Can your genes make you rich or poor?
If you paid attention during school biology classes, you may remember learning that we inherit certain genetic traits from our parents. These determine characteristics like hair and eye colour, height and body shape.
When it comes to making poor financial decisions, can your genes affect your financial future? Does that mean we should blame our parents?
Can genetics play a role in how we make financial decisions?
Professors Nicos Nicolaou and Scott Shane, authors of “Is the tendency to engage in entrepreneurship genetic?” think so. In their study published in January 2020, they said:
“Our findings that a genetic predisposition to risk-taking preferences and choices exists in many different domains, from financial investment choices to taking career risks, offers a novel explanation for the similarity in risk-taking behavior between parents and children. Children may adopt similar approaches to driving, and choose similar sports, occupations or ways of investing because they share the same genetic composition as their parents, rather than because they learned these preferences and approaches from their parents or because they share a common culture.”
Can the most inheritable traits be changed?
The good news is that changes in mindset and financial education can dramatically offset genetic predispositions towards safe and familiar financial decisions or risky uncharted ones.
Even the most highly inheritable of these traits are influenced by a person’s implicit agreement with them, whether conscious or unconscious.
Genes don’t cause behavioural or personality traits
As authors Baumeister and Vohs say when discussing genetic influences on social behaviour: “Contrary to a common misconception, genes do not cause behavioural or personality traits, they only influence them.”
“People’s thought patterns, particularly subconscious ones, are more important in influencing behaviour than the genes they’ve inherited.”
With the right tools, it is possible to shift inherited beliefs, patterns and actions, and break the shackles of the pre-conditioned nature of genetics to create financial results that exceed previous limitations.