Are you risk tolerant or risk averse? This is the first thing I ask when I speak to someone new to real estate is what is your risk tolerance? Because your strategy will vary depending on that answer. The truth is, most people don’t know the answer. If you want to do a little self discovery to determine your risk tolerance, here is some guidance. The Characteristics of a risk tolerant investor: ✅ Comfortable with volatility — willing to accept ups and downs in portfolio value ✅ Believes higher risk = higher potential return. ✅ More likely to invest in stocks, alternatives, venture capital, crypto, or private equity. ✅ Long-term view: short-term losses don’t cause panic if the strategy makes sense. Characteristics of a risk averse investor: ✅ Uncomfortable with volatility — prioritizes preservation of capital over high returns. ✅ Seeks investments with stable, predictable outcomes. ✅. More likely to favor bonds, CDs, savings accounts, Treasury securities, or annuities. ✅ Short-term losses feel painful, so they avoid them even at the cost of long-term gains. Typically, the closer to retirement age someone gets, the less risk tolerant that person is. When someone is nearing retirement age, they may seek out fixed income assets at lower interest rates instead of the higher return higher risk alternatives. For example, a 40 year old high earner who enjoys their job should be more risk tolerant and consider investing in assets that are more risky but have a high probability of delivering higher returns. I personally am more risk tolerant than most, but it’s important for you to decide for yourself. Determining this will guide your real estate investing strategy. #personalfinances #invest #investing