“Love of money” may not be all it’s cracked up to be. In fact, if you love money, chances are it doesn’t love you back.
A new study from State Street’s Center for Applied Research surveyed three thousand retail investors around the world. The study found that nearly 60% of investors who scored high on a “love of money” scale have had bad financial outcomes. And the opposite is also true: those investors who love money the least made better investment decisions.
According to State Street, the probable reason is that money lovers are susceptible to instant gratification. They want to have the money now, and they make short-term decisions. They’re also less likely to save for their retirement and more likely to buy high and sell low.
So who loves money the most? US respondents ranked fourth highest, exceeded by those in India (which scored first), China, and Brazil. And age matters: some two-thirds of millennials scored high on the survey, compared to 48% of baby boomers.
According to the study, there’s no correlation between money love and existing wealth. Suggests Suzanne Duncan, head of global research at State Street, some people just have a higher emotional connection to money.
The study underscores the importance of getting advice from an unbiased third party when making money decisions. If you think you might be a money lover – or simply guilty of short-term thinking when it comes to investing – remember that your advisor has been trained to help guide you. Don’t let money get the best of you.