Your Genetic Makeup and Emotions Could Impact Your Financial Decisions

Have you ever wondered why some people feel comfortable taking risks with their money, while others prefer to play it safe? It turns out that your genes, the tiny parts of your body that pass down traits from your parents, might have something to do with it. New research suggests that specific genes related to emotions could affect how you make financial decisions.

Imagine you have $10,000 to invest. Would you put it in stocks, which can be risky but have the potential for big rewards? Or would you choose bonds or a savings account, which might not offer as much profit but are safer? Your choice might be connected to your genes.

Scientists have found that certain genes linked to feelings of anxiety can influence how we make financial choices. When people have a combination of these genes, they tend to worry more. This worry can lead to making safer decisions with money. This research was done by a group of experts, including Stanford psychology Associate Professor Brian Knutson and Northwestern University’s Camelia Kuhnen.

These scientists looked at how our brain and emotions work together when we make choices. They discovered that two genes, called serotonin and dopamine, play a role. These genes are like messengers in our brain that affect how we feel. They can make us feel good or anxious.

The scientists found that people with certain variations of the serotonin gene are more likely to worry a lot. This gene comes in two types: short and long. Everyone has two copies of this gene. Depending on the combination of short and long versions, scientists call it a genotype. People with two short versions of the gene tend to be bigger worriers, while those with two long versions worry less.

To understand how these genes influence financial decisions, the researchers gave $10,000 to a group of volunteers. They were asked to decide how to split the money between stocks, bonds, and cash. Those with two short serotonin alleles were more likely to keep a bigger portion of the money in cash, which is a safer option. In contrast, those with two long alleles were more willing to put money into stocks, which can be riskier.

The scientists also looked at how our brains react when we face risky choices. They found that people with the short serotonin gene felt more anxious before making a decision, even though they reacted similarly to those with the long version when things didn’t go well.

The bottom line is that our genes can influence how we think about money and take financial risks. But the good news is that we’re not completely controlled by our genes. By understanding how our genes and emotions work together, we can become better at making money choices. So, next time you’re worried about making a financial decision, remember to take a step back and think about the actual risks and rewards. Your genes might play a role, but you still have the power to make smart choices.