April 12, 2013
There are many risks when it comes to saving and investing your money. Examples? Why is this important to know?
There are many risks when it comes to saving and investing your money. Examples? Why is this important to know?
A few examples of risks when saving money are inflation and market risk. Inflation is the risk of the value of your money when you save it being more than the value after taking it out of savings. Market risk includes the vulnerability of the market to tank.
These risks are important to know because with them you can smartly invest your money, while also being aware that your money is never immune from some type of risk.
That was an outstanding answer, Thomas. Let’s recap. There are all types of risk. You have event risk, currency risk, interest rate risk, inflation risk, and market risk just to name five. Just as Thomas told us, THERE IS NO SUCH THING AS A RISK FREE INVESTMENT.
That includes that money in the bank. Inflation is eating it up day by day. We MUST consider all risks as we invest our money so it can grow over long periods of time. Stocks have done that, but we must know HOW to invest in stocks. That leads to tomorrows question.
Know your risks. They are real and they exist everywhere!
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