What’s Your Financial Archetype? The 8 Money Types

Quick show of hands, how many of you are social entrepreneurs out there or you work for a social enterprise? Great. And how many of you are investors or you’re with an NGO, you’re somehow controlling capital or the flow of capital? And how many of you are in academia, impact measurement, or media, or something else? Okay, cool. I’m gonna suggest that the reason we’re all here is to have a lot more impact than we’ve had in the past. Am I right about that?

All right. And yet it seems so difficult to do – like whether we’re part of a family, you know, trying to all get on the same page and have the same strategy, or working in the social enterprise together and trying to also have one strategy. Somehow it seems to come down to more than just the nuts and bolts. More than just business or spending and investing and giving decisions. It’s like something else is driving us. Sound familiar to anybody? 

So for me, I spent a lot of time thinking about this and realizing that this has lots more to do with our money psychology than it does those nuts and bolts. And how do I know this? Well, it starts here where I’m 13 years old. That’s my mom behind me and she had just gone through her second divorce, and that divorce was absolutely shattering to me. I felt in some ways like my stepdad had left me even more than he left my mom, and it led to years – and then decades – of personal growth work and introspection and soul-searching. And then there’s dad – actually there’s three dads. 

So this is biological dad, he ran a furniture factory. This is my stepdad, who was a jewelry manufacturer. And this is dad number three: a psychotherapist. So I had this kind of existential dilemma. On the one hand, I had introspection and self-awareness as the path to liberation or happiness or wholeness, and on the other hand, I had entrepreneurship and business and “make a lot of money and that’ll make you happy.” 

And so I did what anyone in their mid-20s with an existential dilemma would do: I packed up my mullet (that’s the top red arrow in this picture), and my Guinan beads bought at an African drumming festival (that’s the bottom red arrow), and I headed off to India. I had Money and the Meaning of Life in my backpack by Jacob Needleman. And I did a whole bunch of journaling and thinking, and I did a whole bunch of yoga, and I was basically trying to decide: Is it money or is it psychology? Which one is gonna be my key? And – punchline – it’s not an either/or, it’s both.

So I came back to the States and I started a company, Abacus, that incorporates financial advice and behavioral advice. And the really cool thing – the very special thing – about being a financial planner is people tell us things that they’ve never told anyone else.

I remember the multi-millionaire inheritor who confided in me that he stayed up till two or three in the morning sometimes reconciling his Quicken file down to the penny to figure out where the spending was going.

I remember the teacher, who despite her decades of social service, felt guilty about calling the State Teachers Retirement System and saying, “I want to collect on my rightful share of my deceased partner’s pension.” So I did it for her. 

And I remember a client who was the widow of a very early employee of Oracle, whose balance sheet was 98% Oracle stock. And nothing against Oracle – sorry Larry if you’re listening – but that was too much concentration and she knew it. Yet, it was too hard for her to bring herself to diversify because of the guilt and other feelings that the untimely death of her ex-husband had caused. 

So what I realized is people were making financial decisions, or not making them, not based on their current financial situation, but based on these biases and tendencies that seem to come from years ago, ages ago. And so in consultation with psychologists and others, I developed Eight Financial Archetypes.

So I know you’re gonna say “Oh great, another personality typing system.” And I have that same reaction usually. What I’d like to say about this is: number one, they’re fluid, [number two] there’s no hierarchy, [and number three] there aren’t better and worse archetypes. We change over time. We’re usually a combination of one or two or three of them – and I’ve certainly changed a lot in the 15 years or so since I developed these. 

But what’s common amongst all eight is that they all have a positive intention, which as you’re going to see in a few minutes, is the key to creating the cohesion that we want to have in our family systems or organizations or nonprofits. They often have kind of painful emotional states that either are present or we’re using our archetypal behavior to avoid feeling. We sometimes have a distorted money message, almost like a mantra, that plays in our head over and over again unconsciously, and because of that we can create a curative money message that allows us to sort of reverse that programming. 

So I’m going to show you the eight money types right now and I ask you to pay attention to your body and see if you contract as you read any of them. You know, like, “Oh my god, I don’t want to be that one” or “My sister’s that one” or “I love that one.” 

So here they are. I’m gonna read them off to you quickly and then we’re gonna go into them in more detail. So they are: the Saver. the Pleasure Seeker, the Star, the Idealist, the Empire Builder, the Caretaker, the Innocent, and the Guardian. 

So, just from hearing these names, just raise your hand if you had some reaction, you had like an “eh” or “yeah” or anything. [Audience raises hands] Yeah, most of you. And that’s true of all of us. We have these biases. That’s the point of this whole talk, is that we have money biases that we’re often unaware of, and when we get into a financial conversation or transaction with someone, we’re almost always unaware of what their archetypal bias might be, and we generally sabotage whatever it is we’re trying to accomplish together because we don’t validate the positive intention of their archetype.

I’ll say more about that in a minute, but first I’m gonna give you examples of these eight archetypes. And I’m not allowed to use my clients because of SEC confidentiality rules so I’m gonna use my family with their permission. And it’s kind of only fair that I start with myself. So here’s me at 10 years old and I am, or certainly was, a Saver.

First and foremost, back then I remember the day my grandfather took me down to Home Savings of America in Santa Monica and he gave some money to the teller and she handed me back one of those paper passbook savings passbooks. Raise your hand if you are old enough to remember paper savings passbooks. Well, it’s more hands than I thought. I’m like, they’re all gonna be Millennials and no one will know. 

So my name is at the top, the balance is in the right column, and I have this rush of goosebumps and adrenaline like, “Oh, I love saving, I want to save more, this is incredible.” But you know, that didn’t work so well when I was 23 and in $5,000 of credit card debt, and the business transaction I’d been banking on to pay off the debt and get me three months of runway fell through, then the Saver collapses. 

So Savers aim for growth, future security. We’re trying to avoid loss, we’re trying to avoid depletion, declining balances. In an impact sort of lens we’re going to be drawn to things that are savings related: financial inclusion, FinTech, poverty alleviation, and generally I’d say we’re drawn to business or commercial solutions more than nonprofit solutions. If we’re drawn to a nonprofit we want to see like, “Okay, how much follow-on grant capital could come, or if I do a first loss will there be a bunch of other philanthropic money little flow after?” So it’s very future-oriented. 

Next is the Pleasure Seeker, represented by my goddaughter Alexa. She’s 28, and Alexa has amazing gifts as a Pleasure Seeker. A few weeks ago I called her and I said, “Ally, can you help me with my wardrobe?” And she said, “Yeah, yeah, yeah, when? Saturday morning, let’s go!” And in 90 minutes, this young woman was able to do more to my wardrobe than I’ve done in three or five years and she enjoyed every second of it. 

You guys were looking at me like, “What did she do?” Pleasure Seekers, they’re awesome, right? So I’ve had a lot of judgment and bias against Pleasure Seekers most of my life. Now I’m a pretty good one. But Pleasure Seekers seek sensory fulfillment in the here and now. They generally want kind of immediacy, immediate reaction. And so from an impact perspective they are likely to want tangible things. They might invest in food or natural conservation or textiles. They might be more drawn to shorter-term investments, things where they’re gonna see immediate impact rather than the Saver who’s willing to wait a long time. 

Next is the Star. This is my older son Kaden. He’s now 19, off in Washington studying to become a diplomat in the Middle East where he hopes to be very vocal and influential on conflict resolution issues and other issues – which is what Stars love. Stars want to lead campaigns, they want to be vocal. Most of us up here on stage have to have some Star in us or else we probably wouldn’t make it up here. So Stars lead by example.

The sort of poorer functioning version of the Star is where we’re just trying to fill up kind of an emptiness, a hole of wanting to be recognized or get a bunch of likes on social media. But the positive aspect in impact is if you’ve really got a good idea or good business or a good non-profit then you need some star power. You’ve got to attract other people to your movement and that’s what Stars do.

Next is the Idealist, represented by dad number three, the psychotherapist. So Rob has been a humanitarian most of his life. Recently, he wrote a book to transform mental healthcare in the US. He’s donated a bunch of money for cataract surgeries in Nepal. He’s trying to do a housing thing that will affect many, many very low income people across the southwest. 

So, Idealists: their heart is generally part of it but it’s really about massive systemic change. Like they’re aiming for a big change to things. Usually governments, corporations, big establishment institutions are not to be trusted by Idealists. So, the painful emotions, like where Idealists can get stuck, is if they’re just cynical and skeptical about everything. If they’re not that way, then Idealists are amazing because they paint a vision of a future that you want to follow. 

An Idealist/Star combination is generally going to be an amazing leader of an organization. Idealists will often avoid traditional investments, publicly traded investments, because of the mistrust of corporations, government, etc., and aim for more kinds of local, small-scale, tangible investments. 

The Empire Builder. This is my wife, Britta. Britta’s been a childbirth educator for 20 years and most recently has written a book on childbirth and has thousands and thousands of social media followers that she’s trying to get up before the book actually comes out in January. The thing about the Empire Builder is they’ve had some impact but now they really want to expand that impact. They want it to be much bigger, larger than them alone. Sometimes they’re aiming for legacy and this doesn’t have to be for profit. It could be nonprofit, it could be government, but the key is larger than life, larger than just myself. 

The negative side of the Empire Builder is they can be workaholics, they can be domineering. I’m not saying anything about my wife. As a financial advisor, what I often see with Empire Builders is balance sheets that are very concentrated, usually in the industry or company that they know best. 

Let’s move from there to my brother-in-law, Dennis. Today’s his birthday. Happy birthday, Dennis, if you’re watching this stream. Dennis has a young family that obviously requires caretaking but for 19 years he’s also organized us as a family, and hundreds of individuals and dozens of businesses, to go down to Skid Row in downtown L.A. and hand out thousands of hygiene kits and sleeping bags and warm coats to the homeless there. 

Caretakers lead with empathy, generosity, and caretaking, and almost always are going to be drawn to philanthropy first, or at least impact first if it’s on the investment side, concessionary investing, or grants. The painful emotions that Caretakers can feel, or are trying to avoid, are helplessness, guilt, maybe a sense of martyrdom in some families. But I just love combining Caretakers with other archetypes because it brings the heart into the conversation. 

So imagine for a minute that you’re a Caretaker and your family member is a Saver. You’re gonna have to speak some language to them about preservation of capital for the future, and bigger impact in the future, or follow-on capital if we can make this grant right now, rather than just sort of beating the drum that the Caretaker beats alone which is gonna push the Saver away. 

Next is the Innocent. Just two more. The Innocent is my mom. So Innocents have a lot of faith and trust and optimism, but they also generally don’t like the details. Now, in all fairness to my mom, she was a single mom, raised me and my sister through adolescence, and took care of all the details she needed to take care of. But now that she doesn’t need to, she’s got a bookkeeper and a financial advisor and you can see this visible sigh of relief when one of them does something for her that she didn’t have to deal with. 

So Innocents have all this trust and optimism. No deal and no person looks untrustworthy to them on the front end, so you really want to combine them with someone who’s got that kind of skeptical lens. They prefer simplicity to complexity in terms of impact reporting. They’re gonna want narrative stories or videos or things like that over quantitative data.

And at the opposite end of the Innocent is the Guardian. So the Guardian is alert and careful and prudent. This is my stepfather-in-law Ben. And my favorite memory of Ben is sitting in his little 8 x 8 office down the peninsula surrounded by four big four-drawer file cabinets. And he’s working on the general ledger and tax returns of his family-owned business and he’s staying up till 11:00 at night doing the stuff. And I knew he didn’t have to. I knew he could afford to hire someone to do it. But he just was caught into doing it himself. And now he’s transferred to his adult children and has professionals that do a lot of the work, but he’s still frugal and fastidious.

So, Guardians want high due diligence. They want, some of them, to have looked at the worst case scenario. If you’re an entrepreneur and you’re an Empire Builder and you’re lead investor as a Guardian, you better have thought of the worst case scenarios. And you better outline all the details of what that could look like to your Guardian investor. If they don’t feel like you’ve done it then they’re gonna feel like they have to do it for you. 

So, the Eight Financial Archetypes up here again – how many of you felt some resonance with one or more of them? Anybody? Yeah, cool. So what I invite you to do is tomorrow at 11:30, I’m gonna be leading a session that’s an hour long where we’ll go much more experiential than this. 

You’ll take the five minute quiz that’s listed up here – abacuswealth.com/socap – and then we’re gonna organize into groups and we’re gonna actually work on how do we communicate with our opposites? How do we actually create this cohesion of strategy so that we can get on the same page with our family members, our co-workers, our grantees, our grantors, etc., etc. 

So with that, I wish you well and I hope that whatever your financial archetypes are, you can all achieve the impact you dream of. Thank you.