Which type of investor are you?
I sometimes liken property investing to preparing for a long road trip. When you want to arrive at your desired destination safety safely and on time, it’s important to set your GPS….right?
On a road trip you have to make decisions; like how far you are going, do you have enough petrol, where will you be stopping on the way and what is your final destination? There are basic similarities to property investing also where you need a plan that helps you set financial goals, decisions on how long to invest for, how much risk to take and the amount of money you’ll need to get there.
There are many types of drivers on the road, each with their own journey, just as there are many types of investors. So which type of investor are you?
To figure out what type of investor you are, you’ll need to ask yourself some questions first:
- What are your goals? Are they short or long term?
- Are you investing for income, growth, security? – do you know?
- What level of investment risk are you comfortable with?
You’re not generally one to take unnecessary risks and happy to take your time to reach your destination. This investor is focused on minimising risk rather than maximising gains and has a long term outlook.
Also known as the opportunist investor, isn’t afraid to take risks for gains. Likely to try different strategies and hold a mix of short and long term investments, with an interest in both receiving a passive income now and future capital growth.
The riskiest of investors wants to get to their destination/financial goals quickly. Although this type of investor can receive better returns they are also more liable to larger losses.
Back Seat Driver
The type of investor who researches, talks but takes no action. Whether this is from being overly cautious, any type of investment carries risk but you will never reach your destination without driving the car.
For the majority of us the destination is financial freedom. Only 1% of Australians are financially free and the majority have taken themselves there, they didn’t inherit it. They have made it by educating themselves and taking action. You can overcome the crossroads speedbumps to get to the destination. All it takes is education, some help and a little drive/ambition.
Whatever type of investor you are, remember a diversified approach works best. On any journey, sometimes you are on cruise control and sometimes you need to overtake to speed the trip along. Much like a GPS – An investment expert can help you through the journey and make the most informed decisions at every stage.
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