Some things seem risk-free, but in reality, they are like boiling frogs in warm water—extremely high risk:
For example, just holding cash in a bank while the printing press runs hot can dilute your purchasing power significantly over a few years;
Another example is following a routine job, receiving a stable paycheck month after month. You won’t starve, but you also won’t thrive. You don’t have to worry about risks yourself, but you become systematized and like a cog in a machine. When the times change and better alternatives emerge, your cash flow in life can drop to zero, leaving no way out;
Now everyone is saying the stock market is good, thinking they can jump in, but in reality, there isn’t much left for you to eat; instead, you need to be cautious about the risks.
Some things appear risky, but in fact, the risk is not that great:
For instance, when the market is in distress and values are undervalued, allocating some equity in good companies means the so-called risk is just the risk of price fluctuations. However, the companies are making money, and their intrinsic value is continuously rising. Looking at it long-term, the chances of winning are high; during the market distress in 2023, many good companies were cheap enough to earn back their market value in just a few years. How could you possibly lose? After buying, you can just lie back and watch the numbers in your account rise.
Another example is mastering a skill to earn a living, building a business that you control, or establishing your own IP. It may require effort and can potentially lead to losses, but if done well, your fate and life will largely be in your own hands;
The risk actually lies in the nature of things themselves, but for most people, the risk is how they perceive and define risk in their minds. The difference between these two perspectives is where rational and calm individuals find opportunities for profit and arbitrage.
