I was having a conversation with my uncle about each other's investment and when I told them that I am investing in Crypto along with stocks, he was a little taken back and started giving lectures about how Indian law on crypto can adversely affect the crypto prices and all. But I never got this comment about Crypto investment from any of my friends which made me realize that does age affect your investment decisions.
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When I talk to my father about investment, he advises about LIC, Fixed Deposit and others, which means he wants us to take less risk and when I talk to some of my friends they advise about Crypto, Stocks etc and if you see there is a generation gap and that is because of this generation gap, there is a different investment decision.
And that is true also because our mindset and goals change over time when we grew older. Like at the age of 25 there is no risk so we can totally invest in Crypto, at 50 it will be totally different where we need to have an emergency fund, retirement fund, some crypto and other money in savings too. And thus at every age, the investment decision changes.
Minimize Investment Risk Over Time
Over time we cannot keep the high-risk investment in our portfolio which is different from when we are young. It is because the young can hold the high-risk investment for years but when we get older, we have limited time to withdraw and thus people would like to keep that in a less risker investment instrument. The high-risk investment increases the volatile nature of your portfolio.
Investing at different age
When we are in our 20s we can invest in high risky assets but when we are in the 30s the exposure of high risky investments should minimize whereas when we are in the 50s the high-risk investment should be very less in our portfolio so that we will be better off in your retirement. Similarly, when people get financial freedom they try to keep most of their investment less risky so that it will give them enough time to recover any market losses.
So in short, age does affect our investment journey but we should not get too defensive we should have Crypto in our investment at any age.
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While age can play a role so can many other factors such as interest, time, home ownership, etc.
To your last sentence I don't think you should feel defensive no matter what you are investing in, just being an investor is a big accomplishment that many or maybe even most will not accomplish.
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I agree...the best thing is to save and then allow the money to talk through investment.
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Yes, as you mentioned age plays a role. Defensive in the sense that we should have more towards our savings and debt fund rather than have it in risky assets when age is not with us.
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Yes! Generally speaking, age does affect the way we take risks in life as younger people seem to believe to have many opportunities to learn and tend to take more risks while the weight of responsibilities makes older people somewhat confined to challenges with very few risks.
Having said this, I believe it also depends on how enlightened you are on a subject matter too. There are lots of older people involved in cryptocurrencies as well as the conventional stocks and fixed deposits, what I think the major difference is the amount of information we have at our disposal.
This was a very good read, thank you for posting.
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Yes, there are a lot of older people who do invest in crypto or high-risk assets, but again it might be a very less percentage of their portfolio. what I mean is when you get older, we always should always keep a balance in our portfolio.
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Reducing the high risk when we are at 50s depends on the time the investment will pay because I believe a 50s old men still has time to invest unless you wish your self another thing. Some one can join a short term investment.
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The age is not with him, at 50 when you need money you cannot pull out from a high-risk asset, but you have to use Debt or savings.
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Ok
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Our parents lives in the age when the investment in government bonds and FD gives them healthy return but now those options are shrieked to minimum return....best way is to move with wind and keeping firm foot at each level...
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That's also true, but again for them even of the returns shrink they want it to play it safe I.e. investing in fixed deposit itself. But the new age investors are showing them how to get wealthy
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I would say that age (as well as the personal situation) does make a great difference - and should make. A person in their 20s can take a lot more risk, than a person in their 40s - or 70s. A person, who has to take care of a family can not take as much risk as a single person. Since there are big differences in life, there are big differences in the regarding investment styles as well.
I also think it depends on the social net of your community and country. If you know, that no matter what happens, someone will take care of you, it is a lot easier to take a higher risk, as if you know, that if not yourself, nobody is going to help you.
Thanks for sharing your thoughts on the subject!
Cheers,
@andy-plays
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That's where we Indians have to save for our retirement as there is no minimum wage for us. And thus we have to save for retirement, Medical and everything and all have to be taken care by the individual itself.
I think this is great that people invest differently depending on their age. Older people need to think about using their assets soon in order to live a retired life.
Young people can just take risks and lose it all so they should take risks.
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Yes that's where we need to decide the portfolio diversification based on the age.