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Front cover of Liz Koh's Your Money Personality book

 

Your Money Personality

Your money personality is influenced by the things you have learned about money from other people, your experiences with money and the stage of life that you are at. Understanding your money personality is the key to understanding how to take control of your money and set your life free.

Are you a Hoarder, an Entrepreneur , an Achiever or a Thrill Seeker?
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Prefer to use a pencil and paper for the Questionnaire?

Choose the letter preceding the phrase that best completes each of the 12 statements below:

1. Most of my money is…

a)      Owed to the bank due to maxed out credit cards

b)      In the bank

c)      Tied up in shares or property investments

d)      Dedicated to my new car or home renovations

 

2.  If I won a million dollars I would…

 

a)      Throw a party… On a cruise ship, for everyone I know

b)      Put it in the bank and phone my adviser

c)      Use it to set up that business on the side I have been dreaming of

d)      Buy a better house and car

 

3.  My philosophy on money is…

 

a)      It doesn’t come easily, so be careful with it

b)      You can’t take it with you when you die so you may as well live to the max

c)      You need it to surround yourself with things you love

d)      It comes and goes, and that’s just the way it is…

 

4.  My favourite way to spend spare time is…

 

a)      Shopping till I drop

b)      Something that is fun, but free

c)      Working on my house

d)      Dreaming up a new business venture

 

5.  What I am most concerned about is that …

 

a)      I earn plenty, but don’t have any savings to show for it

b)      I have all my money tied up in savings, but it’s not really growing

c)      I don’t mind taking risks with my money but it does upset my loved ones

d)      I probably shouldn’t shop so much, but I can’t help myself

 

6.  Other people consider me to be…

 

a)      A big spender

b)      Careful with my money

c)      Well-off, because of my lifestyle

d)      A successful investor

 

7.  When I spend money, I buy….

 

a)      Mostly on impulse

b)      Only after I have shopped around for the best price

c)      Only what I need, because I would rather invest it

d)      Quality things that will last, even if they cost a bit more

 

8.  My view on retirement savings is…

 

a)      I save money each payday for my retirement

b)      I’ll get around to when I’ve paid off my mortgage

c)      I’m investing mostly in property and businesses for my retirement

d)      I don’t need to save because someone else (or the Government) will take care of me  

 

9.  When it comes to managing money…

 

a)      I’m hopelessly out of control

b)      I keep track of what I’ve got and how much I’ve spent

c)      I have a good income but I don’t know where my money goes

d)      I take big risks, but they usually pay off

 

10.  A friend wants you to invest $20,000 in an exciting new business venture. You say…

 

a)      Yes, even if you have to borrow the money

b)      Yes, but only if you can afford it

c)      No, because its too risky

d)      No, because if you had $20,000 you’d rather spend it

 

11.  When it comes to buying a house to live in….

 

a)      I can’t save enough to buy the one I’d like

b)      I’d buy what I can easily afford

c)      I’d buy the house I like, even if it means it’s a struggle to pay the mortgage

d)      I’d buy an average house to live in so that I can buy one or more investment properties as well

 

12.  When it comes to credit cards…

 

a)      I either don’t have one or I have one but I pay it off in full each month

b)      All my cards are maxed out

c)      I still have credit available and I pay off as much as I can each month

d)      I would borrow money on one for a good investment opportunity


 The Moneymax H.E.A.T. Score Sheet

 

Put a circle around the letters that correspond with your answer. For example, if you choose answer b) to question 1, circle the letter H.

 

 

a

b

c

d

1

T

H

E

A

2.

T

H

E

A

3.

H

T

A

E

4.

T

H

A

E

5.

A

H

E

T

6.

T

H

A

E

7

T

H

E

A

8.

H

A

E

T

9.

T

H

A

E

10.

E

A

H

T

11.

T

H

A

E

12.

H

T

A

E

 

Now add up the number of times you have circled each letter and write your score in the boxes below:

 

H = Hoarder

 

E = Entrepreneur

 

A = Achiever

 

T = Thrill Seeker

 

 

Interpreting your Score:

 Everybody has elements of all Money Personality types. The two on which you scored the highest will be the ones that mostly determine your Money Personality. The one on which you had the highest score is your dominant Money Personality.

 

Your Money Personality

The amount of wealth you will create in your lifetime will not be determined by how hard you work, or how lucky you are – it will be primarily determined by your money personality, that is, the psychological factors that influence your attitudes towards money. If you want to create more wealth, forget working harder, stop buying lottery tickets and start thinking about your attitudes towards money and what drives your money personality. The two principal factors that determine your money personality are your willingness to take risks and your level of desire to create wealth.

 If you don’t have a strong desire to create wealth, it is unlikely that you’ll be successful in creating it. To be motivated, the secret is to be really clear about what it is you stand to gain once you have succeeded in your goals. It is important to stress here that it is not the amount of wealth that you wish to create that determines your money personality but the strength of desire you have to create wealth. Being successful in your wealth creation doesn’t necessarily mean making a lot of wealth, it means making the amount of wealth that you strongly desire to create, however much that is.

 To create more wealth, in general you will need to take more risk. Risk and return go together, or as the saying goes, “nothing ventured, nothing gained”. Risk can be the risk of losing your money, or not getting the return on your money that you expect. It is possible to create significant wealth providing you understand and manage risk.

 The two dimensions of money personality (willingness to take risks and desire to create wealth) can be used to identify four basic money personality types – Hoarder, Achiever, Entrepreneur and Thrill Seeker.

                       

 

Are you a Hoarder?

 Hoarders are risk averse and have a low level of desire to create wealth. They will generally only succeed in creating wealth if they already have substantial assets or a high earning potential. Typically, they are very careful, conservative money managers. Hoarders will generally live by a strict budget and keep spending under tight control. They know how much money they have and where it all goes and prefer to keep their money somewhere secure, such as in a bank account. Hoarders dislike debt and are the kind of people who, if they have a credit card will pay it off every month. They will take on debt only if they have to, for example to buy a home, and will save up to buy things rather than using hire purchase or loans. Hoarders don’t have big ambitions to create a lot of wealth. They are content with their lot and will cut their coat to suit their cloth. They would rather see their wealth grow slowly and steadily than take risks in order to have the possibility of large gains. As well as being cautious, they are also suspicious of others and prefer to look after their own affairs rather than seek advice. As a Hoarder, you will no doubt end up with a nice pile of cash in the bank but the problem is you can be overcautious with your money and therefore miss out on opportunities to make your money work better for you. You can improve your confidence with money by learning as much as you can about investments and seeking expert advice from a trustworthy person on what is secure and what is not.

 

Are you an Achiever?

 Achievers are relatively conservative but with a strong desire to succeed and to create wealth. They are quite analytical and cautious in their approach. They are usually either well educated or well read and often they have highly paid professional jobs or ambitious career plans. Achievers are status conscious and will spend money on things that create an impression of affluence and success, such as a home in one of the better suburbs, an expensive car, private school education for their children, designer clothes, home improvements and overseas holidays. While their spending is high, it is usually on items that have a lasting value. Sometimes Achievers fall into bad habits such as spending money they can’t afford on others, feeling as though they have to live up to an image, or being embarrassed about people knowing their real financial circumstances. If you are an Achiever, the challenge for you is to have the look of affluence without spending all your money and increasing your level of debt. Rather than a wardrobe full of designer clothes, buy a few quality items and mix them with cheaper ones; instead of redecorating the whole house, do just one or two rooms; if you can’t afford to eat in the best restaurants, go there for coffee and dessert.

 

Are you an Entrepreneur?

Entrepreneurs are the true creators of wealth, who are prepared to take an initial high level of risk in the expectation of high returns.  Once they achieve high returns from an opportunity they will stick with it until the returns begin to fall. They can succeed despite having low assets or income. If you are an Entrepreneur you will not feel restricted by a lack of money. If you don’t have money of your own, you will use someone else’s!  Money for you is what gives you choices in your life and enables you to fulfil your passion. As an Entrepreneur you will use money to help you excel, for example to set up your own business, pay for education, embark on a new venture. Your spending will therefore be on things that produce a return or add to your ability to create wealth. In this respect you will be different from Achievers, who spend on lifestyle assets rather than income producing assets and Thrill Seekers, who spend money on things that give instant pleasure. Entrepreneurs typically seek out other like minded people to do business with or to seek advice from. To have credibility with an Entrepreneur, you need to be an Entrepreneur yourself – they see themselves as being different, even superior, to other people. Unfortunately, Entrepreneurs can sometimes fall into bad habits with their money, so that debts can quickly pile up and budgeting can fall by the wayside. The challenge for Entrepreneurs is to combine their ambition with careful budgeting! The fortunes of an Entrepreneur can vary between extremes. As an Entrepreneur, you can be a millionaire one year and bankrupt the next. This can be averted by putting some of your acquired wealth into safe assets rather than continuing to risk all of it. That way, when things go bad you have something to fall back on.

 

Are you a Thrill Seeker?

Thrill Seekers are gamblers who take risks for the sheer enjoyment of it and who would rather continue taking new risks than accumulate wealth. Thrill seekers often have a high level of income that is used for short term satisfaction rather than wealth accumulation. Thrill Seekers live by the motto, “easy come, easy go”. Money is a source of instant gratification and is to be used here and now rather than accumulated. Credit cards will be used up to the limit. The mortgage will be extended to pay for an overseas holiday. A day out shopping and spending lots of money gives a Thrill Seeker a real buzz. Sometimes, the purchases made will be unnecessary or even unwanted items, but the thrill of the purchase makes it worthwhile. While Achievers also high spenders, they tend to spend money on things that have a lasting value, whereas Thrill Seekers will spend money on just about anything, providing it gives instant satisfaction. Once the thrills have worn off, Thrill Seekers often feel remorseful about their actions and overwhelmed by their level of debt. If you or your partner is a Thrill Seeker, you will need to have strict controls on the amount of credit you have. Any savings should preferably be made into a product where the funds are not accessible in the short term. 

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