Understand your risk tolerance
It is important that you allocate your savings into investments with a risk profile that suits you. Always remember that risk and reward go hand in hand, but risk is like fire and should be handled with care. In most cases, your risk tolerance will depend on your age.
Experts recommend the following method for assessing how much you should invest in risky assets: If you have low risk tolerance, subtract your age from 100 and the result is the percentage you should allocate in risky assets such as stocks and direct business interests. If you have moderate risk tolerance, subtract your age from 110, if you have high-risk tolerance; subtract 120 from your age.