Is Your Money in the Right Place? Understanding the Color of Money Risk Analysis
When it comes to your finances, one of the most important questions you can ask yourself is: Am I taking on too much risk or not enough? Understanding your risk tolerance isn’t just for investment professionals or thrill-seeking day traders. It’s for anyone who wants a solid, tailored financial strategy that aligns with their personal goals and timeline.
One powerful tool we use to gauge this is called the Color of Money Risk Analysis (COMRA). And trust me, once you understand what it is and how it works, you’ll never look at your portfolio the same way again.
Why Risk Tolerance Matters
Risk tolerance is simply your ability and comfort level with the ups and downs of investing. It's something that naturally changes with age. A 30-year-old may feel okay riding the rollercoaster of the market. But for someone on the doorstep of retirement, that same volatility can feel a lot more like a free fall.
In fact, a recent CFA Institute study found that Gen Z investors have a surprisingly high tolerance for risk—with half saying they’re comfortable taking significant financial risks to achieve their wealth goals. Many even invest in volatile assets like cryptocurrency and gamble in their spare time.
But if you’re a Gen Xer, baby boomer, or millennial with a family and retirement on the horizon, chances are you’re looking for more financial stability, not less.
What Is the Color of Money?
When we assess someone’s financial picture, we often categorize their assets using three colors: green, yellow, and red. Each color represents a different level of risk—and reward.
🟩 Green Money: These assets have low market risk. Think savings accounts, CDs, fixed annuities, and some types of life insurance. They aren’t designed for high growth, but they’re built to protect.
🟨 Yellow Money: These investments carry risk but are professionally managed. Yellow money includes mutual funds, actively managed portfolios, and other vehicles where professional oversight can help navigate market ups and downs.
🟥 Red Money: This is your high-risk, high-reward category. Stocks, bonds, REITs, variable annuities, crypto—these can grow quickly but can also take a nosedive just as fast.
Knowing which colors dominate your portfolio can be an eye-opener.
A Real-World Example: James & Jana
Let’s say we have a couple—James and Jana. They’re in their early 60s and plan to retire in a few years. They’re concerned about running out of money and want to minimize risk.
But when we look at their assets, we find a big chunk is in red money—way more risk than they’re comfortable with. That misalignment could derail their retirement goals.
Using COMRA, we’re able to rebalance their portfolio so it fits their comfort level and long-term plans. Sometimes that means shifting more into green assets for safety. Other times, it’s making sure there’s enough growth potential to meet income needs.
Why It’s So Important
Here's the harsh truth: Losses hurt more than gains help.
Lose 10%? You need to gain 11% just to break even.
Lose 30%? It may take more than 7 years to recover if your growth rate is just 5%.
Lose 50%? You’ll need a 100% return to get back to where you started.
Time is a luxury not everyone has, especially in your 60s.
How to Know Where You Stand
Feeling unsure about where your money falls on the green-yellow-red spectrum?
You’re not alone.
Most people have no idea how much risk they’re really carrying. But the good news is that it’s easy to find out.
Here’s what we recommend:
Know what you own. List out all your accounts and holdings.
Review investment quality. Are your funds strong performers? How are the fees?
Evaluate the big picture. Do your investments work together—or against each other?
Assess your exposure. How much market risk are you really facing?
Match your money to your goals. This is where strategy meets peace of mind.
Take the COMRA Today
There’s a reason we use the Color of Money Risk Assessment (COMRA) with every new client — it works. It gives us a snapshot of your current risk level and helps us build a plan tailored just for you.
Want to better understand what it means before diving in?
👉 View the COMRA Brochure
Ready to find out your Color of Money right now?
👉 Take Your COMRA Assessment
It only takes a few minutes and it could change the way you look at your financial future.
Ask yourself: Is my money where it should be? Am I risking too much or playing it too safe?
Let’s find out together.
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Disclosure:
All content discussed in this article is for informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. Opinions expressed are solely those of Olive Branch Wealth Management, LLC and its staff. The information presented is believed to be from reliable sources; however, Olive Branch Wealth Management, LLC makes no representations as to its accuracy or completeness. This article shall not be construed as an offer to sell or a solicitation to purchase any insurance product in any jurisdiction in which the agent is not licensed. Topics should be discussed with a licensed insurance agent, tax professional, or financial adviser before implementation. Olive Branch Wealth Management, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.
Sources:
CFA Institute Research & Policy Center, Gen Z Investing Report, 2023 — https://rpc.cfainstitute.org/research/reports/2023/gen-z-investing
Barron's, Gen Zers Are Coming of Age. How These Risk Lovers Will Change Investing. — https://www.barrons.com/articles/gen-z-investors-risk-advisors-26fe6c1e
Investopedia, Why Bitcoin’s Value Is So Volatile — https://www.investopedia.com/articles/investing/052014/why-bitcoins-value-so-volatile.asp
