The type of investment you put your money into depends on how much risk you are willing to take. As a general rule in investments (and in life), you cannot expect to achieve higher reward without taking more risk. The chart below offers a very basic look at this relationship. The investments on the bottom left offer the least opportunity for reward but they are the safest investments. Those on the top right have the potential for much higher returns, but this comes at a much-increased risk.
Rob Pivnick
Author
Rob Pivnick is an investor, entrepreneur, attorney, residential real estate investor, and financial literacy advocate. Rob runs his own law firm, and previously was General Counsel for a private real estate investment company, and has worked at an AmLaw 200 law firm as well as in-house at Goldman Sachs and Co.
