A new study suggests kind people are more vulnerable to financial hardships — particularly bankruptcy — because they don’t care as much about money as their “less agreeable peers.”
What are the details?
In a paper published by the American Psychological Association, researchers from Columbia Business School and University College London School of Management used data from a series of studies to determine whether or not agreeable personalities were at greater risk of struggling financially due to lax negotiation styles and placing a lower importance on money in their lives.
Using a pool of more than 3 million participants, co-author Joe Gladstone said, “We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates.
“This relationship appears to be driven by the fact that agreeable people simply care less about money and therefore are at higher risk of money mismanagement,” he continued.
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In comparing two areas with similar income levels in the United Kingdom, the authors found that nicer individuals were 50 percent more likely to end up in bankruptcy court.
Another cohort included in the analysis showed a relationship between showing kindness as a child and facing a higher propensity for financial challenges as an adult.
But the Mirror pointed out that not all nice people are at risk. Those with higher incomes were able to compensate for their bleeding hearts, but folks with lower incomes simply can’t afford to do so, hence resulting in higher vulnerability rates for nice, poor people.
What did they use to determine kindness?
Participants were asked a series of questions related to their own personalities, such as how much they agree with the statements: “I see myself as someone who is sometimes rude to others;” “I see myself as someone with a forgiving nature;” and, “I see myself as someone who is considerate and kind to almost everyone.”
The answers were measured against financial survey questions regarding savings, defaults, investments and other gauges of money habits.
“Our results help us to understand one potential factor underlying financial hardship, which can have serious implications for people’s well-being,” lead author Sandra Matz told the APA. “Being kind and trusting has financial costs, especially for those who do not have the means to compensate for their personalities.”