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)

When Investments Lose Money

When Investments Lose Money

#67 I share with you what questions to answer to decide whether you should sell, hold or buy more of an underperforming investment. Show notes at http://moneyfortherestofus.net/mny067-investments-lose...

29 Heinä 201527min

Impermanence and Winning by Not Losing

Impermanence and Winning by Not Losing

#66 Why focusing too much on the future and too little on the present can be dangerous. Show notes at http://moneyfortherestofus.net/mny066-impermanence-winning-losing/ To sign up for the Money For th...

22 Heinä 201526min

Greece—What Really Caused the Crisis and Why It Never Ends

Greece—What Really Caused the Crisis and Why It Never Ends

#65 How the Greek depression and the euro crisis started with Greek citizens just wanting to buy a decent car. Show notes at http://moneyfortherestofus.net/mny065-greece-really-caused-crisis-never-end...

15 Heinä 201527min

The Pitfalls of Private Real Estate Investing

The Pitfalls of Private Real Estate Investing

#64 Should you invest in a rental property? Here are some things to consider and pitfalls to avoid. Show notes at http://moneyfortherestofus.net/mny064-pitfalls-private-real-estate-investing/ To sign ...

8 Heinä 201529min

Alarmists and the Economics of Collapse

Alarmists and the Economics of Collapse

#63 Why economic alarmists are dangerous, and what has to happen for the financial system or economy to collapse. Show notes at http://moneyfortherestofus.net/mny063-alarmists-economics-collapse/ To s...

1 Heinä 201530min

What Dying Bees Can Teach Us About Asset Bubbles and Income Inequality

What Dying Bees Can Teach Us About Asset Bubbles and Income Inequality

#62 The link between honey bee colony collapse, asset bubbles and income inequality. Show notes at http://moneyfortherestofus.net/mny062-income-inequality/ ‎ To sign up for the Money For the Rest of U...

24 Kesä 201528min

How Much Should You Spend In Retirement?

How Much Should You Spend In Retirement?

#61 Why your retirement spending rate should vary over time based on individual and market circumstances. Show notes at http://moneyfortherestofus.net/mny061-retirement-spending/ To sign up for the Mo...

17 Kesä 201528min

Are You Hoarding Or Investing?

Are You Hoarding Or Investing?

#60 What is the difference between hoarding and investing. Most people do both. Show notes at: http://moneyfortherestofus.net/mny060-hoarding-investing/ To sign up for the Money For the Rest of Us Ins...

10 Kesä 201529min

Suosittua kategoriassa Liike-elämä ja talous

sijotuskasti
mimmit-sijoittaa
psykopodiaa-podcast
rss-rahapodi
ostan-asuntoja-podcast
rss-rahamania
herrasmieshakkerit
rahapuhetta
rss-laakispodi
rss-sisalto-kuntoon
rss-sami-miettinen-neuvottelija
leadcast
rss-lahtijat
rss-bisnesta-bebeja
rss-seuraava-potilas
sijoituspodi
rss-karon-grilli
rss-juurisyy-johtamisesta-kilpailuetua
rss-draivi
rss-johtoajatuksia