Risk Taking Ability

How much risk a person can take in his life?

It depends on the risk taking ability of the person .According to me the risk taking ability of a person depends on many things such as age,family situation , economical & political environment etc.

I listen  from many people that when anyone has to invest in equity ( which is most risky) then he has to take care of the following formula

Percentage investment in equity = ( 100 – age of the person ) %

Remaining investment he can do in Unique Investment Insurance Plan,Mutual Fund ,Governments Bonds & debentures.

Family situation also plays an important role during the decision of investment & saving because if your family situation is good then you can save a bigger part of your income and can invest more money in equity.

Economic & Political environment : If the economical & political environment of the country is good then investment in equity  becomes better and then investment in equity is not very risky . We can say it is good and It can give a higher return.