You must be risk neutral

You must be risk neutral

Behavioural economics - Decision making with an uncertain pay off

I hate risk averse people

I have done so many high risk investments that by now I’m numb to it and the fear I once had to lose it all it’s been replaced by the certainty that no matter what I will win something, even if I lose the funds invested I know that learning can not begin until I fail.

The traditional investor in property will do a Single Let - rent it out to a family or a professional instead of doing a Holiday Let for example where the income received flatuates every single month and is completely unpredictable. This is why traditional methods of finance like me releasing on the high street bank to get finance to grow my business don’t work and the traditional economic model of earning 0.5% interest by keeping the money I have on a saving account would never appeal to someone like me.

I love the adrenaline that business gives me, it turns me on to think that I can make 5 times more money than some1 who owns the property that I’m leasing purely because I’m prepared to take risks and I’m mentally strong enough to 1 keep pushing myself to make it work and failing is not an option and 2 in case I try my best to make it work and I still

Even when my existent level of wealth was zero, when I was had no assets or money to spare or could even afford to lose it, I have always risked it all when given the option. This indifference attitude has allowed me to keep on going and have a high tolerance of losses.

I’m not the only one, It’s like people playing lottery, gambling at a casino, making a bet on a horse race or trading crypto currencies.

I’m a Risk Lover

I want to maximise my profit, it involves the change of loosing my investment but as I’m seeking a high return. Some would consider me to be reckless but guaranteed payouts but when ranking my preferences I always prefer the outcome where I get a higher reward/ return, even if it means I have to risk more than I would be prepared to...

Thinking of things like this is very important, I have never attended economics or business school where they call this “Expected Utility Theory”, however by analysing my own behaviour and paying close attention to how I got this far I have been

Like Warren Buffet said “If only I learned earlier”, had I known about the importance of being risk neutral a long time ago I would have taken even more and bigger risks and been ahead of the pack with more enhanced returns, more excelling profits, in a more desirable position and in a remarkable state of affairs.

There’s all kinds of businesses out there that I don’t understand, but Holiday Lets I do and the more I understand about investing the better of a business person I become.

I think curiosity is also a huge factor, I find it amazingly intriguing to keep learning about my own behaviour and what’s going on in my mind in terms of staying position, keeping my faith and how to move forward even when I took a chance, risked it all and lost everything I had.

I am a curious person by nature, this helped me with staying humble enough to keep learning every day about the economics of Hospitality and Property Investments.

- take the example of Bill Gates who read 50 books per year and appreciates knowledge on a level most people don’t.

For example I have now made the executive decision that I no longer do meetings with couple investors, I believe they are definitely risk averse - specially when they have children so the chances of getting involved in business with someone like to who is completely apathetic to it are next to none.

When being presented the Dilemma of taking a risk or not I will most definitely take it - after doing all my Due Diligence and analysing if it’s worth it for me or not obviously- but lets not forget everybody’s definition of at what point is worth it or not is different.

Chris Gardner whose life story was shown to the world through the movie “The pursuit of happiness” with Will Smith is an example of a risk lover like myself: In business, knock backs and obstacles are inevitable but it’s how we overcome them and don’t stop until you achieve your goals.

Don’t fear failure - just keep going

Had I not been ready to invest all I have got I wouldn’t have been able to grow my business so fast, therefore I’m ready to face the fear of failure, I have mastered to overcome that and developed a mind set that allows me to make dramatic passionate decisions and just go for it head first. Which is why being ballsy has served me very well so far.

In my case I haven’t got issues dealing with shortage, with the fact that there are times when I have a lot of funds and times when I have none. Many times I have referred to this as I also think that being an immigrant has worked in my favour due to this, I have started from nothing before so doing it again isn’t alarming to me. Whereas typically speaking it would be nerve-wrecking to do what me and Elon Musk do in business: reinvest all the profits we make into the business all over again. My best friend made fun of me in the past due to this asking “How can you are always broke?” in an attempt to criticise me, then I explained that recycling cash has been the biggest trick up my sleeve and has enabled me to get where I am so far. I’m not expecting everybody to agree or even understand why would I do that but the remunerative rewards in the long run are substantial and he ended up agreeing with me...

“There can be glory in failure and despair in success.”

― Abraham Lincoln

My racial approach to failure allows me to aim high, risk high and earn high.

But unless you have the intellectual capability to be audacious in your ventures, apprehension will stop you from stretching yourself, maturing, flourishing and thriving.

You need to think for yourself if the implications of the changes in your wealth will be destructive to you and you prefer a conservation approach or not...

The ramifications of the impact the risk of losing your investment are also directly correlated with your sentiment towards money, how emotionally attached are you to your funds and assets.

The basic questions to consider are:

Can you afford to risk the amount of money you are investing?

If you can’t afford to, given your circumstances and mindset are you ready to keep trying until you succeed at it, or come to a point when you realise it won’t be possible to make it happen, to but you will not lose the enthusiasm of making investments in the future and be demotivated?

The question you need to ask yourself is if you prefer to have a high return with a high risk or a low return with little risk