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.