One of the most popular personality measurement systems is the “Jung Typology” test, also known as the Myers-Briggs Type Indicator (MTBI) test. These are popular in Psychology 101 college courses and corporate management seminars. The object of this test is to quantify an individual’s personality along four separate dimensions. Each dimension has two options on either end of the spectrum, and most tests provide a measurement of strength in either direction. This results in 16 separate personality types, with additional nuances due to the strength in the pull of either direction.
If you’re interested in determining your personality type, there is a free test at HumanMetrics.com. The test involves a series of questions designed to determine the root of your motivation. The results are best when the questions are answered quickly at face value, without thinking about choosing the “correct” response.
The first of the four personality aspects measures introversion vs. extraversion. Don’t think of this as whether you’re a loner or a social butterfly; the category has more to do with how you draw your energy. This is from the Wikipedia entry:
People with a preference for Extraversion draw energy from action: they tend to act, then reflect, then act further. If they are inactive, their level of energy and motivation tends to decline. Conversely, those whose preference is Introversion become less energized as they act: they prefer to reflect, then act, then reflect again. People with Introversion preferences need time out to reflect in order to rebuild energy. The Introvert’s flow is directed inward toward concepts and ideas and the Extravert’s is directed outward towards people and objects. There are several contrasting characteristics between Extraverts and Introverts: Extraverts desire breadth and are action-oriented, while introverts seek depth and are self-oriented.
Taking a financial viewpoint, which side of this spectrum is better for personal finance? Here are some thoughts.
Introverts may be more inclined to create budgets and analyze progress over time. The “reflect-act-reflect” method can be interpreted as “budget-spend-evaluate.” Introversion can manifest itself in the way an individual sets goals. Do the goals use internal metrics, like a competition with oneself, or do they focus more on parity with the surrounding culture or community? The latter may be the approach taken by an Extravert.
Extraverts thrive on the energy they derive from being around other people, and as a result, may have a more finely honed ability to use “small talk” and network with other people in larger settings. That could lead to better job opportunities and more money in the workplace. However, 40% of CEOs are Introverts or “closet Introverts.” They’ve learned how to act like Extraverts when necessary while retaining their own personality features.
In The Psychology of Money, the author, Adrian Furnham, cites a 1984 study.
[The study] found that extraverts tended to be more extravagant and less stingy than introverts. People with strong feelings of control over their money reported less general anxiety and tended to be more extroverted.
Managing personal money is a skill that is best tended by the introspective nature of an Introvert. While Extraverts can certainly handle the responsibilities just as well, if defined by their personality type, Extraverts will find introspection draining. Does this mean that Introverts tend to be better money managers?
Not all successful CEOs are extroverts [USA Today]