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previous:This knowledge forms the basis for all ensuing financial decisions, empowering people to make wise choices that gradually increase their wealth. Comprehending financial objectives. One of the most important steps in reaching financial success is setting financial goals.NEXT:Also, knowing one's level of risk tolerance is essential when choosing investments. The term "risk tolerance" describes a person's capacity and willingness to withstand changes in the value of their investments. Due to their longer time horizon for recovering from market downturns, younger investors might be more risk tolerant, whereas those who are getting close to retirement might favor more conservative investments in order to protect their capital.
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