The Nature of Risk

Nobody invest with a view to risk. Everybody invest in the belief that they will make money for sure. If they are not sure, they would not have invested.

But there are risks in investments. And people do lose money in investments.

So what happens?

People believe that prices rise and fall for all assets over time. Even those who are absolutely convinced that property values will keep rising in city centres because the population keeps rising and there is limited space in city centres.

But city centres do shift. There are many inner city decays and inner city slums and poverty.

People keep building new assets, designs keep improving as well as the way of life.

Nothing is static. Things in life keeps changing.

It is not true that if you just sit on your assets and do nothing, the prices of your assets will keep rising.

There is this fantasy that one can just accumulate more and more assets and become richer and richer.

All that happens in the end is that there will be companies that grow and grow with assets, and there are people running the companies and they are not owners of the companies. There are these non-human legal entities that just keep accumulating, apparently under the same name, but inside the companies, the corporate ownerships have changed many times, and the founders and their descendants have long sold off their grandfathers' assets and blown off their wealth.

It is true that as the world gets older and more and more people are building more and more assets, more and more assets will come into existence and they will all crowd around certain areas for critical mass. These assets will be owned by people and companies of all shapes and sizes. Or they could all be left in ruins, like all ancient cities and civilisations.

The real question is where do we as individuals come into the picture?

Do we want to become like individuals who spend all their lives accumulating gold and carrying sacks of gold on their backs?

Or are we masters of ourselves and living this world and, at the same, making sure that we have just sufficient means to be able to enjoy this short life that we have. No more, no less. If not, only slightly more but no less.

In which case, we should be spending our younger days working hard and saving, so that we have the means to enjoy our lives when we are not physically or mentally capable of exerting ourselves in the struggles of living.

The risk of accumulating assets is that we have forgotten the primary purpose of accumulating them and have forgotten to live and enjoy our lives.

Some would ask with vastly accumulated assets, we can have all the riches to live our lives the way we want. It is very hard to be rich and humble. It is also very hard to be rich and know the value of living. When very rich, we also know our cleverness and become arrogant and try to reshape the world around us to our own whims and fancies.

It is very easy to fall into the trap and think that what we believe is reality.

The truth is that we are all nothing and we will all die and there is nothing about us to be arrogant about.

We should be spending our remaining days enjoying the quietness and solitude of time spent with ourselves and loved ones, saying all the things we want to be able to say to each other face to face one simple word at a time.

All the assets are like the roof over our heads and rooms to keep us safe and warm. We can use money to buy things and comfort, but we can only discover for ourselves the true happiness of quiet contentment, that we alone are quite sufficient for us alone.

Asset values rise and fall with the madness of people as they react in fear to the uncertainty of the future which is always uncertain and hence always at risk.