The new color of money doesn’t refer to the new hundred dollar bill, but rather to a unique way of classifying different types of investments. At First Rate Financial Group, we’ve noticed that people often worry about accumulating a sizable nest egg for their retirement, but they tend focus on how to collect the money rather than focusing on where their retirement assets should be located. To help our clients better understand where they should put their assets, we use a color scheme that represents the level of asset risk and safety. The three colors we use to describe the risk or safety of certain assets are red, yellow, and green.
Red money is risky, but in the world of investing, that doesn’t mean bad. Usually people would associate red with stop signs, stop lights, and emergency lights. Let this remind you to be cautious when investing in red assets. Our Portland wealth managers warn investors that red money can be highly volatile, but it can also come with some of the best growth opportunities. These types of assets have the potential to make the most money and grow your nest egg considerably. However, they can change suddenly and cost you money as well.
Though yellow money is also considered risky, it’s not quite the same as red money. Though it’s true that yellow money may contain the same types of investments as red money, it benefits from professional financial advice. Professional money management with yellow investments means ensuring that the investing strategies you plan are carried out and used to make investment decisions. This can mean creating portfolios that are designed to create income, combat volatility, and plan for long-term investment opportunities. Your financial advisor in Portland can help you create such a portfolio and assist you with investing decisions that can potentially make you as much as red money, but also have restrictions and guidelines to provide a safety net.
Green money represents safe assets. This means that you won’t be creating the type of growth you would typically see with red and yellow investments, but you would have peace of mind knowing that your assets are safe. This means that you’ll know how much money your assets are accruing and the potential for loss is slim to none. It also means that you will have steady access to your money throughout your retirement. These types of assets require less overt financial advice since there is almost no risk of volatility.
What you need to decide as an investor is where you want your assets allocated. Do you want a mixture of these colors, or would you feel more comfortable settling on just one or two? If you’re not sure about where you want your assets, meet up with one of our financial advisors in Portland to discuss your retirement investing options.