Financial writers are proponents of caution. And this is a sensible way to be. Most finance blog readers are young enough to set money aside and watch it grow for a long time.
But, this method assumes quite a lot about the individual: 1) That you won’t find a better rate of return on your investment through your own study, 2) That you are uncomfortable with bigger-than-average risk and, 3) that you don’t see yourself as your primary investment strategy.
Of course, I will always advocate a certain amount of conservativeness in investments, but I also think it pays to be a bit more aggressive with some of your money, especially if you are healthy and young.
- Find a Better Return on Investment. If the entrepreneurial spirit runs in your blood, you may see a much better rate of return, in the long run, from starting a business than investing in mutual funds. Some people don’t know they have it in them until they try. But when you get that first taste of money that you earned through your own hard work and ingenuity, it’s hard to turn back. Consider using some of your savings or investment capital to make a business dream come true. If it pays off, you may end up living a life you never before imagined.
- Be Willing to Accept Big Risk in Some Areas. As people age, they aren’t able to maintain the same degree of risk they did as young people. But if you have a lot of life ahead of you, you will be able to recover from a momentary stumble, if in fact you do fail. There’s a lot to learn from failure and, getting up and doing it again, you are much more likely to succeed because of your experience. In practical terms, this may look like withdrawing your IRA contributions to pay the down payment on a house, or having CIYA annuity buy up your structured settlement, using the lump sum to start a business. Generally, these aren’t actions a financial advisor would push you to, but personally, you may be able to handle it. And thrive from the choice.
Take back control of your finances!
Get a FREE checklist for the money moves to make in the New Year.
Also get new articles, advice, and tips delivered right in your email inbox with our newsletter!
- Invest In Yourself Above All Else. You will be the primary vehicle of your own success. It’s easy to outsource the job, entrusting your money to managers and firms who guarantee you a certain rate of return. And don’t get me wrong. These are indispensable. But Henry Ford famously did not start saving until his thirties and forties. What was he doing in the meantime? Educating himself, gaining perspective, increasing his skills, making social and business connections, living life. As an experienced, educated person, you will have real knowledge, competence, and confidence. In a practical sense, you will be much more able to make money than ever before. In a personal sense, you will have real value to offer business associates and loved ones alike.
Wealth takes risk. In order to generate real money, you have to be comfortable with certain calculated risks, maybe those that are a bit riskier than others are. We hope you’ll make the right choices, but most of all that you will have the courage to make them. Your financial life won’t look like anyone else’s. Neither will your success story.