It’s the daily commute to work, it’s the morning walk down the stairs, it’s every time you have your food prepared by someone other than you – these are daily risks we take in order to simply live.
However, these risks don’t really feel like risks because they are necessities that take place, almost without thinking. Just like these ‘mini’ risks are daily investments to our everyday lives, so is the risk you take when investing in the stock market.
The more calculated the risk, such as asset investment, differentiate the financially successful from those who struggle or have conceded to remain monetarily ‘comfortable’.
To transfer from the financially comfortable or struggling to the financially powerful, you will absolutely have to engage in a higher level of risk.
To justify and hopefully mitigate some of the risk involved in investing; there are a couple of key factors that need to be considered and put into play:
- Know your Risk Tolerance
- Educated Yourself
- Have a back-up plan
Risk Tolerance
The financial industry teaches: the more risk you take, the more you make.
However, risk tolerance can also be calculated with your time frames. Typically gainful investments are more long-term, so it’s important to create a plan that enables time to be on your side, in case you need to recover after a loss. Managing your risk this way will help you avoid acting impulsively to where you could damage any long-term returns.
Investment Education
Investing without educating yourself is like driving blind; your overall risk quotient becomes magnified to its peak. Part of your risk tolerance factor is determined on how confident you are in what you decide to invest in. How confident would you be about an asset you know nothing about?
Take the time and do your research. Research helps to qualify the risk you are taking, and exemplifies the efforts you are making to increase your wealth by investing.
Both your risk tolerance and education demands you to acknowledge the reality of possible loss. You need to know, how much are you willing to risk.
A Back-Up Plan
Perhaps the most important rule when engaging in the world of investing is to have your back-up plan. Whole Life Insurance can be that back-up plan. Many people don’t realize that whole life insurance acts as a cushion for your finances if you experience a loss.
Life Insurance is actually one of the best options in terms of a ‘cushion’. It’s the wealthy and sophisticated investor’s secret to securing their financial freedom.
The cash value incorporated with a Whole Life Policy allows you liquidity for anything, even investment loss.
A Whole Life policy is two-fold insurance. It is a life insurance policy that will provide a death benefit to your dependents when you pass away, as well as living benefits, like cash value. Cash value is accessible for you to either invest with, or have as reserve should you risk too much and experience loss.
There aren’t many insurances in life that can increase your wealth while also protecting your assets. Most insurance is a result of the aftermath of a risk gone wrong.
Whole Life Insurance changes the investment game. It allows you to take risk, to invest, and protects you from not only the everyday risks, but the calculated ones you take to increase your wealth.
For more information on how to keep yourself safe while investing, visit Infinite 101.
