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Money Habit #20 – Know Your Personal Tolerance for Taking Risk

Some of you are risk takers — you can sleep at night knowing your stocks might go down as well as up. 

Others would be very unhappy, perhaps lose sleep, if your investment dropped more than 10%. 

This is the whole reason to have an investment policy that takes into account how much risk you are willing to take to get wealthy; it’s the ‘risk versus reward’ comparison. 

Part of managing that risk is having a sell strategy as part of your investing plan.  Working with an investment advisor will help you determine what kinds of investments have what level of risk and whether they are right for you. 

You cannot build wealth without taking some risk with your money, but you can build it more slowly, taking less risk and feeling better about the whole game of investing.

Next Habit, #21, Automatic Investing

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