--- title: Study Shows People Who Work Hard May Be Bad Investors description: A new consumer psychology study shows people who work hard on the job may be likely to invest less and avoid risk too much with investments. authors: - name: Sarah Hansen role: Senior Writer url: https://money.com/author/sarah-hansen/ bio: Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes. education: Northwestern University, New York University at_money_since: 2021 articles: 347 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes social: - https://www.linkedin.com/in/sarah-m-hansen/ former_staff: true editors: - name: Brad Tuttle role: Senior Editor url: https://money.com/author/brad-tuttle/ bio: Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals. education: Columbia University School of Journalism, MS at_money_since: 2014 articles: 366 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology social: - https://twitter.com/bradrtuttle - https://linkedin.com/in/brad-tuttle-834b225 former_staff: true published: '2023-06-14T20:50:48.000Z' modified: '2024-04-17T13:10:40.000Z' section: Investing tags: - News - stocks word_count: 493 canonical: https://money.com/people-work-hard-bad-investors-study/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Illustration of a happy turtle riding on a steady rising stock graph](https://img.money.com/2023/06/News-Why-Hard-Workers-Avoid-Risk-Invest-Less.jpg?crop=0px%2C273px%2C2880px%2C1620px&quality=85) Giving it your all at work? You might be making more conservative [investing decisions](https://money.com/why-investing-should-not-feel-exciting/) — and losing out on valuable [retirement income](https://money.com/retirement-do-over-common-regrets/) — as a result. A new study published in the *Journal of Consumer Psychology* finds that people who exert more effort to earn their money are more cautious when it comes to their investments. “Consumers feel greater psychological ownership over their earnings when they work hard for them,” lead author Christopher Bechler, a marketing professor at Notre Dame, explains in a [blog post](https://news.nd.edu/news/working-hard-for-money-decreases-consumers-willingness-to-risk-their-earnings-study-shows/). That “makes them value these earnings more and be more averse to losing them,” he says. “So, they choose less risky investments and invest less.” The study’s authors, who also include Samina Lutfeali, Szu-chi Huang and Joshua Morris of Stanford University, say that this finding runs contrary to popular wisdom. Most people would assume that hard workers tend to have higher incomes and a higher level of financial literacy and are more comfort with financial risk. Instead, the researchers found the opposite was true. To gather their data, the researchers had their participants complete a series of tasks requiring a varying amount of effort — like transcribing Dutch poetry or repeatedly pressing a key on their keyboard — for money. Afterwards, they were given a variety of [options to invest their money](https://money.com/best-investment-stocks-real-estate-or-gold/) and they could also opt out of investing. In the end, participants who had to work harder for their earnings (i.e., they had to transcribe more lines or push the key more) were more conservative with their investment choices. ## How to encourage hard workers to invest more Theoretically, these findings illustrate the risk that consumers’ hard work — especially in the aftermath of the COVID-19 pandemic, amid high inflation and stagnant wages — could undermine their own financial futures, the researchers conclude. They also help explain why consumers don’t accumulate as much wealth as they could, Bechler says, “especially when times are hard.” Experts agree that investments in retirement accounts like [401(k)s](https://money.com/what-is-a-401k-rollover/) are among the best ways to build wealth over the long term, and Bechler says the study’s results point to the importance of tools that make investments in those sorts of plans automatic. Many employers now automatically enroll their employees into retirement plans, for instance, often with a default contribution of around 3% or 4%. (And starting in 2025, that automatic enrollment will be mandatory for many employers.) Big brokerages like [Fidelity](https://money.com/fidelity-review/) and [Vanguard](https://money.com/vanguard-review/) also offer automatic programs that take all the guesswork out of investing money for retirement or other goals. The researchers say tools like these can prevent workers’ attachment to their hard work from getting in the way of the responsible risk-taking that’s necessary to build wealth over the long term. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/people-work-hard-bad-investors-study/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Investors", "item": "https://money.com/investors/" }, { "@type": "ListItem", "position": 4, "name": "Study Shows People Who Work Hard May Be Bad Investors" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/people-work-hard-bad-investors-study/#webpage", "url": "https://money.com/people-work-hard-bad-investors-study/", "name": "Study Shows People Who Work Hard May Be Bad Investors", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-06-14T20:50:48.000Z", "mainEntity": { "@id": "https://money.com/people-work-hard-bad-investors-study/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/people-work-hard-bad-investors-study/#breadcrumb" }, "dateModified": "2024-04-17T13:10:40.000Z" }, { "@type": "NewsArticle", "headline": "Study Shows People Who Work Hard May Be Bad Investors", "articleSection": "Investing", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/06/News-Why-Hard-Workers-Avoid-Risk-Invest-Less.jpg?crop=0px%2C273px%2C2880px%2C1620px&quality=85", "width": 1012, "height": 569, "caption": "News-Why-Hard-Workers-Avoid-Risk-Invest-Less" } ], "author": [ { "@type": "Person", "name": "Sarah Hansen", "url": "https://money.com/author/sarah-hansen/", "@id": "https://money.com/author/sarah-hansen/#author", "description": "Sarah Hansen is a senior writer at Money covering all things personal finance. Previously, she covered economic policy and capital markets on the breaking news desk at Forbes.", "image": "https://img.money.com/2021/10/a_sarah-hansen.jpg?quality=85&w=400&h=440&crop=1", "email": "sarah.hansen@money.com", "alumniOf": "Northwestern University, New York University", "sameAs": [ "https://www.linkedin.com/in/sarah-m-hansen/" ] } ], "publisher": "https://money.com/#organization", "datePublished": "2023-06-14T20:50:48.000Z", "description": "A new consumer psychology study shows people who work hard on the job may be likely to invest less and avoid risk too much with investments.", "abstract": "A new consumer psychology study shows people who work hard on the job may be likely to invest less and avoid risk too much with investments.", "@id": "https://money.com/people-work-hard-bad-investors-study/", "inLanguage": "en-US", "dateModified": "2024-04-17T13:10:40.000Z", "editor": [ { "@type": "Person", "name": "Brad Tuttle", "url": "https://money.com/author/brad-tuttle/", "@id": "https://money.com/author/brad-tuttle/#author", "description": "Brad Tuttle is a former senior editor at Money with over 10 years’ experience covering a vast number of personal finance topics, including careers, cars, travel, budgeting, investing, insurance, credit cards, consumer psychology, real estate, banking, and shopping and deals.\r\n\r\n", "image": "https://img.money.com/2014/01/Brad-Tuttle.png?w=226&h=247&crop=1", "alumniOf": "Columbia University School of Journalism, MS", "sameAs": [ "https://twitter.com/bradrtuttle", "https://linkedin.com/in/brad-tuttle-834b225" ] } ], "wordCount": 493, "keywords": [ "News", "stocks" ], "about": [ { "@type": "Thing", "name": "Investment", "sameAs": [ "https://en.wikipedia.org/wiki/Investment" ] }, { "@type": "Thing", "name": "Investor", "sameAs": [ "https://en.wikipedia.org/wiki/Investor" ] } ] } ] } ```