Do your genes influence your financial decisions?

Your genes don’t just determine your hair color and skin tone. They likely influence your financial decisions. Researchers examined the investment decisions of identical twins because they share the same genes. They found that even when these twins grow up in separate locations, they invest in a similar manner, illustrating that genes can shape our financial decisions.

In fact, researchers have discovered that genes may even influence your credit score. In one study, they examined how variants of the 5-HTTLPR gene affect how people make investment choices. People who had one variant of this gene were more risk averse, had fewer credit lines, and indeed, higher FICO scores. Incredibly, in this study, 93 points (or 17 percent) of someone’s credit score was influenced by their genes. To be sure, not everyone acted according to genes, but it’s important to recognize how there are biological factors that shape our financial decisions. The next time you make a poor investment decision, blame your parents. It’s their gene pool, after all.

I came across these “neuroeconomic” studies while researching my book "Coined: The Rich Life of Money And How Its History Has Shaped Us." Neuroeconomics is an emerging field of economics, in which neuroscientists study how people make financial decisions – or at least, what’s going on in your brain when you think about money. For example, researchers scanned the brains of people who are about to make money and folks who are high on cocaine. The scans are almost identical. They even scanned the brains of men who were presented images of dead bodies, naked women, and money. What elicited the most excitement in the brain? Money.

But not everyone thinks about money in the same way. I traveled to over twenty-five countries while researching my book, in order to understand how folks in different societies think about money. In Japan, for example, you say arigato to thank someone. But this word translates to “this difficult thing.” In other words, many Japanese people are reluctant to receive a gift because it creates an obligation or social debt. In the United States, there is one Wall Street CEO who keeps a list of people whom he owes and who owe him in his suit pocket. Every society, every group, has its quirks when it comes to money and debt.

So, what influences your financial decisions? Your cells and your community.

Kabir Sehgal is the author of New York Times and Wall Street Journal bestseller "Coined: The Rich Life of Money And How Its History Has Shaped Us."