Is This a Risky Financial Investment? 4 Things to Consider

All financial investments are risky, but some are riskier than others. Here are four questions that will help you determine if the investment you’re considering is smart.

These money tips are from “The Money Couple”, and they’re geared towards women. But it doesn’t matter if you’re male or female, or whether you’re investing in real estate, education, your career, stocks, mutual funds, or your child’s college education. These tips will help you figure out what’s risky for you, and what’s not.

Here’s what Scott and Bethany Palmer say about making financial investments:

“What now? It’s a question we are hearing from more and more couples as the recession takes its toll. Those who’ve lost jobs wonder what they’ll do next. Those who’ve taken a major financial hit are trying to rebuild. Those who’ve weathered the changes so far are worrying if they’re going to be the next casualties.”

“What now? It’s a question we are hearing from more and more couples as the recession takes its toll. Those who’ve lost jobs wonder what they’ll do next. Those who’ve taken a major financial hit are trying to rebuild. Those who’ve weathered the changes so far are worrying if they’re going to be the next casualties.”

The Palmers wrote The 5 Money Personalities: Speaking the Same Love and Money Language, and other books on money for couples.

Is This a Risky Financial Investment? 4 Things to Consider

In the midst of economic changes, many women are seeing financial opportunities and learning money lessons. Maybe a lost job means it’s a good time to go back to school. Maybe the foreclosure offers a chance to move to a new home and make a fresh start. Maybe the availability of stimulus loans makes it a good time to start a business you’ve always dreamed of.

This might be the right time to take a financial risk or make an investment with your time. But first you (and your partner) need to think about these money tips…

What is your current level of financial debt? A mortgage or car payment is one thing, but if your credit card debt exceeds more than 10% of your annual income, you should hold off on making risky financial investments. Instead, spend the next six months reducing your debt. Then, re-assess your plans.

Weigh the pros and cons of this financial investment. Have a realistic conversation about how this new opportunity will change your daily lives-financially, socially, and emotionally. How will it affect your schedules? Will you need more childcare? Will you have to pull back on other financial commitments? How will this change your spending habits? Do you need to tap into other investments to fund this risk? What other financial sacrifices will you have to make? Only you can determine if these changes are worth it.

If you don’t have enough money to make a financial investment, read 5 Tips on Saving Money for Students. They’re not just for students!

If you’re half of a couple, make sure you’re both on board. If one of you wants to start a business and the other thinks you can’t afford it – or you have different money personalities – get creative about ways to meet both your needs. Can you build your savings over the next six months so the financial investment is less risky? Can you bring in a partner to ease the financial stress? Can you break the idea into smaller, more manageable chunks? “Risk Takers” in particular need to make sure they have their partner’s blessing before moving ahead with a new financial venture. Without your partner’s blessing, you’re going to bring anger, frustration, and deep resentment into your relationship. And no financial investment or risk is worth that.

Take your time before investing money. A good financial investment will still be good two months from now. Before you make a major financial commitment to a new venture, take a deep breath…and wait. Keep dreaming, keep talking, keep saving, but don’t make a move until you’ve let your plans simmer a while. Whether you’re talking about one partner going back to school, living on one income, starting a new business, or changing jobs, work together to make this financial investment one that benefits the whole family.

If you want to invest in a house or real estate, read How to Save Money for a Down Payment on a House.

This post has been updated, and re-published here on New Beginnings as 4 Tips on Financial Investment From the Money Couple. For more info about the Palmers, visit The Money Couple.

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1 comments On Is This a Risky Financial Investment? 4 Things to Consider

  • I recently invested in a condo in Vancouver with my sister. We have a mortgage, and our renters are paying the mortgage and then some every month. We’ve only been doing this for three months now, but it’s working great. Our parents didn’t think it’s a risky financial investment because the real estate market is still on the downswing.

    Even if it doesn’t pay out lots of money, it’s been a great experience already!

    Thanks for this article, I think the more women know about money, the better.

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