Home > Mom's Life > Family Finances > Family Budgets > Basic Rules for Financial Freedom: Make Wealth Happen

Slideshow Iconslideshows MORE

|

Basic Rules for Financial Freedom: Make Wealth Happen

4 of 15
Slide 3

Decide Your Attitude Toward Risk


After you decide your attitude toward risk, it makes your planning easier. It allows you to tailor how you intend to become prosperous. Hare or tortoise, I guess.

Obviously, your attitude will vary depending on the project. Things to take into consideration are

  • Your age -- We cope better with risk the younger we are.
  • Family commitments -- If, like me, you have young children, it does make you more cautious. If they've all left home, you might be prepared to push it a bit further.
  • Income and/or assets -- You need to work out the percentage of your wealth you are prepared to risk. The more you've got, the smaller the risk might be -- unless you are prepared to lose the ranch, of course.

If you are going to take risks, then do try to offset them. Take out insurance if you like:

  • Don't put all your eggs in one basket (more about this later).
  • Consider how much stress and excitement you can handle.
  • Look at the timing -- long term against quick returns.
  • Think about how much you can afford to risk -- worst-case scenario stuff.
  • How much information do you have? Too little increases risk.

The other thing to ponder is how you respond to the risks of life. Life in itself is risky, and nothing is certain. How do you cope when things go wrong? Are you positive, dynamic, enthusiastic, and up? Or do you get all gloomy and depressed and feel the glass is half empty? Know yourself, and know how you cope and how you respond to changes. And remember that risk doesn't mean bad. It means you don't know how it will all turn out.

Next: You Have to Work Hard to Get Rich Enough Not to Have to Work Hard

From The Rules of Money Copyright © 2007, FT Press. Used by permission of FT Press, and Pearson Education. All rights reserved.

To order this book, buy on Amazon.

highlights

11 Awesome STEM Toys to Get Kids into Science & Math
Get your child excited about the STEM subjects (science, technology, engineering, and math) and summer learning! See our picks for science kits, math games, and other STEM toys for kids of all ages.

Find Today's Newest & Best Children's Books!
Looking for newly released books for your child? Try our new Book Finder tool to search for new books by age, type, and theme, brought to you by Galactic Hot Dogs.

Preventing Hot Car Deaths: 6 Facts & Tips for Parents
Every year, between 30 and 50 children in the U.S. die from overheating in a vehicle. Learn facts and prevention tips to safeguard your child from "hot car death."

Registered for Kindergarten — Now What?
Try our award-winning Kindergarten Readiness app! This easy-to-use checklist comes with games and activities to help your child build essential skills for kindergarten. Download the Kindergarten Readiness app today!

stay connected

Sign up for our free email newsletters and receive the latest advice and information on all things parenting.

Enter your email address to sign up or manage your account.

Facebook icon Facebook icon Follow Us on Pinterest

editor’s picks