Author Topic: What has been more harmful on your journey to financial independence?  (Read 891 times)

Money Ronin

  • Apprentice
  • *
  • Posts: 45
  • Karma: +17/-0
Taking too little or too much risk? 

I am risk averse by nature so for me it was taking too little risk.  Examples include buying a smaller house than I could afford in an location where appreciation has been significant or always taking the 30 year fixed rate loan over a 5 year arm.  Just these two decisions alone probably cost me hundreds of thousands.

As I grew older I learned to take more risk financially and it has made a world of difference. That’s what separates me from my peers who are well paid working professionals but likely will never attain FIRE.

Not that FIRE is necessarily their goal but I feel most people (among my peers) are overly risk averse given their financial situation and age.

Sam

  • Shogun, Administrator
  • *****
  • Posts: 408
  • Karma: +79/-1
  • Always curious
Re: What has been more harmful on your journey to financial independence?
« Reply #1 on: February 05, 2019, 09:19:19 AM »
 I felt I could’ve taken more risk if I was more educated early on. This is why I think it’s good to learn as much about personal finance as possible in high school.

I think in general, most people do not take as much risk as they should or could.
Regards,

Sam

LittleSeedsOfWealth

  • Apprentice
  • *
  • Posts: 3
  • Karma: +1/-0
Re: What has been more harmful on your journey to financial independence?
« Reply #2 on: February 08, 2019, 04:51:00 PM »
Yup sometimes I wish I'd doubled down on an opportunity. Looking back everything is always clear. But would I have done differently? Maybe not. I know higher risk comes with higher (potential) reward, but if taking higher risk comes with losing my sleep everyday it's probably not worth it.

Most people just don't have that high of a risk tolerance.   

MyFreedomDollar

  • Apprentice
  • *
  • Posts: 2
  • Karma: +0/-0
Re: What has been more harmful on your journey to financial independence?
« Reply #3 on: February 15, 2019, 12:55:29 PM »
@Money Ronin - I am with you, risk averse by nature... I am sure that holding too much cash has been harmful for my journey to financial independence.  Now that I have been invested for an extended period of time I can recognize the material significance that time in the market provides to an investment portfolio. There is something comfortable about having a nice cash hoard, but it has cost me tens of thousands over my relatively short investing career.  I hate to think about the missed returns over the next 30 years!