The Risker Financial Archetype | Nedbank Money Secrets

Financial wellness content recommended for The risker

Why should I choose a unit trust?

As a Risker, nothing gives you a bigger kick than taking a gamble and seeing it pay off. You’ve heard a lot of talk around unit trusts, but what exactly is a unit trust, and why should you be investing in one?

The simplest way to describe a unit trust is an investment that pools money of various investors together. Fund managers then uses their financial expertise to decide how this pool of money can be used to best grow investors’ funds. This could include shares, government bonds or listed property.

Here a few Money Secrets as to why you should consider investing in a unit trust.

  • Unit trusts are managed by professionals, which means your money is in reliable hands.
  • You have flexibility in terms of investing lump sums or making smaller monthly contributions towards your investment.
  • You have access to some or all your funds whenever you need to make a withdrawal.
  • Unit trusts are regulated by the Financial Sector Conduct Authority (FSCA) to protect you.
  • Unit trusts are cost effective and transparent in terms of management.

For more on how to choose the right unit trust watch this video.

This information is intended for general information purposes only and does not constitute legal advice.

Should I have debt?

This is always a tough one to crack. Surprisingly, the answer is both ‘yes’ and ‘no’. Being a Risker, you love living on the edge. Having access to credit is not necessarily a bad thing, but it can also land you in hot water if you don’t use the credit to your disposal in a responsible manner.

Debt can be divided into good and bad debt. It’s acceptable to have good debt such as home loans and study loans. The reason for this is that an asset such as a house appreciates in value over time, while a study loan empowers an individual to qualify for well-paying jobs, which leads to a better standard of living.

Bad debt would be debt incurred by living above your financial means. This would include going on extravagant holidays, dining at classy restaurants, and buying expensive digital gadgets that are not necessities and lose their value rapidly.

For a better understanding of good and bad debt watch this video.

This information is intended for general information purposes only and does not constitute legal advice.

Why it's important to diversify your portfolio

While risks get your adrenaline pumping, it’s important to keep that old saying in mind: don’t keep all your eggs in one basket. It’s no different when it comes to your finances and investments. While, as an investor, you try to minimise your risks, the various markets can be volatile.

We’ve compiled a few Money Secrets as to why and how you should diversify your portfolio.

  • Nearly every market is affected by risks. Diversifying your portfolio means that a loss in one market can be curbed by a win in another market. It acts as a shock absorber of sorts.
  • Consider spreading your portfolio across different asset classes. The four main ones are equities, fixed income, cash equivalents, and real estate.
  • Find a good balance between risk and return. This will help you achieve your goals without keeping you up at night.

To view Nedbank’s investment options click here.

This information is intended for general information purposes only and does not constitute legal advice.

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