Are You Taking Enough Aspirational Risk?

Are You Taking Enough Aspirational Risk?

Why we need distinct risk buckets: balancing our natural loss aversion with the allure of opportunities that offer the potential for massive upside.

Topics covered include:

  • What is modern portfolio theory, and what are some of its flaws
  • Why so many people have gotten wealthy by being undiversified
  • How to balance personal risk, market risk, and aspirational risk
  • How prospect theory explains our attraction to positively skewed opportunities
  • Why most people won't get wealthy unless they take some aspirational risk


Sponsors

NetSuite

Delete Me – Use code David20 to get 20% off

Insiders Guide Email Newsletter

Get our free Investors' Checklist when you sign up for the free Money for the Rest of Us email newsletter

Our Premium Products

Asset Camp

Money for the Rest of Us Plus


Show Notes

Portfolio Selection by Harry Markowitz—The Journal of Finance, Vol. 7, No. 1. (Mar., 1952), pp. 77-91

Safety First and the Holding of Assets by A. D. Roy—Econometrica, Vol. 20, No. 3 (Jul., 1952), pp. 431-449

The Misbehavior of Markets: A Fractal View of Financial Turbulence by Benoit Mandelbrot and Richard L. Hudson—Hachette Book Group

Beyond Markowitz: A Comprehensive Wealth Allocation Framework for Individual Investors by Ashvin B. Chhabra—The Journal of Wealth Managment, Vol. 7, No. 4, pp 8-34, Spring 2005

The Wealth of Households: 2021: Current Population Reports by Briana Sullivan, Donald Hays, and Neil Bennett—Census.gov

Average, Median, Top 1%, and all United States Net Worth Percentiles—DQYDJ

PROSPECT THEORY AND STOCK MARKET ANOMALIES by Nicholas C. Barberis, Lawrence J. Jin, and Baolian Wang—NBER WORKING PAPER SERIES

Related Episodes

82: Unlocking the Power of Positive Skewness: Strategies for Investing, Business, and Creativity

460: Should You Be Invested 100% in Stocks Before and During Retirement? A Recent Study Says Yes.

421: Beware of Survivorship Bias When Investing

Investing Rule One: Avoid Ruin

229: Stop Maximizing Your Returns Using Modern Portfolio Theory


See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Jaksot(571)

How Much Should Your Net Worth Grow Each Year?

How Much Should Your Net Worth Grow Each Year?

The intricate dance between profession, risk, lifestyle, and luck in determining how net worth grows.Topics covered include:The various factors that shape the growth of net worth, including profession...

10 Tammi 202426min

Should You Be Invested 100% Stocks Before and During Retirement? A Recent Study Says Yes

Should You Be Invested 100% Stocks Before and During Retirement? A Recent Study Says Yes

The pros and cons of investing your retirement assets 100% in equity, including half in international stocks. Why the 4% spending rule is too aggressive.Why historical asset class return studies that ...

3 Tammi 202425min

Listener Q&A on Investing and Living

Listener Q&A on Investing and Living

We close out 2023 by answering your questions on active vs passive management, market timing, investing for status, what we learned from Charlie Munger, thoughts on a coming recession, worst investmen...

13 Joulu 202344min

Dissecting Stock Returns: Financial Engineering or Genuine Growth?

Dissecting Stock Returns: Financial Engineering or Genuine Growth?

Do the impressive returns in public and private markets stem from strategic financial engineering or reflect actual economic growth?How corporate profit growth is linked to economic growth, even thoug...

6 Joulu 202327min

AI's Fork in the Road: Societal Bliss or Existential Threat?

AI's Fork in the Road: Societal Bliss or Existential Threat?

One year after the release of ChatGPT, we explore the positive and negative paths AI could take and what individuals can do to assist with a positive outcome.Topics covered include:How David uses AI t...

29 Marras 202324min

Using a Checklist Approach To Investing - The Money for the Rest of Us Philosophy

Using a Checklist Approach To Investing - The Money for the Rest of Us Philosophy

In this bonus episode, David visits with Bill Yount and Becky Heptig of the Catching Up to Fi podcast in a wide-ranging discussion on investing using a systematic checklist approach.SponsorsMadison Tr...

22 Marras 20231h 18min

Is Tourism Harmful or Helpful? The Economic and Cultural Impact of Global Travel

Is Tourism Harmful or Helpful? The Economic and Cultural Impact of Global Travel

What are the economic and cultural benefits of tourism. What are the downsides to too much tourism. How to find the right balance.Topics covered include:How short-term rentals have changed tourismHow ...

15 Marras 202326min

Easier Investing, Richer Life: TIPS Ladders to Annuities

Easier Investing, Richer Life: TIPS Ladders to Annuities

What are the pros and cons of partially funding retirement expenses with an inflation-indexed bond ladder versus an immediate annuity? There is a big downside to TIPS ladders that many investors don't...

8 Marras 202327min

Suosittua kategoriassa Liike-elämä ja talous

sijotuskasti
mimmit-sijoittaa
psykopodiaa-podcast
rss-rahapodi
ostan-asuntoja-podcast
rss-rahamania
rahapuhetta
rss-laakispodi
rss-sisalto-kuntoon
herrasmieshakkerit
rss-lahtijat
rss-bisnesta-bebeja
rss-seuraava-potilas
inderespodi
rss-sami-miettinen-neuvottelija
leadcast
timanttia-hiomassa
rss-kohti-unelmia
rss-juurisyy-johtamisesta-kilpailuetua
rss-porssipodi