Do nice guys finish last, even in a financial race?
According to research published by the American Psychological Association, being nice may put you at a greater risk for bankruptcy and other financial hardships, compared with your less agreeable peers.
Sandra Matz, PhD, of Columbia Business School and lead author of the study, says her team of researchers 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 had suggested that lower credit scores and income were associated with agreeableness, and this study in particular worked to better understand if that association rang true for other financial indicators.
Using methods like national surveys as well as bank account data and geographic data, Matz and her co-author, Joe Gladstone, PhD, of University College London, analyzed data collected from more than three million participants.
The results? "We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt, and higher default rates," said Gladstone.
The study tried to determine the reason agreeable individuals were more likely to experience financial hardship -- was it because of a more cooperative negotiation style, or something else?
As Gladstone noted, "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."
Even further, researchers compared financial data and publicly available personality data from two United Kingdom areas that both had similar per-capita income levels. They found that the city that scored significantly higher on agreeableness also had a 50 percent higher bankruptcy rate.
Being kind and trusting is important for the betterment of our world, but remember -- agreeable people who place less value on money can be at a financial disadvantage. If you do not have the means to compensate for your personality, being nice can have financial costs.