The Role of Money Origins in Shaping Private Investors’ Risk-Taking Propensity

This article explores how the origin of financial resources—such as inheritance, income, or family business succession—affects the risk-taking behavior of private investors. Drawing on behavioral decision theory, we hypothesize that differences in money provenance activate distinct heuristics and cognitive frames, shaping investment decisions. Using a quantitative survey of high-net-worth individuals, we find that family business succession and regular income as a source of money lowers risk-taking propensity, while (cash) inheritance or gifts are associated with a higher risk-taking propensity. These findings contribute to a deeper understanding of how the provenance of financial resources shapes behavioral biases, thus influencing the investment behavior of private investors. Further, these insights offer implications for wealth managers and advisors, helping them tailor portfolio strategies and communication approaches based on the psychological effects of wealth origin.