How a Love of Money Can Sabotage Your Finances

If you love money a lot, you're probably a poor investor, according to a new study.

How a Love of Money Can Sabotage Your Finances Photo by Ollyy / Shutterstock.com

If your investment portfolio is struggling, perhaps it’s time to take a look in the mirror.

Investors’ financial outcomes are directly related to their love of money, according to a new study by the State Street Center for Applied Research.

The center’s senior vice president, Suzanne Duncan, recently explained to Bloomberg:

“We found that the more that people love money, the worse their outcomes are and the more money they actually lose as a result of their affinity for money.”

For the study, the center surveyed 3,600 individual investors across 20 countries.

Researchers found that investors who scored higher on a “love of money” scale developed by the center made worse financial decisions, which led to their worse financial outcomes.

As Duncan told Bloomberg:

“It’s about your emotional attachment to money, and that exacerbates behavioral biases in a pretty significant way.”

The Center for Applied Research also found that investors with stronger attraction to money take on more risk. Duncan notes that while these investors’ risk is not necessarily a bad thing, it can be accompanied by a litany of “behavioral biases that wreaks havoc on their portfolio in the long-term.”

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