Here's Why Most Money Goals Are Doomed to Fail
How to create financial goals based on your personality
In all people, there is a conflict between who we are and who we want to become.
That sounds like something you’d find carved into an ancient tablet by a stoic philosopher. It’s actually the opening line of a fascinating 2010 research study that explains how our personality traits determine whether we achieve our goals.1
The authors point out that who we are today is dictated largely by our personality traits and that who we want to become in the future is reflected in our goals. If you don’t understand who you are today, it will be difficult to realize your goals and become the person you want to be.
After reading this paper, it became clear to me why so many people’s financial goals fail; they don’t consider their personality traits.
Most people use overly simplified rules of thumb or generic advice they read online.
Personal finance, as it’s traditionally taught, should be called “generic finance” because most people who teach finance do not mention how your personality impacts your finances.
I aim to put the personal back in personal finance, and I continue working toward that goal by discussing the importance of creating goals based on your personality traits.
(If you aren’t familiar with the “big 5” personality traits of openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism, read this article where I explain each of these concepts)
The research aims to answer one important question
“Do individual differences in personality traits predict the major life goals a person chooses to pursue in life?”2
Notice the phrase “major life goals.” This refers to issues like retirement, career choice, homeownership, having kids, and any other desire you have that would fundamentally change your day-to-day life if you achieved it.
The researchers interviewed 672 undergrad students and asked them to rate 38 different life goals on a scale of 1-5, with five being the most important.
Each participant was given a personality test to measure how they scored on each of the big five personality traits: Openness, Conscientiousness, Extroversion, Agreeableness, and Neuroticism.
Aligning financial goals with personality traits
Of the 38 goals, I will focus on nine goals related to money and careers. Below each goal, I will list the personality traits in order of which traits value that goal the most.
Goal #1—Having a high-status career
Extroverts—Outgoing people.
People with low openness to experience—practical people who focus on the traditional ways of doing things
Non-Agreeable people— people who lack empathy and focus on their advancement.
Conscientious people—Those with a high degree of self-control.
Goal #2—Having a high standard of living and wealth
Non-Agreeable people
Extroverts
People with low openness to experience
Goal #3—Becoming a business executive
People with low openness to experience
Extroverts
Goal #4—Owning my own business
Non-Agreeable people
Extroverts
People with low openness to experience
It’s worth pausing here and noting that it would appear that having a high-powered career in the business world seems to be most valued by people with the following combined personality traits: “Outgoing people who lack empathy and focus on the traditional way of doing things.”
Moving on…
Goal #5—Working to promote the welfare of others
Agreeable people—people with high empathy
Openness to new experiences— creative and adventurous people
Neuroticism—Describes how frequently someone feels negative emotions like fear, anxiety, guilt, or sadness.
Goal #6—Having a job that is personally satisfying, even if it does not make me rich
Openness to new experiences
Agreeable people
Goal #7—Become an authority on a special subject in my field
Extroverts
Non-Agreeable people
Goal #8—Earning enough to be comfortable and no more
Agreeable people
Goal #9—Being married to someone who has a career in addition to my own
Neuroticism
Extroverts
If you want to see how each personality trait matches up with all 38 goals, check out Table 4 in the study here.
The formula for an unsatisfying life (and how to avoid that fate)
The real danger is following goals that other people pressure you into pursuing. Whether it be society, your family, or people you follow on the internet.
The formula for an unsatisfying life is to dedicate your life to achieving a goal not because you wanted it—but because other people made you feel like you should want it.
If you pursue a major goal that is unrelated to any of your personality traits, you’ll experience one of two outcomes:
You try and fail to reach that goal and waste time and energy in the process.
You reach that goal, often at a great personal sacrifice—only to discover you never really cared about this goal to begin with.
This is especially a problem for introverts. Somewhere along the line, society adopted the idea that being an extrovert is “good” and being an introvert is “bad.” How often are introverts told “to come out of their shell.” But how often do we tell extroverts to sit down and let other people speak?
Since being an extrovert is thought of as desirable, goals associated with extroversion often get foisted upon introverts.
As a result, introverts adopt goals they don’t actually want, like a fancy job title and building massive amounts of wealth, when a more appropriate goal might be to find a job they enjoy and can *only* pay the bills.
How does someone have a chance at a happy, successful life if they are forced down a path to pursue goals that make someone else happy?
Any financial goal that is not aligned with who you are is doomed to fail because even if you “achieve” that goal—it’s unlikely to make you happy.
My challenge to you
First, if you have not already taken a personality test and get a baseline for your most prominent personality traits, here’s a link to a free test.
Second, review your financial goals and ask yourself, “Which of these are aligned with my personality traits, and which aren’t?”
Aligning your financial goals with who you are is step one of a successful relationship with money.
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This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
Roberts, B. W., & Robins, R. W. (2000). Broad Dispositions, Broad Aspirations: The Intersection of Personality Traits and Major Life Goals. Personality and Social Psychology Bulletin, 26(10), 1284–1296. https://doi.org/10.1177/0146167200262009
Roberts, B. W., & Robins, R. W. (2000). Broad Dispositions, Broad Aspirations: The Intersection of Personality Traits and Major Life Goals. Personality and Social Psychology Bulletin, 26(10), 1284–1296. https://doi.org/10.1177/0146167200262009