Are you a risk taker or do you prefer to play safe with your money? Take our quiz (and find out why With Profits is a happy medium)
Thursday, July 17, 2014
Most of us know that there's a balance to be struck between risk and reward - but which way do you swing? Take our quiz to find out…
(We should point out here that this is a highly unscientific quiz designed to get you thinking about your attitude to risk, and should not be used to base any financial decisions on!)
1. You arrive at the station without a ticket, with just a few minutes to go before your train is due to leave, and there are long queues at the ticket office. What do you do?
a) Squeeze through a barrier, hop on to the train and hope that you won't get caught or that there's an understanding ticket inspector on board.
b) Explain the situation to the people at the front of the queue and ask if they'll let you go first.
c) Sigh in a resigned way and join the queue.
2. Have you ever done something without knowing what the end result would be?
a) Yes, that's what life's all about isn't it?
b) Yes, but I'd looked into it and felt pretty confident about the result.
c) No, never.
3. When you're filling out an important form - say a passport or job application - which of the following best describes your approach?
a) You complete it as quickly as possible.
b) You take your time and give it a quick read through at the end to check your answers.
c) You take hours, double-checking every piece of information you include and asking someone else to read it through afterwards.
4. You get a great horseracing tip from someone you know to be an expert. Do you:
a) Bet a significant chunk of your savings on it - it's a sure thing.
b) You don't go mad, but you place a more substantial bet than you would normally be inclined to do.
c) You never bet, it's too much of a risk.
5. You're lucky enough to have a financial windfall, what would you do with your savings?
a) Put them in a high-risk fund that could do brilliantly.
b) Invest them in a lower-risk fund that has potential for solid but not startling results.
c) Keep them in an interest-earning savings account.
As you've probably guessed, if your answers were:
• Mostly a) then you're not afraid to take a risk
• Mostly b) then you're not averse to a little risk, as long as you've done a bit of research
• Mostly c) then you're pretty risk-averse.
It's a question of balance
Wherever you sit on this scale, you'll probably admit that it sometimes pays to take a little risk, whether you're setting up your own business, perfecting your language skills or choosing savings and investments. The more risk you're prepared to take, the more reward you could potentially receive.
The middle way
If you sit somewhere in the middle, With Profits savings plans spread your investment across a range of assets, from savings and fixed interest through to property and shares, they aim to balance the risk.
If you take this middle option, the reward you could receive should also sit somewhere between traditional interest only savings accounts and higher risk investments - potentially giving you more growth than the savings account, but with less risk than a stock market investment - ensuring you can sleep at night if you're not a natural risk-taker.
Watch our video to find out more about With Profits savings plans:
This blog is intended to provide information, not financial advice, to help you make an informed decision about savings and investments. We do not offer financial advice. You should contact a financial adviser, who may charge a fee, if you want financial advice.
You should also be aware that in some investment conditions and depending on the product you have chosen, you may get back less than you have paid in.