Loving Money May Not be the Best Thing For Your Finances

The bigger the love of money, the bigger the losses. More than half of retail investors surveyed who scored high on the State Street Center for Applied Research's 'love of money' scale actually have worse financial outcomes. The inverse is also true with investors that have a low love of money score making better investment decisions resulting in better financial outcomes. The State Street Center for Applied Research surveyed 3,600 consumers across 20 countries and found that money lovers' emotional attachment to money exacerbates their behavioral biases leading to worse financial decisions and likely worse financial outcomes. According to the survey, so-called money-lovers are less likely to contribute six percent or more to a defined contribution retirement plan and more likely to agree that saving is 'something they can do later in life'. They also tend to suffer from greater levels of short-termism. For example, they would rather take the $1000 now versus wait 5 years for $1900 which would equate to more money in their pocket.