Risk
October 11, 2006
The latest post on ARRDPD is about risk. Here’s my favourite quote:
Then again late night Saturday I was sitting at a No-Limit Texas Hold’em Poker tourney. I had done fairly well to become chip leader with 9 players left. I began to tighten up. I had all these chips and I didn’t want to lose them. An hour later I was the short stack. Wow! How did that happen? I was playing not to lose.
I commented about my grandfather and how he is extremely risk-averse, and would not invest in a franchise that would have doubled his normal ROI (he invests in zero-risk bonds, GICs and the like).
What’s your risk tolerance? I’m a fairly wreckless person, I admit to driving too fast, drinking a bit too much, and my investments show it. But, I’m only 26 and can afford a lot of risk at this point (financially). My belief is that you can’t succeed in life without taking some risks.
Risks (in no particular order):
- Purchased a house at age 20
- the house appreciated by almost 50% over the next 5 years
- last year we used the equity to put 25% down on a much nicer home - Purchased an investment property at age 25
- the property needed some work, but provides a positive income - Purchased a second invesmtnet property at age 26
- Got married
- Completed a Masters degree
All of these risks have paid off for me in one way or another. Without having taken them, I can’t imagine how boring life would be.
Tags: Real+Estate, Risks
December 5, 2006 at 9:32 pm
[...] Following in the footsteps of my previous posts on Risk and Barriers which were inspired by Ramit's post here , I thought I would talk a bit about that wonderful friend called learned helplessness. I thought our friend was worthy of a post after reading Casey Serin's post where he talks about all of the reasons why he doesn't want to rent his properties out to try to avoid foreclosure and make some of his mortgage payments. You can see he spends a lot more time talking about the potential down sides of renting out the houses, but not much time considering the benefits! My comment is burried in there somewhere. [...]