Nice people more likely to go bankrupt, study finds

WASHINGTON — They say nice guys finish last when it comes to dating, but that might not be the only time that it hurts to lack some edge. A new study finds that nice people may be more likely to struggle financially — even to the point of bankruptcy — than those who are less thoughtful.

Researchers from the Columbia Business School and University College London School of Management say that kinder individuals are more prone to financial hardships because money simply isn’t as important to them.

“We 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,” explains lead author Sandra Matz, an assistant professor of business management at Columbia, in a statement to the American Psychological Association. “Previous research suggested that agreeableness was associated with lower credit scores and income. We wanted to see if that association held true for other financial indicators and, if so, better understand why nice guys seem to finish last.”

For their research, Matz and co-author Joe Gladstone, a lecturer at UCL, conducted a series of studies that, together, involved data from more than 3 million participants. Two studies used online panels of adults from the United Kingdom to learn about their savings, debt, negotiation styles, level of agreeableness, and overall view of money. Another pulled data from a national survey from 2013 that investigated the financial behaviors of households in the UK. The authors also turned to bank account data from a 2014 study hosted by a major UK bank, along with publicly available geographic and personality data from more than 2.5 million people.

Ultimately, they sought to discover whether agreeable individuals were at greater risk of financial problems because of their lax negotiation styles and lower emphasis on the importance of money in their lives.

“We found that agreeableness was associated with indicators of financial hardship, including lower savings, higher debt and higher default rates,” says Gladstone. “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.”

One of the studies, which tracked participants for more than 25 years, showed agreeableness in childhood could even be connected to one’s risk for problems later on in life. That said, the authors found the link was especially prominent among low-income individuals, demonstrating that not all inherently nicer people were equally as likely to suffer from money struggles.

Similarly, when comparing personality and financial data from two areas in the UK with similar per-capita income levels, they calculated that the city with the most agreeable residents had a 50 percent higher bankruptcy rate.

“Our results help us to understand one potential factor underlying financial hardship, which can have serious implications for people’s well-being,” says Matz. “Being kind and trusting has financial costs, especially for those who do not have the means to compensate for their personalities.”

The full study was published October 11, 2018 in the Journal of Personality and Social Psychology.