This article was first posted October 1, 2000.

When we did the Retire Early Personality Survey back in March on the Motley Fool Retire Early Home Page message board, I wrote that it would be interesting to see a study of which Myers-Briggs personality types are best at handling their money. There seems to be ample evidence that education and "brains" don't necessarilty correlate with the ability to manage one's finances. (I know several MBAs that graduated from business school with me 20 years ago that are no closer to retirement today than the day they entered college.) Personality and "temperment" may explain the differences in outcomes that fly in the face of what we would expect with a degree from an elite university and high SAT scores. Financial Planner (and part-time minister) Ray Linder answers some of these questions in his new book What Will I Do With My Money? -- How Your Personality Affects Your Financial Behavior. While some may be annoyed with Linder's frequent biblical references (and others may feel he doesn't mention God enough) he presents some useful ideas that tie-in very nicely with our Myers-Briggs Type Indicator survey on the Motley Fool.

Part One of the book, "The Meaning of Money", is an in depth discussion of the emotional aspects of money. I particularly liked the author's Six Financial Fallacies (Chapter 3) -- namely that money can buy you Achievement, Freedom, Respect, Power, Security, or Happiness. Personally, I've found that money can buy you lots of freedom, but I agree on the other five points.

Next Linder moves on to describe the "Five Financial Pathologies" (Chapter Four) (i.e., Overspending, Hoarding, Using Money to Control Others, Using Money to Gain Approval, Inabilty to Receive Money.) Not exactly the Four Horseman of the Apocalypse, but just about everyone will find something on this list they likely could improve on.

The real meat of this volume begins in Part Two where Linder covers "Your Personality and Money." Using the Myers-Briggs Type Indicator as a guide, he divides the population into four "Money Personality Types":

• The Protector - These folks value structure and security. They may be the most "risk adverse" of the four types.

• The Pleaser - Pleasers have the most empathy and concern for others. They may often favor working on "social causes" rather than pursuits that result in financial gain.

• The Player - This type lives for the moment. Players seek "instant gratification" rather than "long-term rewards."

• The Planner - In contrast to Players, Planners have the ability to "look to the future" and delay gratification. They are also the most "independent" of the four types.

Using Linder's four "Money Types", the table below compares The Retire Early Sample with a large sample of Web Users. Not surprisingly, Planners appeared twice as frequently in the Retire Early Sample, while Pleasers dropped from 39% to 12%. No doubt a measure of selfishness and self-interest is required for early retirement.

Chapters 8 and 9 discuss "Marriage and Money" and how to talk to your spouse about finances -- no doubt the source of much marital discord. Chapter 10 explains how to "custom-tailor" your career choice through the knowledge of your Myers-Briggs type. (Here's a link to the career preferences for each of the 16 types, see http://knowyourtype.com/career.html .)

Chapter 11 discusses "Modifying Your Money Style." I don't know how easy it is to get "a leopard to change his spots", but the author makes an attempt. It may be useful for those that see a need to change their approach to the family's finances.

The last chapter quotes a little scripture and makes the case for "the Bible as a guidebook on money".

Throughout the book Linder provides some quizes and exercises designed to determine the reader's Myers-Briggs type. Those who have already taken one of the many Myers-Briggs tests available on-line may be able to skip these.

Those who've found the Retire Early Home Page Personality Study interesting and useful will enjoy this book. Those that place these Myers-Briggs studies on par with horoscopes and fortune tellers should avoid it. Retire Early rates What Will I Do With My Money? 4 stars.

Update on the Retire Early Personality Survey Results

As promised back in May, I've updated the Retire Early Personality Survey results to include data collected since the study was first released last March. By late August 2000, 180 people responded to the survey on the Motley Fool Retire Early Home Page board:

A) 45 respondents were retired and liked it.

B) Not surprisingly, none of the respondents retired, didn't like it, and returned to work.

C) 131 respondents were not yet retired but sure they would like it when they do retire.

D) 4 respondents were not yet retired and wanted to keep working.

Analysis of the Results

The table below on MBTI types shows a breakdown of the percentages of each of the 16 types in the population at large. The "IN--" types represent only about 4% of the population at large. The most common types are "ES--", representing about 52% of the population at large. Since the "Retire Early" group comes from a subset of the "world population" we can call "Internet users", it would be more useful to draw comparisons with the personality types of Internet users. The combined figures for two large studies of Internet users who completed personality tests on-line are referenced in the table (i.e.,“Web Users”).

Of the 180 responses received to date, four respondents indicated that they were not retired and planned to keep on working. The remaining 176 respondents were either retired and liked it (N=45), or trying to retire and were sure they'd enjoy it once they get there (N=131). Of these 176 responses that were favorable to early retirement, three personality types stood out; ISTJ - 57 responses, INTJ - 38 responses, and INTP - 23 responses. These three personality types make up about 8% of the population at large, but account for 67% of the respondents favorable to early retirement. There may be a trend here. See the following chart “Comparison of several large studies vs. Retire Early survey.”

It appears that the average Internet user is more introverted than the population at large. (Note: Myers-Briggs defines "introvert" as "inner-directed" (i.e., one who "gets their energy from within") rather than from the stimulus of other people. In this context, "introvert" doesn't necessarily mean "shy and retiring.") While the world population is only 28% "I", the Internet users averaged about 48% "I". The Retire Early group was even more introverted, with 89% of the sample composed of "I" types.

Comparison of several large studies vs. Retire Early survey.

Another concern was the fact that the Retire Early group may contain a lot of "dot-com rich" computer professionals, thus making it difficult to conclude that there is a discernable difference between programmers and the "early retired." A study of the personality types of computer science professionals revealed that ISTJ was the most common type. However, while the ISTJ personality type was the most frequent "computer" personality type, it appeared even more frequently in the Retire Early group. The INTJ and INTP personality types appeared no more frequently among computer professionals than the large reference groups of Internet users. Since ISTPs, INTJs, and INTPs appear much more frequently in the Retire Early sample than the Internet "Web users" or "computer science" samples, it's probably safe to conclude that these three "types" are more likely to enjoy early retirement.

Calculating the ratio of the appearance of each Myers-Briggs type in the Retire Early sample versus the percentage of each type in the reference groups yielded some interesting results. The ISTJ and ISFP types appeared more frequently in the Retire Early sample than the “Web Users” reference group. These results are illustrated in the bar chart at below.

Plotting the data in reference to "Web Users" and the "Population as a Whole" revealed five personality types dominated the results. INTJ, INTP, ISFP, ISTJ, ISTP made up 76% of the Retire Early sample, but only 25% of the "Web Users" group. It's also interesting to note that INTP and INTJ appeared in the Retire Early sample from 12 to 22 times more frequently than the "World" sample.

For the original results published in May 2000, click here.