Risk-free investing? No such thing.

A great article in CNN Money states that there is no such thing as risk-free investing. A reader inquired, “What is the best no-risk way to invest my $500,000?”

And the answer is that there is always risk—even if it’s not immediately apparent. You can avoid certain kinds of risk by choosing a particular investment, but you then open yourself up to other types of risk.

You’ve worked hard to acquire your wealth, and you want to keep it—so that it can support you during your retirement and have a meaningful impact after you’re gone. But you shouldn’t—and can’t—try to eliminate all risk.

When people talk about a low-risk or no-risk investment, they generally mean that they want to protect their money at all costs, both the principal amount and the earnings that the investment gets them. If the market implodes, they want their money to still be there.

That type of reassurance can be obtained from savings accounts, Treasury bills, and that’s pretty much it. Because savings accounts are insured by the FDIC, your money will always be there—barring a complete meltdown of the government.

But these kinds of investments often have very low returns, making you vulnerable to not having enough money in the long run. If you’re saving for retirement, you could easily fail to save enough to maintain your current standard of living or have extra left over to leave to your family.

So, what should you do? That will depend on your specific financial circumstances and how much risk your portfolio can tolerate. Perhaps you may want to set aside the money you know you’ll need in the next year or so into a savings account and put the rest into slightly riskier—but potentially more profitable—investments, like stocks and bonds.

If retirement is closing in, stability and low risk in your portfolio should be a high priority. Still, you’ll need some growth to give your retirement money more of a cushion and account for inflation.

Talk to an Alpharetta estate and financial planner about how you should be investing your wealth. A knowledgeable planner can help you understand how to make the most of your wealth, so you have enough for retirement and beyond.

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