As I mentioned previously about my own quiz results, my tendency is towards low risk investments. Much of this is due to my nature as a generally cautious person that likes minimal controlled risk. Adrenaline junkies, however, thrive on risk and the unknown, and therefore are more likely to invest in high risk ventures that could offer large returns if successful—or alternatively, serious losses if “luck” is not on their side.

Sometimes when we risk nothing, we gain nothing. A family member of mine contemplated investing in Microsoft when it was a young company and the stock was cheap. Little did they know of the technology empire that would soon unfold, and if they had decided to invest, they would be a millionaire right now. Sometimes inaction is your worst enemy.

Being either too squeamish or too reckless in regards to investing is not desirable. It is ideal to strike that delicate balance, and to temper any natural tendencies with a constant attempt to make informed investing decisions. Information can help conservative types to take chances that they can feel comfortable with, and it can help aggressive investors to focus on investing options that offer some reasonable risk with the possibility of good returns.

If you are younger, you can afford to be a little more adventurous in your investing, because time is on your side. In fact, it is encouraged that you diversify and invest in some higher risk/higher return stocks.

However, as you edge closer to retirement, it is recommended that you gradually adjust your risk level. The reason for this is simple—if you are closer to retirement, you do not have as much time to recover from a potential downturn.

Because the markets are volatile, those who are younger in age can spend their lifetime weathering the storms as they accumulate wealth over time. Those closer to retirement will want to taper their investments in more volatile stocks and to instead focus on nurturing the earnings that they have gathered over time.

Risk tolerance may also go down with age. Think about the difference between a new driver in his late teens and an experienced driver who is a senior citizen—who tends to drive more carefully? Normally the senior citizen will be more conservative in their driving habits, often even overly cautious.

This modification in driving according to age and declining ability is comparable to what can happen with older investors—they become a little less willing to “test the limits.” Similarly, an older driver who does get into an auto accident has less of a chance to survive and recover, as does an older investor who sustains a significant investment loss.

However, there are other variables that can also determine risk tolerance even later in life, including the person’s general attitude towards risk and the amount of available assets. Due to our modern extended life span, investing does not end near or at retirement—it just gets modified accordingly.

My risk tolerance quiz results tells me essentially that I am a coward.

The quiz confirmed what I already knew—that I am not very adventurous in regards to investing. I have never been a gambler, and to me, investing sometimes feels an awful lot like gambling.

When I signed up for a 401K (retirement savings account) at a previous employer, we went through an informational session that actually gave me a lot to remember. Rather than just essentially sign up for a glorified savings account, I did add in some low-risk mutual funds that I handpicked. However, when the economy tanked, and I lost at least half of the small amount that I had, I got out.

If you have a low tolerance for risk, there’s good news and bad news.  The good news is that I will probably never be at risk of becoming a compulsive gambler.

The bad news, as I learned when I signed up for my 401K, is that just having savings over a lifetime will produce an unsustainable retirement. Using an exponential example, the presenter explained how you would have to have millions of dollars saved up in order to maintain a decent existence when you reach retirement. This sounds dramatic, but the numbers speak for themselves, and the problem primarily is due to inflation over time. You need a high rate of investment return to meet the demands of tomorrow’s higher costs as a result of inflation over time.

Due to my age in particular, I can stand a little risk if it means an improved long-term result. Clearly ‘diversification’ is the word that I need to remember.

What type of investor are you?  Feel free to comment below and share your outlook.

I recently came across a helpful webcast sound recording and quiz about this very subject. The recording is about 4.5 minutes long, and covers the subject of risk tolerance. Upon taking the quiz, it should help to determine your tolerance for risk and in turn how it affects your investment style.

Financial Straight Talk Tolerance Quiz

Some factors that can determine your risk tolerance (as discussed in the webcast) are age/proximity to retirement, personality, and economic state. We can discuss these factors in more detail at a later point. But you can be sure that they definitely can play into the answers that you provide for the quiz, whether you realize it or not.

Why don’t you take some time today to listen to the recording and take the quiz for yourself? I will share my results next time.

I have not received one of those statements for awhile, so I was surprised to find out recently that the Social Security Administration is no longer sending them out. I guess it is a sign of the times as far as technology and budget crunches, but now that information is available online instead.

Everyone can create a “my Social Security” account at http://www.socialsecurity.gov/mystatement/.  Once you register, you can have access to the same information that was previously available in the mailed statements.

This new setup may present a problem to those that are not Internet-savvy or do not have regular access to a computer or the Internet.  But the good news is that statements will still be received by those 60 and up who are closer to retirement age and not already receiving benefits.

For more information on this money-saving action taken by the Social Security Administration, you may want to check out this article U.S. News & World Report: Social Security Statements Now Available Online.

Have you already registered for your SSA online account? What has been your experience so far?  Feel free to comment and let us know what you think about the new reporting system.

But there are other resources that are free that can encourage and reward kids for their summer reading:

• Barnes & Noble Summer Reading Imagination’s Destination—Kids who read 8 books and document it on the downloadable journal can choose a FREE book from the store’s list when they turn in their completed reading journal at local participating store locations.
• Scholastic Summer Challenge—Kids can log their reading minutes to earn cool rewards. Storia, the free eReading app from Scholastic can provide age/grade appropriate reading selections from the comfort of home, and when you sign up, you get 5 FREE eBooks.
• iVillage PBS Kids Summer Reading Community Challenge—This free 6-week program provides daily emails with tips and activities to keep your kids reading and learning this summer. You will also get book suggestions, discounts, free downloads of PBS Kids shows, and daily chances to win $1,000 and other prizes. Log your reading on the go with the free Scholastic Reading Timer phone app.

No more boredom or spending a fortune this summer. Take advantage of the activities suggested to you this week and make sure to share them with fellow parents. Happy Summer Break!

But did you know that the library can offer your kids a fun summer full of free activities?  Many libraries offer free kids programs that extend through a majority of the summer.  These programs can involve arts and craft workshops, field trips, reading sessions, special events and performances, snacks, rewards programs, and more.  Most of these programs are for younger children (12 and under), but some locations do offer similar programs for teens.

Programs like this can not only encourage kids to read throughout the summer, but it provides a safe and enjoyable environment for them to go to on a weekly basis.

Please contact your local library to find out if they participate in a summer kids program.

Now these movies may not be new releases, but they could be kid-appropriate movies that your kids may or may not have seen (FYI—kids often don’t mind seeing the same movie again). Some movie theatres will have these movies one or two days per week in the morning during the summer (often before they start their regular movie schedule).

Here are some movie theatre chains that offer free or reduced priced movies:

• Regal Summer Movie Express
• Cinemark Summer Movie Clubhouse
• Classic Cinemas Wednesday Morning Movie Series (locations throughout IL)
• Clearview Cinemas Kids Club (locations throughout NY and NJ)
• Cobb Theatres Free Summer Kids Shows
• Harkins Theatres Summer Movie Fun
• Aliance Entertainment/The Great Escape
• Marcus Theatres Kids Dream Summer Film Series
• Storyteller Theatres

There may be other movie theatres that participate in free or reduced movie programs for children during the summer. Please contact your local movie theatre to confirm participation.

Let your kids’ good grades translate into some good games. Chuck E. Cheese’s offers FREE game tokens with their Tokens for Grades program. When your child brings in their most recent report card, Chuck E. Cheese’s will give them up to 15 tokens per child to reward them for their hard work. All grading systems are accepted, but the offer is only valid with a food purchase (why not grab some lunch or dinner while you’re there?).

If you plan to go back to Chuck E. Cheese’s throughout the summer, I would definitely recommend that you sign up for their email newsletter to receive money-saving coupons on a regular basis. If you want more free tokens at a later date, encourage your kids to do what they are supposed to by using Chuck E. Cheese’s Rewards Calendars. Whether they complete their daily chores, get dressed on their own, or are on their best behavior, track their progress, and then take the completed calendar in for 10 free tokens.

With these fantastic opportunities to save money at Chuck E. Cheese’s, summer can be all fun and games with minimal change from your pocket.

But there is hope, and I want to spend this week focusing on some free or cheap activity ideas for your kids. One of my personal faves is KidsBowlFree.com. This is one that you want to sign up ASAP for, as it starts pretty early.

Once you register your kids for the summer (you have to register annually), your kids get 2 FREE games of bowling everyday all summer long. You can look up your local bowling center to find one in your area that participates. If your favorite bowling alley is not listed, you may want to recommend that they join.

If you will be going with your kids to bowl, KidsBowlFree.com offers a discounted Family Pass for $24.95 that covers 2 games per person per day and covers up to 4 adults per pass. Shoes may cost extra for both kids and adults or you can bring your own bowling shoes (varies according to each individual bowling center).

Free bowling all summer? You can’t beat that. Make sure to sign your kids up and pass this blog post along to your friends who are parents. They’ll thank you for saving their dollars and sanity this summer.