Personality, motivation, and financial risk tolerance
Siedor, Lane Elizabeth
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Over 200 million Americans are hoping to increase their wealth beyond their own daily labor by investing in a marketplace. Almost all financial investments involve risk. Thus, understanding risk is essential to describing how people manage their money. Therefore, the goal of this dissertation is to better understand individual differences in financial risk tolerance in terms of basic psychological traits and motivations, especially the five factor personality model and approach/avoidance traits- concepts that have largely been left out of the financial risk tolerance literature. The findings from this study suggest that the inclusion of the personality and basic motivation enhance our understanding of financial risk tolerance and financial risk taking. Specifically, the personality trait Neuroticism and the motivation dimension Reward Responsiveness provide unique information about these core concepts and therefore advocate for their inclusion in theories of financial risk tolerance.