(03) 9020 2905Got any daredevil in you? A little bit Evel Knievel, flying high on motorbikes? Or would you feel more at home in the engineering department at Volvo during their 80s boring box-car period?
The likely answer is somewhere in between – a bit more average, like Richie Cunningham from Happy Days.
A risk profile is a tool that measures your willingness to take investment risks. You’ll find a simple one top right at www.debtman.com.au.
For Gen Xers, it’s important to understand that your risk “score” shouldn’t determine every investment risk you take. No more than you’d let Athena Starwoman’s horoscopes control your day.
Investing your money should also take into account time periods (short, medium and long) as much as it should your risk profile.
For example, Gen Xers can’t touch their super for between 15 and 30 years. And then it’s designed to last several decades beyond. By definition, super is long-term, so having more super money invested in shares and property should provide you with a better retirement.
Your short-term goals (up to two years) might be paying down the home loan, or going on a holiday. That should be invested in cash.
The medium-term can be a little trickier. Most Xers should have a leaning towards property and shares. But that depends on what you’re trying to achieve.
Xers’ long-term investments (outside super) could include geared property and share portfolios. But gearing certainly doesn’t suit everyone.
A risk profile is just the start of a conversation about how you would like, or should have, your money invested. And if you don’t like what it says, tell your adviser.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser.