Preparing For Financial Hardships Might Prevent Them
If you want to want to improve your life and make the most of your money, then you may want to consider a more conservative approach. If you invest your money in risky ventures that don’t pay off, you are not going to be very happy.
Change Your Paradigm
“What if I didn’t invest in that risky venture and it DID pay off?” How upset would you be? Would you be more upset that you only received a market return of 4% instead of the 24% that the venture paid?
One more question, “Which would you be more upset with – losing all of the money in that same risky venture or having missed out on the large gain?”
Assess Your Risk Profile
Each person will have to decide for themselves how much risk they want to take on. OlyLife recommends that you consult with a licensed financial planner to help you determine what risk profile you may wish to adopt.
Better Safe Than Sorry?
In the above scenario, while many want the big returns, we believe that most would be much more upset about losing the majority of their investment than with missing out on the bigger potential upside and only earning market returns.
Prepare for the Worst – Hope for the Best
In doing this analysis, what we are really saying is that if you look at each investment with a “prepare for the worst mentality,” you will be giving up potentially larger gains; but if the worse comes to pass, you may be better prepared. Work with a certified planner and decide if you would be happier if your downside potential is more protected. In other words, using a more conservative investment approach.
Here are some resources that may help you in your financial planning, so go on and improve your one and OlyLife!
If you like this article, please share it on Facebook, Digg, or Twitter. We’d really appreciate it!
