A study published in the July/August 2006 issue of the European Journal of Social Psychology suggests that powerful people are more likely to take risks. The authors of thestudy theorized that high-powered individuals often benefit when they make choices that are considered high-risk.

The more power these people believe they have, the more risk they are willing to take. However, this behavior can set up an incredibly damaging dynamic. Consider, for instance, the number of scandals that regularly arise involving high-powered executives, wealthy stock-market investors, or political figures.

How power affects relationships 

I’m quite sure that former president Bill Clinton never believed he would get caught when he embarked on an affair with a White House intern. Another psychological effect of constant risk taking is the impact the adrenaline rush that such behavior can provide. These thrill seekers “self-medicate,” and I see in my practice their self-destruction. Individuals who are prone to addictive behavior are in danger of falling into a damaging cycle where the rush of taking the risk becomes all the reward they need.

Whether or not their risky behavior is beneficial becomes secondary. And the more risks they take, the more powerful they may feel. This type of power dynamic in a relationship can have a significant impact on a couple’s shared finances. When faced with a crisis, risk takers, who generally take a “don’t worry, don’t plan” approach to money management, may make rash decisions that result in emotional and financial catastrophes for them and/or their partners.

The brain’s reaction to powerful emotional even 

According to Bret t N. Steenbarger, clinical psychologist and author of Enhancing Trader Performance, “When humans experience a powerful emotional event (and a big gain or loss in our wealth, even if it is on paper, is one) our brains don’t work the way they do when we’re calm. During times like these the analytical part of the brain shuts down….” You need a plan to limit risk, especially at these times when your brain fails you.

Assess your risk 

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