At the request of our financial advisor, we completed another questionnaire about our attitude to financial risk. Things have changed since we were last assessed and it has me thinking once again.
In spite of taking some very dubious risks in the past*, I like to think of myself as being a cautious risk taker with money. As an example, we have two cars – a Toyota and a Honda – both chosen for their long term reliability, not their sporty excitement or exotic flashiness. I think this translates into our attitudes towards money.
It was back in 2017 I was classed as ‘low to medium’ in terms of the risk I was prepared to take in order to gain financially. Rachel was a little higher than me.
Rolling forward four years, we have undertaken the same questionnaire based assessment, a sort of psychological profile. Our attitudes have both changed by shifting up a gear and can be described as slightly above average in terms of the risks we are willing to take. This means we are seeking
“a good return above inflation and willing to see our capital fluctuate in value over the short to medium term”
This is all very fine and dandy but I’m always aware of how finely balanced our finances are. We know what money we will need in the short term, the medium and long term with our finances jigged accordingly. We need to take some risks, otherwise money will gradually be eroded by inflation i.e. higher returns = greater risk.
I remember one of the questions asked how anxious we would feel in the event of turbulent times. I am moderately nervous about this, so if our funds fluctuate and significantly drop in value for any length of time, I get a bit twitchy. And yet I know you have to hold your nerve in those times, to ride it out knowing those volatile funds are invested for the long term – so I have to remind myself of these things – but I’m not always a natural at this!
And then I think again. I reflect on my Christian faith, how we depend on God for everything we have: our lives, our talents, gifts and money. There is so much to learn about money in the Bible. For me, the most important lesson is for me to trust God on this and to recognise how it all comes from Him in the first place. Like grace itself, I deserve nothing and yet I feel so blessed.
*Dubious risks in the past? Yes, there have been quite a few. One of them is the tale of the monkey puzzle investment which is worth reading to the end.