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Risk Is What You Don't See

When risks turn into disasters

What turn events into disasters is that few discussed them even moments before they occurred. They were surprises. People affected did not prepare, either mentally or with actions. They could only react, often surrounded by panic.

Two things happen with surprises:

  • You become vulnerable.
  • Surprises shake the beliefs that leave you paranoid and pessimistic.

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IDEA EXTRACTED FROM:

Risk Is What You Don't See

Risk Is What You Don't See

https://www.collaborativefund.com/blog/risk-is-what-you-dont-see/

collaborativefund.com

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Key Ideas

Risk and preparation

Risk is more than something bad happening. How risky something is, depends on whether you're prepared for it. A small thing out of the blue can be deadly.

We should also remember this when thinking about the economy and our investments.

The biggest economic risk

The biggest economic risk is what no one’s talking about. If no one is talking about it, no one will be prepared, and the damage will be amplified when it arrives.

In recent years, people cited the trade wars and election as risks. It is the same risks, repeated over and over. People may be worried, but no one is surprised. A business may be concerned, but many have prepared. Compare that to what, in hindsight, have actually been the biggest risks.

When risks turn into disasters

What turn events into disasters is that few discussed them even moments before they occurred. They were surprises. People affected did not prepare, either mentally or with actions. They could only react, often surrounded by panic.

Two things happen with surprises:

  • You become vulnerable.
  • Surprises shake the beliefs that leave you paranoid and pessimistic.

A better direction

  • Expect that risk will arrive when you don't expect it. Don't rely exclusively on forecasts – almost all of which are either nonsense or about things that are well known.
  • Give yourself a wide berth. If you think recessions will reduce your wealth by 20%, design your allocation to withstand a decline of 40% or more taking into account that the powerful downturn will be the one you didn't expect.

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SIMILAR ARTICLES & IDEAS:

"Rich Dad, Poor Dad" is Fiction

John T. Reed, a real estate investor, looked into the accuracy of Kiyosaki's best-selling book and found it inaccurate:

  • The Rich Dad is most likely an invention. ...
"Rich Dad, Poor Dad" contains dangerous advice

According to John T. Reed the famous book is filled with bad advice:

Dangerous advice

  • "If you're gonna go broke, go broke big"
  • Convinces people that college is for suckers

Law-breaking advice

  • Advocates committing a felony: have rich friends for trading stock based on non-public inside information, he says "That's what friends are for."
  • Recommends tax fraud by deducting vacations and health club dues
  • Brags about using a partner weasel clause in which his cat is his partner
Kiyosaki is making money from a personality cult

Many critics pointed out that Kiyosaki is selling a cult, not financial advice.

He is accused of tapping into the fantasies of the masses & being short on specifics, both attributes of religious cults.

Bruce Lee as a philosopher

He studied poetry and philosophy in school. He focused his studies on Asian and Western philosophy, incorporating elements of Jiddu, Buddhism, Taoism, and Krishnamurti. 

This helped h...

Bruce Lee's impressive life
  • He wasn't a master of any standard form of martial arts. He was closest in mastering Wing Chun.
  • He invented his own style of martial arts. He based his style on the teaching of Man and what he learned of Wing Chun. He called his style Jeet Kune Do "the style of no style"
  • He starred in 20 films in Hong Kong before the age of 18.
  • He popularized the "1 Inch Punch" as seen in Kill Bill Vol. 2
  • He was a prolific poet and philosopher. He studied poetry and philosophy in school and was even published several times.
  • He was so fast, his moves were often too fast for a camera to catch.
  • He only made 5 feature films in the US, his last released posthumously.
Paper Money

The instruments of trade and finance, like paper money, are groundbreaking inventions, put to use by collective acceptance using authority and seals of trust.

Money's Worth

The financial crisis of 2008 showed that the system can buckle anytime and money may not always be worth the same.

As we get hyper-connected, the state-backed authority of currency, and what Money is really worth, is being rethought. Society has historically tried to invent new forms of currency, most recent being Bitcoin, a cryptocurrency.

The Idea of Libra Currency

The idea of Facebook's Libra, an attempt to create a new currency made from the architecture that powers Bitcoin, is that the value of new money is not derived from state authority, but a combination of mathematics, global connectivity, and trust that resides in people using Facebook.

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