The other two points on risk taking and investing horizon are closely linked to each other and to what life stage you are in.

In general the ability to take risk and invest more as a proportion of income is higher in early years. It reaches its peak and goes down over the period with increasing liabilities and lower recurring income as one starts reaching retirement.

Let’s see some scenarios-

Age Career Income Saving Spending Loan
21-30 Beginning Increasing Can be increased Can be curtailed Mostly Taken
31-40 Middle Increasing Can be increased Increases with Child expenses / Education Mostly Taken
41-50 Peak Increasing Can be increased Increases with Child education/ Marriage/ Medical conditions Mostly Taken
51-60 Plateau Constant Goes down Increases with ageing/ Medical conditions Mostly Closed
60+ Retirement Becomes Zero Becomes NIL Minimum basic maintenance and healthcare needs to be met Not Taken/ Given


So depending on the life stage you are in, you need decide on the risk you are comfortable with. This in turn will help you decide which financial instrument to invest in.