The wealthy: A financial psychological profile.

Abstract

Drawing from the theories of money ambivalence, cognitive dissonance, envy, and relative deprivation, this study sought to explore stereotypes of the wealthy. Specfically, it examined the financial psychology, demographics, and financial behaviors of a sample of wealthy individuals and a sample of other relatively high-income and high-net-worth individuals, and it compared these characteristics to see what, if any, differences exist. Results show that wealthy individuals exhibited significant psychological differences, including lower levels of money avoidance, loss aversion, and financial stress; higher levels of life and financial satisfaction, financial knowledge, internal locus of control; and a fundamental drive to follow their passions and increase their wealth. With regard to financial behaviors, the wealthy spent significantly more on their most recent purchases but were not more likely to be financially dependent on nonwork income and were not more reclusive. A deeper understanding of the wealthy can help mental-health providers better serve this population and help individuals aspiring to increase their income and net worth by challenging inaccurate beliefs about this population's psychology and financial behaviors.

Money Disorders and Locus of Control: Implications for Assessment and Treatment

“…From those struggling to make ends meet to the wealthy, money can have a profound effect on psychological wellbeing (Klontz, Sullivan, Seay, & Canale, 2015;Mani, Mullainathan, Shafir, & Zhao, 2013). When financial stress adversely impacts financial and psychological health, it is important to rule-out the presence of a money disorder.…”

“…Achievement motivation, in turn, is associated with both better grades in the classroom (Fortier, Vallerand, & Guay, 1995) and higher job satisfaction in the workplace (Wang, Bowling, & Eschleman, 2010). Furthermore, internal LOC has been found to be associated with higher income and wealth (Klontz, Seay, Sullivan, & Canale, 2014;Klontz, Sullivan, Seay, & Canale, 2015;Zagorsky, 2007). In contrast, people with external LOC tend to attribute their actions to fate, luck, or other people (Schultz & Schultz, 2013).…”

Reliability and Convergent Validity of the Klontz Money Script Inventory-Revised (KMSI-R)

“…Items were removed from the KMSI that had factor loadings of less than .40 and that did not significantly contribute to the subscales' Cronbach's alpha. The KMSI-R has demonstrated strong reliability in several large-sample studies (Britt et al, 2015;Klontz et al, 2014;Klontz et al, 2015). The KMSI-R consists of the same four subscales as the KMSI (i.e., Money Avoidance, Money Worship, Money Status, and Money Vigilance) and the KMSI-R consists entirely of select items from the original measure.…”

“…Beliefs about money have been found to relate to self-esteem and self-worth (Hira & Mugenda, 1999) and money is strongly associated with happiness in many cultures worldwide (Diener & Oishi, 2000). A growing body of research has found that beliefs about money are associated with income, net worth, financial health, choice of profession, and a range of healthy and disordered financial behaviors (Britt, Klontz, Tibbetts, & Leitz, 2015;Klontz, Britt, Mentzer, & Klontz, 2011;Klontz, Seay, Sullivan, & Canale, 2014;Klontz, Sullivan, Seay, & Canale, 2015). While the impact of ISSN: 1945-7774 CC by 3.0 2016 Financial Therapy Association 2 financial beliefs on behaviors and financial outcomes cannot be overstated, relatively few empirically-based scales exist to assess money beliefs.…”

“…It was developed using a clinical approach to item creation, which was hypothesized to have increased clinical utility. The KMSI-R is a shortened form of its more comprehensive predecessor and has been used in three studies to date (Britt, Klontz, Tibbetts, & Leitz, 2015;Klontz, Seay, Sullivan, & Canale, 2014;Klontz, Sullivan, Seay, & Canale, 2015). Instead of having items constructed by experts, the items on the KMSI and KMSI-R were generated and gathered directly from financial therapy clients using a variety of techniques, including Money Script Word Associations (Lawson, Klontz, & Britt, 2015).…”