Risky Business: You May Not be as Daring as You Think

I thought I was through with exams when I finished college. Then my financial adviser (a.k.a. stockbroker) had me take a test to measure my tolerance for risk. He said, there were no right or wrong answers, but I knew better.

Once I had taken a personality test when I was in career transition (a.k.a. unemployed). My counselor had said the same thing, "There is no right or?," but when he told me my score he noted it was on the edge of the bell curve - the wrong edge. My need for acceptance by others was high; so high that I could not confront a taxi driver who gave me zero change from a $10 bill, on a $4.50 fare.

I was very leery of taking this "risk-tolerance profile." As I expected the questions showed that I was a total "wuss." (In Pittsburgh, if you're 15 and a guy it means you always cover your ears in winter).

A typical question; if your portfolio dropped 21.8 percent in one year, would you:

a. Sell all your equities?

b. Sell 1/3 of your equities and buy intermediate-term, tax-free municipals?

c. No change, staying the course?

I selected 'c' not because I believed in my strategy but out of total fear.

And yet deep down, when it came to the important things in life I felt that I was a risk-taker. I could be as much a risk-taker as an F-16 fighter pilot or a New York City undercover cop. However, no test ever asked the real important questions of life, the kind of questions that affected my daily reality. Questions like:

You have to drive to the airport. You get in your car, turn on the engine, and the gas gauge is on "E." Do you: a) immediately fill up, b) drive to the airport but don't put on the air conditioning, or c) drive back and forth without ever looking at the gas gauge again. OK, now lets add some real risk to the above question. What is your answer assuming your spouse is in the car with you?

Now let's deal with food instead of hedge funds. For example, for breakfast you like your bagels dark but definitely not burned. You've just put a bagel in the toaster, and it is just not dark enough. You put it in the toaster again, just nudging the dial to the optimum position, taking into consideration the heat already generated and the level of darkness around the edges of the bagel. As you wait for your bagel, do you: a) stand there staring at the bagel, b) let the dog out, c) get your newspaper from the driveway and check the Knicks score.

How would your answer change if it were your last bagel?

Now lets deal with the most risky part of life - relationships: Its 11:30 p.m., Thanksgiving Eve; your wife is exhausted, having cooked the 24-pound turkey and the rest of the food. She asks you to place the turkey in the fridge in the basement. She reminds you of last year's fiasco when you forgot to refrigerate the bird. Do you: a) do it immediately; run upstairs to report to her that you completed the task. You then return to the basement to ensure that you have closed the fridge door, b) leave a note for your teenage son to do it when he comes in after midnight.

Now for extra credit. You get a call from your high-school sweetheart. She asks to meet you for coffee in an hour. Do you: a) decline and tell you wife about the call, b) decline and not tell you wife about the call, c) ask your son if you can borrow his mousse. You get the idea. On this kind of test, I would score very high.

I figure once I fine-tune my questions, I could use this kind of questionnaire to screen professionals trying to give me advice. For example, my internist wants me to come in to review the results of my prostate exam and to discuss the different options and the risks involved with each course of action. I may surprise him and ask him to complete my questionnaire first. I want to see what kind of risk-taker he is.

P.S. My stockbroker just took my exam. He failed. I am looking for a new broker. Any recommendations?

Hesh Reinfeld writes a syndicated business humor column. You can read additional examples of his columns on his website: http://www.heshreinfeld.com Or contact him at [email protected]

In The News:

3 Investing Lessons From Dad Jokes  Scottsbluff Star Herald
Reassessing Personal Finances  The New York Times
3 Proven Ways to Double Your Money  Waco Tribune-Herald

Risky Business: You May Not be as Daring as You Think

I thought I was through with exams when I finished... Read More

Financial Security

1) HOW TO LOOK FOR A JOBA) The Chronological Curriculum:1.... Read More

Organizing Your Finances - Thinking Outside the (Shoe) Box

If you're like most people, your personal financial records are... Read More

College Expenses: Seven Ways to Save on an Education

Many people graduate from college owing thousands of dollars in... Read More

The World is Not Enough - Calling for a More Ethical Approach to Personal Finance

At a time when the entire world's attention is focused... Read More

Budget Planning - Its Elementary My Dear Watson

Does it feel like you have to be Sherlock Holmes... Read More

Understanding and Controlling Your Finances

Have you ever wondered what it would be like to... Read More

What Happens if You Die Without Making a Will

If you die without making a Will in the UK,... Read More

Vesting and Your 401(k)

Do you have a 401(k) retirement account? Are you vested... Read More

Identity Theft is a Major Problem: Whose Responsibility is It to Protect the Consumer?

We have heard a lot about consumers' personal information getting... Read More

How To Protect Yourself Against Identity Theft

Identity theft is a serious crime that continues to grow.... Read More

Are You Ready To Be Fired?

Your boss has just informed you that your department is... Read More

Reduce College Debt with Scholarships

Six Scholarship judges were sitting around an oval table. Forms... Read More

Five Secrets for Long-term Financial Success

Future financial success is not a guarantee that any one... Read More

Check Fraud and Verification

Before buying personal or business checks you should inform yourself... Read More

The Benefits of Banking Online

How many drawers did you have to look through to... Read More

Save Money on your Clothing Budget. Tame the Closet Monster!

Reducing the clothing budget was a serious challenge for me.... Read More

Your Dry Cleaner?s Double Standard

Women are charged more for dry cleaning services. Don't fume,... Read More

Save Your Money, Dont Give to Charity Scammers

**If it's Spam, it's a Scam!- If it sounds too... Read More

Should You Borrow From Your 401(k) Account?

If you have a 401(k) account, it can be very... Read More

Portfolio Planning can Lead to Irreconcilable Differences

The judge had to ask the question, and we had... Read More

What is a Traditional IRA?

With a traditional Investment Retirement Account (IRA) you pay taxes... Read More

Kundalini Lessons - Money

I've been going through and interesting growth period lately that... Read More

What Are We Teaching our 2005 Graduates about Money?

Now that we are in the month of June I... Read More

Budgets And Eating - Can They Co-Exist?

Whatever your reason for having a tight budget, the truth... Read More