanted to see if that association held true for other financial indicators and, if so, better understand why nice guys seem to finish last.”

The study analysed data from over 3 million people.

It used bank account data, a national survey, two online panels and publicly available data.

Dr Joe Gladstone, study co-author, explained the results:

“Not every agreeable person is at equal risk of experiencing financial hardship. The relationship was much stronger for lower-income individuals, who don’t have the financial means to compensate for the detrimental impact of their agreeable personality.”

The results also revealed that agreeableness in childhood predicted financial problems 25 years later.

Dr Matz said:

“Our results help us to understand one potential factor underlying financial hardship, which can have serious implications for people’s well-being. Being kind and trusting has financial costs, especially for those who do not have the means to compensate for their personalities.”

The study was published in the Journal of Personality and Social Psychology (Matz & Gladstone, 2018).