What Happens Next in 6 Minutes cover image

Building the Perfect Stock Portfolio

What Happens Next in 6 Minutes

CHAPTER

How Much Money Should You Spend?

In economics, utility is a measure of the happiness or satisfaction that we get from spending our wealth. The decision that maximizes your expected utility can be very different compared to the choice that maximized your expected wealth. For people with typical levels of risk aversion, what maximizes yourexpected utility is betting something like 10% of your wealth on each flip.

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