Your rules of thumb at the end appear very pragmatic in that they’re easy to follow, and I use a similar system for myself. Do you happen to have a rule of thumb for how much return you require for a specific risk?
“happiness depends on the log of income”
I subscribe to the idea that increased wealth has approximately logarithmic utility. This is very tangential to the topic of your post but… I’d be curious to hear your thoughts about a corollary stemming from this that one should be willing to take increased risks with additional capital due to its logarithmic utility? What is your take on that, should an individual with assets / income beyond their needs be willing to take increased risk?
Your rules of thumb at the end appear very pragmatic in that they’re easy to follow, and I use a similar system for myself. Do you happen to have a rule of thumb for how much return you require for a specific risk?
I subscribe to the idea that increased wealth has approximately logarithmic utility. This is very tangential to the topic of your post but… I’d be curious to hear your thoughts about a corollary stemming from this that one should be willing to take increased risks with additional capital due to its logarithmic utility? What is your take on that, should an individual with assets / income beyond their needs be willing to take increased risk?