Investment managers always ask this question and I never know what to answer. I feel like everyone's answer must be the same: maximize return, minimize risk.
What are possible answers to this question you're looking for?
What are possible answers to this question you're looking for?
The expected answer is mainly about what risk you are able to tolerate, i.e. how soon you will need the money back again.
- how many years until you plan to retire?
- how much do you need in retirement? How much do you expect to receive from social security/other income sources?
- do you have/are you planning to have kids? Are you going to pay for college? If yes, how much might that cost?
- are you expecting any other big expenses in the future? e.g. wedding, down payment on a house
- are you planning to take a sabbatical at any point? If yes, for how long and how much do you expect to spend?
Also "minimize risk" is not consistent with "maximize return" so that's not even a valid answer. Someone might say "I wanna put it all on Black", and someone else might be saving for their child. Lots of really varied answers are possible.
Your goal could be to live on an island mansion in 20 years.