I wrote a guest post for my dear friend Satan (Mr. AE: “Long Story, I am Satan”) from Apathy Ends. I wrote a small prequel of why my husband was so against investing and why it took me a week of tantrums to get him to start investing. It is a prequel to how I believe dumb luck contributed to our current financial standing.
Here’s a preview:
Why would a parent not teach their child something as important as having your money work for you?
I’m also summarizing the four basic investor personality archetypes so if you’re here first, read me first.
Four General Characteristics:
Financial wet blankets. My husband and I are both preservers. We hold large sums of cash as our “emergency fund” primary because we end up collecting (like squirrels for winter) money since we hesitate almost any sudden financial movements until we’re near certain – sad part is – nothing is certain.
Perma-bull types. Accumulators are usually natural born leaders. They are quick to pounce and confident enough to sway others in the process. Overconfidence can be proven to be some accumulators’ undoing.
Combine the uncertainty of the preservers with the greed of accumulators and you have followers. They tend to be the victims of ludacris runaway bubbles. These investors rely on peer influence than their own financial research. Followers are usually the ones left holding the baggage when the music stops.
Highly methodical investors who demonstrate a strong understanding of finance and is able to stake a bet on it. Individuals are your doctors, engineers and successful business owners with a high attention to detail. They do not second guess because they did their homework already. This can lead to overconfidence because individualists can unknowingly create feedback loops that are self fulfilling.
Like I’ve mentioned before, my husband and I are preservers. It would seem like he has all the talents of an individualist just like his father and his grandfather but with one large exception. Anxious personality and a bias against action.
Hey, no love lost here. I’m the same way. We’re both careful people which comes with its own set of pros and cons.
It’s also important to note that everyone can be a varying degree of more than one archetype on a continuous spectrum with none completely adept from failure. For example: if a follower gets lucky enough following the right people, he could make some decent chump change with little work.
I made a pretty graphic for your entertainment. It took me hours (for reasons directly related to my darling husband trying to distract me). The full size is available from the freebies tab if you needed 800 x 2000 HD.
OK that was the primer! The rest of the tale can be found here:
What investor personality type(s) are you?