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
For those at the lower end of
society, though, being nice and trusting can be financially problematic.
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.
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.
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
The study was published in the
Journal of Personality and Social Psychology (Matz & Gladstone, 2018).
Kayode Ojo
Kayode Emmanuel Ojo is the Co-Founder and Managing Director at SHEFFA Limited. He is presently studying Computer Science at the National Open University, Victoria Island, Lagos.