Wednesday, Feb. 24
Posted 11 a.m. EDT
Can the right set of genes determine if you'll be wealthy? Donald Trump seems to think so.
In an interview with CNN, he proclaims: "Well I think I was born with the drive for success because I have a certain gene ... hey, when you connect two race horses, you usually end up with a fast horse."
Analogies with race horses aside, maybe this just sounds like a lot of one-upmanship from a man who has never proven shy about self-promotion. But investment counselors have long known that some people are more predisposed to taking financial risk than others. And now there is some scientific research that suggests we may be genetically hardwired to make at least a portion of our financial decisions.
There are two schools of thought: Researchers at Northwestern University invited 65 people to put money either in risky or safe investments. The results showed that those with the high-risk version of the dopamine gene (One of the chemicals in the brain that regulates mood, anxiety and addiction) went for the risky investments 25 percent more often than those with the plain-vanilla type of dopamine.
In another study, researchers at Cambridge University found that among London traders, high levels of testosterone translated into higher daily profits.
When it comes to investing, says one of the researchers, factors like education, knowledge and even culture play a part, so we shouldn't rely on genetics to explain why we make good or bad financial decisions.
Still, this new field of study, called neuroeconomics (combining neuroscience, economics and psychology), is intriguing to consider.
Take a quiz to determine how much financial risk you can handle.
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