Personal Finance
Risk Capacity
Definition
What is Risk Capacity?
An investorA person or organisation that commits capital with the expectation of a financial return.'s financial ability to withstand losses without jeopardising essential goals.
Example in practice
How This Looks in Practice
A person with stable income and no near-term need for funds has greater risk capacity.
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Related Terms
Personal Finance
Savings
Money set aside rather than spent, often for emergencies or future goals.
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Liquid savings reserved for unexpected expenses or income disruption.
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Total assets minus total liabilities.
Retirement InvestingWithdrawal Rate
Annual portfolio withdrawals divided by the portfolio's starting or current value.