What is Your Risk Tolerance for Investments?

When you’re ready to invest, you are likely to consider the amount you have available to invest and what you want your financial gain to be over time. Maybe you are quite specific about these factors, or you may only care about the bottom line and how much you stand to lose or gain.

For your own continued sanity,  it’s wise to determine your level of risk tolerance for your investments. Understanding your own wants and desires related to your finances will largely determine how you decide to allocate your funds.

Consider your answers to the following questions to help you determine your level of risk tolerance regarding investments:

1. How much are you willing to risk? Based on how much money you currently have, how much of it are you willing to risk in an investment?

* Of course, some people will say, “no problem, let’s go for it” regardless of how much they’re worth. Others, however, will carefully evaluate their financial worth and be willing to risk only a certain percentage of their overall wealth.

2. Are you okay with no cash flow? Can you handle no investment cash coming in for a while if a large investment goes south?

* If so, how long can you put up with this condition? Being able to live with no money coming in is difficult for most people. How well you can accept this situation is an important determinant of your risk tolerance.

3. Hesitation Factor: Is an investment “doable” in your eyes? If you’re considering a specific investment, do you feel the investment is one you could make without hesitation?

* Each person has his own thoughts and ideas about the type of investments in which he has confidence. Your investment risk tolerance depends on the rigor with which you evaluate your potential investments.

4. Experience Level: What is your experience in investing? Are you able to adjust to money losses in the short term to gain funds over the longer term?

* If you’re 40 years old and you’ve been investing for 20 years, you’ve got 2 decades of experience under your belt. You can most likely trust in your prior investment experience when it comes to making investment decisions. Plus, 20 years of investing builds a lot of confidence, which strengthens your risk tolerance.

* But what if you’re 35 years old and making your first investment? If this description is closer to your situation, your risk tolerance will be lower and for good reason.

5. How old are you and how much are you worth? These factors are also important when it comes to making difficult decisions about how to invest your money.

* When you’re younger, you may have more tolerance for loss because you have more time to make up any losses before you retire.

* Also, at any age, the higher your net worth, the easier it may be to tolerate a loss of a small percentage of your worth.

It’s wise to know your level of investment risk tolerance. Because making investments are so integral to you and your family’s financial future, it’s important you be intimately connected with your feelings and ideas about investing your money and the risks involved.

If you seriously ponder the above questions and your responses, you’ll be able to determine successfully your risk tolerance for investing.

Three Uncommon Investments To Consider

When most people think of investing in real estate,  homes, mini-malls, or apartment buildings may come to mind first. However, that’s only the tip of the real estate investment iceberg. Consider the following offbeat real estate investing opportunities. These investments can provide a significant return in the long run and may very well alter your financial future.

1.    Recreational Vehicles (RV). Believe it or not, RV rentals and sales is a very big market. With baby boomers leaning into retirement and young families seeking a way to lessen their vacation costs, many people are willing to buy or rent an RV.

  • If you’re hoping to purchase an RV to save money on your family vacations, keep the RV until it makes sense to sell it. Make routine cosmetic updates to the RV throughout the years to match the expectations of buyers.


  • Consider renting out the RV for a profit. The RV rental market is hungry with renters, but is much underserved. You can easily rent out a class C motor home for 7-nights for a minimum of $125 per night! If you’re fully booked every week out of the year, you can earn $46,000 in just one year!
  • For a class A RV you can charge in upwards of $200 per night, or $1,400 for a 7-day week – which equates to $73,000 over the course of a fully booked year. Popup campers can be rented for as much as $75 per night – or just over $27,000 for a fully booked year.
  • Even if you’re only able to rent out your RV for two weeks out of the month for $125 per night, you’re able to earn $23,000 per year!

2.    Self-Storage. Self-storage is a big industry. The shaky state of the economy may be partially to blame, as the number of multi-generation homes and families downsizing their living quarters are increasing.

  • The Self Storage Association reports that one in ten families rent out-of-home storage space. Typically, units rent between $50 per month for a small unit to over $200 for a sizeable storage unit.
  • The cost of purchasing a self-storage facility varies widely. It can cost as little as $200,000 or as much as $3,000,000 depending on the size, location and demand for the service in the area.
  • Keep in mind, aside from the mortgage, there is still overhead. Utilities must be operating in order to keep the storage facility at an acceptable temperature; this is to avoid ruined personal property. Also, employees might be necessary, as well as a security system. But as a whole, the investment generates fairly passive income.

3.    Online real estate. Online real estate, otherwise known as websites, requires very little investment and can typically generate a good ROI overtime. Traditionally real estate is thought of as tangible, but don’t disregard the earning power of online property. When you consider that Candy.com sold for over 5 million dollars, online real estate has the potential for astronomical returns.

  • Approximate startup costs are as follows: $10 for a domain name, $0-75 for a standard website template to over $750 for a unique website design, and content creation starting at around $15 for a quality article.
  • The key to making money online is having high quality and a high quantity of content in addition to moneymaking streams like marketing other company’s products, on-site advertising, or product sales.

There you have it – three markets where the competition isn’t very fierce and the bar of entry is relatively low. By investing in any one of the three offbeat investments mentioned, you’ll have the opportunity to maximize your investment dollar. And over time, you may be able to transform your investment into a fully expanded business.

Banishing Bank Fees – Is It Possible?

In challenging economic times, banks are seeking more ways to charge you for their services. Some banks are even charging a minimum of $10 per month for checking account fees! Insufficient funds fees and overdraft charges have shot sky high during the past few years.

How can you stem unnecessary spending when it comes to your bank accounts? Is it really possible to get rid of those fees?

Bank Fee Types and How to Have the Fees Removed from Your Account

1.    Monthly fees for checking accounts: Continue reading “Banishing Bank Fees – Is It Possible?”

Don’t Have a 401k: Why You Should Get One Now

There is great concern about the Social Security Administration’s ability to continue to pay retirees in the future.  In the past, Americans relied mostly on Social Security and pension plans to survive the golden years of retirement. As the economy started to spiral downwards, so did these forms of retirement revenue. Due to poor money management which is out of their control, many hardworking Americans are seeing their pensions shrink or disappear before their eyes.  If you are only counting on your pension and Social Security to survive retirement, you are making a costly mistake.  If you do not already have a 401(k) plan setup, get the process started now.

Most Americans are slightly familiar with 401(k) plans.  They are retirement plans.  For most, they are a backup plan.  Others are counting on their 401(k) as a major source of income during retirement.  These plans are funded by employee payroll deductions.  The money is then invested in mutual funds.  Popular investments include stocks and bonds.

Right about now, you may be questioning the safety of starting a 401(k) plan.  After all, the stock market took a huge dive in 2008.  Those with investments saw their retirement plans decrease and fast.  This has caused a panic.  Some Americans are now holding off on retirement, as they cannot survive their retirement years financially.  Others are wondering if they should move around funds.  A lot of panic has ensued.  Is it really the best time for you to start investing?  In most cases, yes!

Right now, the stock market is at a low.  Financial and investing experts are claiming it can’t get much worse than this.  They are advising investors to stick it out.  Many have the view of “the market can only improve.”  Yes, this may take years.  This is however, where you are at an advantage.  If you have yet to consider a 401(k) plan, you are likely young.  You may be in your early 20s or 30s.  What does this mean?  You can play the waiting game.  You can buy stocks for cheap and wait.  Remember, most financial experts are saying they will only improve.  Since it will be at least 25 years until you retire, you can survive the market’s ups and downs.

If it wasn’t enough that you can invest money in stocks now, for some of the cheapest prices ever, there are many more benefits to having a 401(k) retirement plan.  One of those benefits is the tax advantages.  As previously stated, 401(k) plans are funded by employee payroll deductions.  By automatically deducting this money from your checks, you are less likely to miss it.  Moreover, your contributions are not taxable.  For example, if you earn $50,000 and contribute $2,000 for one year, your taxable income for that year is only $48,000.  The only downside is that the taxman eventually gets his hands on your money; it is taxed when used for retirement.

Another benefit of creating a 401(k) plan is employer contributions.  Most employers have plans in place that allow them to match employee contributions.  This varies greatly depending on the company in question.  Many have restrictions on the matching allowed.  For example, a new employee may get a 25% match.  Some companies will match contributions 100% or more.  Before creating a 401(k) plan, it is advised that you speak with your employer.  See if they match your contributions and by how much.  Look at this as free money.

Finally, there is the flexibility of 401(k) plans.  As previously stated, most employees opt to invest in stocks and bonds.  The decision is yours to make.  You are in control of your money.  Most financial experts recommend that older individuals opt for low-risk investments, like short-term bonds.  These individuals can suffer damaging consequences from risky investments, like the stock market.  On the other hand, those young in life are often encouraged to take a gamble.  It will usually pay off and may result in long-term wealth.

As you can see, there are a number of benefits to creating a 401(k) retirement plan and profiting from the current state of the stock market.  Now is the time to purchase low-cost stocks.  Sit back and wait as they survive the struggling economy.  If you play your cards right, your 401(k) will not just supplement your pension and social security, but it could finance your retirement years on its own.

Are You a Compulsive Spender?

An important part of living the good life is figuring out how to have what you want and still save money for your future. Do you find that,  even though you want to save,  you repeatedly over-spend instead? When do you cross the line from spending too much money to becoming a compulsive spender?

Although it isn’t listed in mental health professionals’ Diagnostic and Statistical Manual of Mental Disorders-TR (Text Revision), the fact is that compulsive spending has similarities to mental health challenges such as kleptomania and even alcohol/drug addiction.

In compulsive spending, engaging in the behavior of spending money alters how you feel initially. Later, those “high” feelings transform into guilt or self-loathing due to over-spending. Do you feel that you may be struggling with compulsive spending?

Questions to Ask Yourself to Determine if You’re a Compulsive Spender

  1. When you spend money, do you experience an adrenaline rush or a “high?” Spending money on items that you need or require is the natural thing to do. However, if you’re shopping and spending just to change how you feel, you could be compulsively spending. 
    • Feeling an adrenaline rush or a sense of excitement and thrill (a “high”) when you shop and spend is a red flag.
  1. Do you buy items that you never end up using? Maybe you have possessions stacked everywhere or taking up a lot of your living space. Or do you place stuff you bought in your closet where you find them later with the tags still affixed to them?
  • Even though you may not have a full-blown “hoarding” situation, collecting things you can’t use could signal you struggle with compulsive spending.
  1. How do you usually feel? When you aren’t shopping or spending money, do you experience anxiety, feeling down, or “the blahs?” Experts believe that people who compulsively spend are seeking the rush to avoid feeling the way they usually do, which is unhappy or anxious.
  • Take a serious look at how you feel much of the time when you’re just living your everyday life.
  1. Are you secretive with your purchases? Do you sometimes avoid being honest with your partner about how much money you’ve spent or even conceal items you’ve bought from your loved ones? Fearing reprisal from loved ones for purchases you made means you’ve probably had such experiences in the past.
  • Compulsive spending can be tough on your personal relationships.
  1. Can you pay your monthly bills? When it comes time to pay your regularly occurring bills to live (utilities, for example), do you have enough money to cover all your expenses? An additional price to pay for compulsive spending is struggling to cover your actual bills due to over-spending.
  2. Do you spend more money now than ever before? When looking back at your spending habits over time, do you see yourself progressively spending more and more money with less regard for your budget? Because of the mental health aspects of compulsive spending behaviors, compulsive spending tends to gradually increase as time goes by.


What Can You Do About Compulsive Spending?

  1. Liberate yourself. The good news is that if you’ve already identified yourself as one who compulsively spends, you’re now free to take steps to decrease your spending.
  2. Set up a budget with the help of your partner or a close friend. Seeking guidance from those you trust is important. Vow to stick to your budget.
  3. Avoid temptation. For now, decide to stay out of the stores, off of the online shopping sites, and away from the televised shopping networks.
  4. Work on developing a positive mindset. If you feel better in your daily life, you won’t need to seek the adrenaline rush that compulsive spending provides.
  5. Consider talking to a mental health professional about your situation. You might benefit from additional therapeutic support from a professional, neutral third party.


If you’re concerned about your spending, honestly answer the questions to determine if you may be compulsively spending money.

Once you recognize you need to reduce spending and change how you feel on a day-to-day basis, put the above 5 steps into action. Discover a more fulfilling and secure financial life by avoiding compulsive spending.