What kind of investor are you?
Making an investment, whether it's a rental property or shares, is an activity that many Australians participate in. It could be to create wealth for an early retirement or perhaps to leave a legacy for your kids. Whatever your reasons for investing, it's crucial you give thought to your investment personality.
The type of investor you are can impact your property investment strategy, from how you secure your finance to how long you own your rental home for.
It could even affect the way that you manage your portfolio once it's established, what you purchase or how you deal with existing debts.
Here are three common types of investor personalities - which one are you?
Gung-ho and aggressive
Like a soldier ready for battle, conflict and hard work, gung-ho investors are out to make noise - and money. These investors are aggressive and actively look to take on a lot of risk.
This risk can either pay off or cost you, depending on the types of decisions you make and your level of knowledge. But it's the thrill of it all and the gamble of the game that attracts you to investing in the first place.
High growth in a short amount of time is something that you strive for when it comes to your investments.
While this type of investment personality might be for some people, it may not work for everyone. As there is a lot of risk associated with this type of investor, you need to have a lot of capital to fall back on, should things go awry.
You'll also need to be well educated and switched on when it comes to finance and investment. Everything from how the share market works to property cycles will need to be at the forefront of your mind at all times.
Cautious and careful
Often find that you're extremely cautious with your money? Before making financial decisions, do you sit and mull over them for a while to ensure you'll make a wise choice?
Conservative and cautious investors are those who might opt for less risky investments. This might be the type of asset, how much it costs or, for property, where it's located.
While seeking out lower risk investments can provide you with a bit of assurance and protection, it might not give you the strongest results that you'd like.
If this sounds like you, it's likely that you're investing for a long period in order to grow your investments over time. For property, you might even stick to areas you know and have thoroughly researched to protect your finance.
A mixture of personalities
You might not be one or the other - you could have elements of both personalities and be a balanced investor. Your portfolio could consist of a variety of assets with different levels of risk so you're not placing all of your eggs into one basket. Investments could provide you a mixture of both short term and long term benefits, such as a property that gives you both high rent and strong capital growth.
You have ambitious goals in mind and jump at opportunities to reach them, but you wouldn't walk blindly into the sun - you'd probably do your homework first!
Regardless of your investment personality type, before making any financial decisions you'll need to discuss strategy. By speaking with a wealth expert for property coaching, you can create a tailored investment strategy that's suited to your personality and financial circumstances. From there, you can get on the road to wealth with confidence.