Personality and Personal Finance: A Summer Journal from an Experienced Financial Planner

I've been a financial planner for almost eight years now, and am fortunate to work with a diverse range of clients hailing from different industries and demographics. This rich tapestry of individuals has provided me with a profound insight into the various ways people think and manage their money. Today, I specialize in working with two main segments; professionals and business owners. I meet people from a wide range of industries - from tech, to law, to finance (both traditional and de-fi), to family business owners at various stages of their empire-building. While giving professional advice on a range of topics from insurance to wealth and investment planning, I also get to observe the fascinating interplay firsthand on how different people have different proclivities in their habits and approach money management.

When assisting professionals and business owners in achieving their financial objectives, one interesting observation is how the subtleties of personality features become clear in their decision-making.? I had a discussion with David*, a successful entrepreneur client of mine recently, and he embodied the mix of ambition and risk appetite that defines business entrepreneurs. His objectives were all about achieving significant returns on his investments and business initiatives, and David's daring and entrepreneurial drive drove him to take calculated risks. We collaborated to find a balance between his risk tolerance and protecting long-term financial stability after recognizing his enthusiasm.

On the other hand, I also met Jennifer*, who personified attention to detail and a desire for monetary security. She prioritized stability and asset preservation over risk, which led to her conservative approach. In keeping with Jennifer's aversion to risk, we developed a plan that prioritized diversification, capital preservation, and reducing potential downturns. The point? That different people, who grew up differently, with different personalities, jobs, circumstances, all have different nuances to the way they think, and a good advisor should account for a deep understanding of these tendencies.

Aside from the individual, the dynamic between partners can also greatly influence financial decisions and planning. When working with couples, I often discuss how varying personalities and communication styles can impact financial harmony or create discord. For example, with a couple named John and Cecilia who perfectly embodied this dynamic. The impulsive spender John frequently disagreed with Cecilia, who valued thrift and long-term financial objectives. They were able to develop common financial goals while also meeting John's urge for sporadic indulgences because of compromise and an open communication path.

The key to bridging the gap between personalities and financial objectives is effective communication. It is possible to gain a deeper insight of clients' motives and mental processes by encouraging them to express their objectives and worries. I have seen client relationships undergo transformation through encouraging open communication, resulting in shared financial goals and increased trust.

You can probably tell that I’m quite passionate about my work. In a sense, financial planning serves as a catalyst for my clients’ self-awareness, unveiling patterns of behavior and encouraging individuals to reflect on their values and priorities. It is not solely about numbers; it is a transformative journey that nurtures personal growth. Being a part of my clients’ life journeys and growing with them is a rewarding experience, and these experiences have helped me to understand the significant influence that personal development has on financial success.

The way that personality and finances interact also serves as a reminder that financial planning is about more than just numbers; it's also about understanding people's lives and assisting them in making informed financial decisions. Personality traits, communication, self-awareness, and personal development are intertwined in this complex dance. Every client I deal with has a different set of circumstances and traits that influence their financial journey. By recognizing and embracing these individual traits, I can tailor financial plans that not only align with their goals but also resonate with their values and aspirations.

As I reflect on not just the past summer (it’s always summer in Singapore anyway!), but my past eight years as a financial planner, I am grateful for the diverse range of clients who have entrusted me with their financial well-being. I have grown with, and learned invaluable lessons about the importance of communication, the influence of personality, and the transformational nature of human growth through their experiences, achievements, and struggles.

* All names in said article are pseudonyms

P.S. Looking for someone kickass to work with on your financial planning and goals? Drop Andrew a DM @drewyberry on Instagram, or Andrew Tay, CFP on LinkedIn!