Scared Money Don’t Make Money: How is Risk Correlated with Wealth? — ArenaCFx

Who are The “Scared Money” People?

For example, “scared money” people are less likely to become successful entrepreneurs, CEOs, business owners, athletes, and leaders. This is because taking risks that others are not willing to take will lead you to places and positions that others are not able to reach. Hence, the saying: “the greater the risk, the greater the reward.”

Scared Money Investing Strategies

On September 22nd, Gary Gensler, chairman of the US Securities and Exchange Commission (SEC) released a 1:30 long video about investing on his Twitter, which is a part of an educational video series on investing called “Office Hours with Gary.” However, the video’s content and Gensler’s investment recommendations caused a massive stir online. The audience he was speaking to were college students. He said:


In summary, scared money investing strategies will generally leave you worse off than before. This is because these investing strategies barely outperform yearly inflation increases. Moreover, the opportunity costs involved are enormous. For example, if you were to adopt a more risk-tolerant approach and mindset, by investing $5 in cryptocurrencies like BTC, ETH, and SOL, the student investor will have achieved much greater returns (than by idly saving). Therefore, it’s best to adopt an investment philosophy in your early career that is risk-tolerant and not completely opposed to risk-taking.



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Arena Crypto and Forex

Arena Crypto and Forex

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