In a previous blog, we wrote about the affects of psychology on investing. We believe financial strategies ought to be rooted in math, yet catered to client's individual goals, principles, and even their personality. 

You've no doubt participated in some sort of personality test like Myers-Briggs, StrengthsFinder, DISC assessment, or others. Many people are fascinated with identity stories that help them understand who they are, their role in the world, how they relate and interact with others, all with the goal of knowing their true Self. Because of this fascination, the Enneagram has emerged as another popular personality identifier in our culture.

If anyone has ever referred to you as a One, Five, or Nine, they're most likely referring to the Enneagram, which is a type-system that assigns your personality a number of 1-9. The goal is not to become a certain number or "advance" to a 9. Each number is its own personality identifier, and each comes with its own strengths and weaknesses (or maturities and immaturities). The goal, then, is to become the best version of yourself by growing out of your immaturities and into your maturities.


It may not be immediately obvious as to why personality identifiers matter when it comes to financial consulting. But we believe that knowing yourself - your type - makes you aware of the intricacies of your own habits, lifestyle, and motivations. Your personality type may be prone to make financial planning mistakes that others don't make. Thus certain recommendations may be great for one personality type and terrible for another.

What follows is a breakdown of the Enneagram types* and a few thoughts on how a financial strategy might be specifically catered to each one. 


TYPE 1: Ones are conscientious and ethical, with a strong sense of right and wrong. They are teachers, crusaders, and advocates for change: always striving to improve things, but afraid of making a mistake. Well-organized, orderly, and fastidious, they try to maintain high standards, but can slip into being critical and perfectionistic. They typically have problems with resentment and impatience.*

Ones will most likely be motivated by a financial strategy that is rooted in the best mathematical concepts and proven to produce the best results, and deflated by strategies that are unproven or high-risk. Ones will need reassurance, especially in times of market downturn, that their strategy is still the best approach given the current context. They might also want to know the details of the investments they make in order to ensure that their money has been put toward businesses with high ethical standards and practices. 

TYPE 2: Twos are empathetic, sincere, and warm-hearted. They are friendly, generous, and self-sacrificing, but can also be sentimental, flattering, and people-pleasing. They are well-meaning and driven to be close to others, but can slip into doing things for others in order to be needed. They typically have problems with possessiveness and with acknowledging their own needs.*

Twos naturally want to make sure the people they love are cared for, sometimes to a fault. So they will most likely prioritize things like estate planning, specifically wills or trusts. Twos will be motivated to stick to a financial strategy that includes generous, charitable giving and thought for their loved ones, and deflated by strategies that only focus on their personal future and investments. Because of that, they may need occasional reminders to use portions of their income on themselves in areas like risk management and retirement.

TYPE 3: Threes are self-assured, attractive, and charming. Ambitious, competent, and energetic, they can also be status-conscious and highly driven for advancement. They are diplomatic and poised, but can also be overly concerned with their image and what others think of them. They typically have problems with workaholism and competitiveness.* 

Threes associate their identity with success. Therefore, they will be motivated by a financial strategy that maximizes the appearance of success in their eternal quest to keep up with the Joneses, and deflated by strategies that require large amounts of patience or living below their income level. The future is not always in view for Threes, so they often need reminders to stay the course, even at the expense of a larger house or nicer car. 

TYPE 4: Fours are self-aware, sensitive, and reserved. They are emotionally honest, creative, and personal, but can also be moody and self-conscious. Withholding themselves from others due to feeling vulnerable and defective, they can also feel disdainful and exempt from ordinary ways of living. They typically have problems with melancholy, self-indulgence, and self-pity.*

Fours see themselves as unicorns - unique, misunderstood individuals who express themselves in non-traditional ways. Fours will be motivated by non-traditional financial strategies that allow them to pursue their unique way of living, and deflated by strategies that put them in a cookie-cutter box along with everyone else. They will require extra motivation to be charitable since immature Fours are prone to high levels of narcissism and self-focus. 

TYPE 5: Fives are alert, insightful, and curious. They are able to concentrate and focus on developing complex ideas and skills. Independent, innovative, and inventive, they can also become preoccupied with their thoughts and imaginary constructs. They become detached, yet high-strung and intense. They typically have problems with eccentricity, nihilism, and isolation.*

Fives draw their identity from their ability to gather data and process it for unconventional outcomes. They will have typically done extensive research into the best possible financial scenarios for themselves. They will most likely be motivated by strategies that utilize unconventional, creative approaches, to gain high returns, and will be deflated by a strategy that has been given little thought or uses less-than-ideal approaches. Fives can be charitable, but they are more likely to give to organizations that match their need for outside-the-box approaches to problem solving.

TYPE 6: The committed, security-oriented type. Sixes are reliable, hard-working, responsible, and trustworthy. Excellent "troubleshooters," they foresee problems and foster cooperation, but can also become defensive, evasive, and anxious—running on stress while complaining about it. They can be cautious and indecisive, but also reactive, defiant and rebellious. They typically have problems with self-doubt and suspicion.*

Sixes' identity comes from their ability to predict and avoid pitfalls. As natural skeptics, they will be motivated by financial strategies that are low-risk and best-suited to ride out the worst of market fluctuations. They will be deflated by high-risk investments or strategies that do not take downturns into account. They will be wide open to conversations about risk management and estate planning, but may need motivation to use income toward charitable organizations.

On a practical level, more than 50% of the world are Type 6, which operate and function in society out of fear and worry, hence the reason fear based tactics in marketing are so commonly used. Though small-cap as a market category has averaged the highest return since the market's inception, it is an incredibly volatile category. To have a six invest in a portfolio that is heavily weighted in aggressive investments may produce the best recommendation and long-term outcome. However, if they withdraw money when markets fall because they fear it will crash and wish to invest when the markets are rising for fear of missing out, then it becomes the worst recommendation and long-term outcome.

TYPE 7: Sevens are extroverted, optimistic, versatile, and spontaneous. Playful, high-spirited, and practical, they can also misapply their many talents, becoming over-extended, scattered, and undisciplined. They constantly seek new and exciting experiences, but can become distracted and exhausted by staying on the go. They typically have problems with impatience and impulsiveness.*

Sevens' identity is rooted in their optimism. Sevens will most likely be motivated by high-risk strategies that, if successful, will produce massive returns. They will be deflated by strategies that play it safe. Sevens will need extra motivation to allocate funds to areas like risk management and estate planning since they are not wired to prepare for worst-case-scenarios. Sevens will resist it, but they would benefit more than any other type from an automated financial strategy that limits their impulsiveness. 

Again, on a practical level, it would be mathematically preferable for the seven to choose a 30-year mortgage and save the excess amount he would have paid each month for the 15-year mortgage. But, because of their personality tendencies, it might make more sense for a seven to go with the 15-year mortgage because the excess cash flow may end up funding the next adventure, like a vacation. Choosing the 30-year mortgage ends up going from the best recommendation in a scenario where the excess cash flow is saved to being the worst recommendation for the client in the scenario where it’s not. 

TYPE 8: Eights are self-confident, strong, and assertive. Protective, resourceful, straight-talking, and decisive, but can also be ego-centric and domineering. Eights feel they must control their environment, especially people, sometimes becoming confrontational and intimidating. Eights typically have problems with their tempers and with allowing themselves to be vulnerable.*

Eights pride themselves on their strength. They will be motivated by a financial strategy that at least gives them the impression of having control, and will be deflated by anything that takes control away. While Eights can be confrontational and intimidating, they are also typically strong advocates for the under dog, making charitable giving a natural part of their financial strategy. An Eight may have trouble accepting advice because they feel it may imply a lack of resourcefulness, question the way they control their environment, and feel like a punch to the ego-centric worldview. The process of giving advice may come across as disagreement and the Eight may become confrontational or domineering to protect their self-confidence. Financial planning with a team of specialist can be difficult for an Eight unless they have matured and see delegation as a resourceful way to control their environment. 

TYPE 9: Nines are accepting, trusting, and stable. They are usually creative, optimistic, and supportive, but can also be too willing to go along with others to keep the peace. They want everything to go smoothly and be without conflict, but they can also tend to be complacent, simplifying problems and minimizing anything upsetting. They typically have problems with inertia and stubbornness.*

Nines are peacemakers and draw their identity from their intense ability to see valid reasoning on any side of an issue. Therefore, Nines will be motivated by a strategy that is generated by a trusted source, and deflated by anything that requires them to make a hard decision. Automated plans will typically be welcomed by Nines since it takes them off the hook for making any decisions, either long-term or short-term. 


"But wait," someone might say, "I thought there was a 'best recommendation' for everyone!" 

Well, the "best recommendation" can be determined by math, for a specific scenario, in an ideal world, if you extract the impact of human behavior and assume that every person will allow for a financial structure that facilitates the best outcome. But, as we have said, you cannot eliminate yourself from the equation. You have to accept the reality of who you are and make decisions based on what will make your personality type most successful. If the ideal, mathematically best recommendation is unlikely to be carried out with commitment because of human behavior, it is no longer the best recommendation.


At this point, you may be asking, "How in the world can you make recommendations and know what is best for someone?" The simple answer is that you can't, unless you know your client. This is why the relationship is so important in the financial planning process. We want to know who you are and more than just what you want, we need to know how you make decisions, your weaknesses, strengths, personality flaws, etc. The better we know you as your financial planner, the more we can help you. 

Knowing your personality means planning in a way that saves you from yourself. If we know how you typically act and react to different situations, we can counter weaknesses with structure and provide flexibility in the plan where you have strengths. If we know you get the itch to change furniture in your house every year, or that you like to change cars every two years, it would be wise to create spending limits to curtail expensive behaviors. For instance, we might create an account specifically for cars and furniture that receives a monthly contribution, and whatever you decide to purchase must be paid for with that account. With this structure, a boundary has been set and the behavior limited, but you still have the chance to do the things you enjoy. 

Not every client needs that same structure or furniture account. That's why we tailor our plans to each person's strengths, weaknesses, habits, and passions.



* - Enneagram type descriptions from