-Hallo friends, Accounting Methods, in the article you read this time with the title How to Reduce Financial Risk, we have prepared this article well for you to read and retrieve the information therein.
Hopefully the content of article posts Artikel, which we write this you can understand. Alright, happy reading.
Title : How to Reduce Financial Risk
link : How to Reduce Financial Risk
How to Reduce Financial Risk
How to Reduce Financial RiskHow to Reduce Financial Risk - Hello Friend Accounting Methods, In the article you read this time with the title How to Reduce Financial Risk, We have prepared this article for you to read and retrieve information therein. Hopefully the contents of postings Article finance, Article Financial, Article risk, We write this you can understand. Alright, good read.
Title : How to Reduce Financial Risk
link : How to Reduce Financial Risk
How to Reduce Financial Risk
Everyone who invests money in in any type of business will face the risk. This risk will many type whether this risk may be the loss of investment or loss of return on investment. If you are expert investor, you have to reduce your financial risk at any cost. At minimum risk, you have to generate higher return on investment. Following are the simple steps to reduce your financial risk.
1st Step : To Classify All Financial Risks
There are lots of financial risks. You first classify all your financial risks into different categories. With this, you can understand it better way. All financial risks are of two categories. One is systematic risk and second is non-systematic risk. Systematic risk is the risk of whole market. and non-systematic risk is one company's risk.
Systematic risks are interest risk, inflation risk and currency risk.
Non-Systematic risks are liquidity risk, legal risk, solvency risk,
2nd Step : To Invest Money in Different Projects
There are main investment projects are stocks, bonds, Govt. fixed deposits, own businesses and real estate market. For reducing the financial risks, you need to invest your money in all type of investment project.
1. For example, 50% Saving, you can invest in Govt. fixed deposits.
2. Next 25% saving in Real Estate
3. Next 10% saving, you can invest in Mutual funds or bonds and Stock.
4. Next 15% in your own business.
3rd Step : To Learn to Take Big Risks
I have simple formula in Taking big risks. Highest risk is in stock market and it has highest profit. You need to learn to take its big risks. You will get passive income from your Govt. fixed deposits. You can buy the shares, mutual funds from it. If you face the loss of return due to decreasing its value, you can tolerate it because your real capital is safe which is in Govt. fixed deposits.
But there is the risk of inflation and interest risk is also on Govt. Saving and Fixed deposit money. From last five years, we are seeing that rate of interest is decreasing. From 12%, it has reached 7.5%. Second, there is big prices of every domestic products. So, inflation is increasing with fast rate. So, you can make the plan. After investing 25% in real estate, you have to construct its building with your fixed deposit interest. With this, you have to generate new passive resource which will rent. Which will increase from time to time. Second, your real estate value will increase which will help to reduce inflation risks.
4th Step : Adjustment in Your Investment
Sometime, you can use the tool of adjustment in your investment for reducing risk. It means, to invest more money for reducing risk. It means to sell at the beginning time of loss after estimating your risk tolerating power. Same money invests in other profitable projects.
Sources and Citations
1. Tips for Better Management of Money eBook
2. Financial Management Notes eBook
Related Articles
- Risk Management of Banks
- How to Manage Your Finance Better
- Benefits of Reserves
- Steps to Calculate Annuity Payments
- How to Give Home Loan
- What to See Before Buying Property
- Foreign Exchange Risk and their Management
- Project appraisal
- Measurement of Risk and Returns Securities and Portfolios
- Portfolio
- Systemic Risk vs Systematic risk
Thus Article How to Reduce Financial Risk
that's all the article How to Reduce Financial Risk this time, hopefully can give benefits to all of you. alright, see you in posting other articles.
You now read the article How to Reduce Financial Risk with link address http://accountingmethode.blogspot.com/2016/08/how-to-reduce-financial-risk.html
[ad_2]
Source link : How to Reduce Financial Risk