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How To Get Better At Risk Taking

Money For the Rest of Us

CHAPTER

How Much of a Buffer Do We Have?

Most investment experts would not be predicting something as specific as china invading tiwan, leading to an 80 % drop in the stock market. But there's a difference between risk capacity and risk aversion. Our lost capacity really comes down to how likely will we be ruined if something catastrophic happens? How much of a buffer do we have? I have a friend that i've gotten to know over the last few years who has had just a really, really rough time - her husband passed away. She's in her sixties. Her son was ill, her adult son, who helpes support her. If we have high income and we're saving lot, our our ability to withstand losses is greater

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