For example, higher income and substantial savings can increase your ability to take risks, high debt levels or significant financial responsibilities (like supporting a family) can reduce your ability to take risks, the longer your investment time frame, the more risk you can typically afford to take, as you have more time to recover from potential losses.
Effective financial planning involves balancing your willingness and ability to take risks. Here are a few steps to consider: Assess Your Risk Tolerance, Evaluate Your Financial Situation, Diversify Your Investments and Adjust Over Time.
