Could being over cautious cloud your thinking when it comes to deciding what to do with your money?
When reciting the age-old saying ‘nothing ventured, nothing gained’, Britain’s best-known billionaire, Richard Branson, comes to mind. His rollercoaster ride – from the highs of Virgin Atlantic, Virgin Media and Virgin Trains, to the lows of Virgin Cola, Virgin Vie cosmetics and a couple of failed National Lottery bids – has enabled him to build an empire worth a cool $5.2 billion*.
As self-made fortunes go, that’s impressive by anyone’s standards. The secret, according to Sir Richard, is this: “How ‘lucky’ you are in business will be determined by how willing you are to take calculated risks.”**
Whether you have $5.2 billion or £500 at your disposal, when it comes to making the most of your money, it really is a case of having to speculate to accumulate. The trick is to do it in a balanced and calculated manner, deciding what level of risk allows you to remain in your financial comfort zone.
Risk avoider or risk taker?
Do you err on the side of caution or like to take a walk on the wild side? Find out how your attitude to risk could affect your finances with our interactive quiz >>
So, where do you sit on the risk-taking spectrum? Extreme risk takers can be reckless while extreme risk avoiders are less likely to attain great rewards. What’s required is a happy medium.
When it comes to savings and investments that occupy the middle ground between lower-risk cash savings and higher-risk stocks and shares, a With Profits savings plan from Foresters Friendly Society could be an option for anyone who wants to save regularly and give their money an opportunity to grow.
What is a With Profits saving plan?
- A With Profits Fund puts your money together with other savers’ money to be invested in a variety of different ways. This mix works to protect your money’s exposure to risk because it’s not all invested in one place.
- As with many savings plans, in some circumstances there could be a risk that you may get less back than you paid in, but this is lower than with some other investments, such as direct investment into stocks and shares.
- With Profits investments don’t pay interest. Instead, there’s the potential for growth through bonuses which will depend on the With Profit fund’s performance. Bonuses may be added to your plan and paid out at maturity, although you should be aware that their addition is not guaranteed.
- With Profits aims to help your investment grow steadily, while protecting it from the ups and downs of the stock market. This process, called smoothing, works by holding back some of the investment return in years when the With Profits fund’s investment performance is good, and then using it to top up bonuses in years when the fund may perform less well.
Want to know more? Watch Mr Money’s Simple Guide to With Profits Savings from Foresters Friendly Society.
Who are Foresters Friendly Society?
Foresters Friendly Society is a mutual financial services provider founded over 180 years ago, which today has over 80,000 members.
Foresters’ mutual status means they have no shareholders, so all their profits are shared amongst their members or re-invested for their benefit.
The Society offers a range of affordable, mid to long term saving, investment and insurance products for all the family, as well as a range of additional member benefits, including discretionary educational grants and healthcare support, available at no extra cost.
You can find out more at www.forestersfriendlysociety.co.uk