Torcana Podcast 35: How to Overcome Big Risks & Fears When Investing
08/14/19 • 11 min
Torcana Podcast 35: How to Overcome Big Risks & Fears When Investing
Host Colin Murphy is back in the podcast booth after a summer hiatus to talk about the fascinating topic of risk and how important it is to accept it and to have a healthy appetite and respect for it.
The risk or more accurately the fear of risk is the reason a lot of people don't invest in real estate or stop investing at the first sign of trouble. We often trip over ourselves when it comes to investing because of the way we subconsciously think about losses and gains. Our brains are hardwired by millions of years of evolution to be more afraid of losing than afraid of missing out on a gain.
It is an instinct that helped our ancestors protect today's food rather than risk it for more food tomorrow. When people were hunter-gatherers who lived on the edge of survival every single day, that was a very helpful instinct to have and for the majority of our existence as a species, it served us well and didn't disappear just because we had agricultural and industrial revolutions.
Getting back to the 21st Century, the technical term for how we subconsciously place far more importance on avoiding losses than accumulating gains is called loss aversion and it affects a huge range of decisions we make all through our whole lives.
Example 1: Many people either hoard too much of their wealth or invest it in ultra low-risk products that generate little interest or protection against inflation.
Example 2: People to avoid selling a stock that is falling because they cannot accept the reality of a loss and paradoxically, the same fear causes people to sell a stock too quickly after it rises just to lock in some profits.
Using theses and other incredible real-life examples, including how casinos & big corporations exploit our fear of losing to their own advantage, Colin discusses how to move beyond these ancient instincts when making both small and big decisions.
Recommended Books
"Thinking, Fast and Slow" by Daniel Kahneman
Torcana Podcast 35: How to Overcome Big Risks & Fears When Investing
Host Colin Murphy is back in the podcast booth after a summer hiatus to talk about the fascinating topic of risk and how important it is to accept it and to have a healthy appetite and respect for it.
The risk or more accurately the fear of risk is the reason a lot of people don't invest in real estate or stop investing at the first sign of trouble. We often trip over ourselves when it comes to investing because of the way we subconsciously think about losses and gains. Our brains are hardwired by millions of years of evolution to be more afraid of losing than afraid of missing out on a gain.
It is an instinct that helped our ancestors protect today's food rather than risk it for more food tomorrow. When people were hunter-gatherers who lived on the edge of survival every single day, that was a very helpful instinct to have and for the majority of our existence as a species, it served us well and didn't disappear just because we had agricultural and industrial revolutions.
Getting back to the 21st Century, the technical term for how we subconsciously place far more importance on avoiding losses than accumulating gains is called loss aversion and it affects a huge range of decisions we make all through our whole lives.
Example 1: Many people either hoard too much of their wealth or invest it in ultra low-risk products that generate little interest or protection against inflation.
Example 2: People to avoid selling a stock that is falling because they cannot accept the reality of a loss and paradoxically, the same fear causes people to sell a stock too quickly after it rises just to lock in some profits.
Using theses and other incredible real-life examples, including how casinos & big corporations exploit our fear of losing to their own advantage, Colin discusses how to move beyond these ancient instincts when making both small and big decisions.
Recommended Books
"Thinking, Fast and Slow" by Daniel Kahneman
Previous Episode
Torcana Podcast 34: Interview with Jared Garfield
Hi everybody and welcome to Torcana Podcast 34! Those who have been waiting patiently for a new guest since Kathy Fettkes great podcast in Episode 31 will be delighted to hear that I have.
Jared Garfield is today's guest and he is one of the top real estate investors and educators in the country. Jared and his teams have closed, renovated and managed over 3,000 properties in 5 states. He also runs a successful real estate coaching platform and has trained more than 1000 clients as they build real estate portfolios.
In a wide-ranging interview, Jared and I covered a wide variety of topics including:
How Jared got hooked on real estate when his grandfather allowed him to fly around Utah in a small plane looking at real estate opportunities - The painful lessons he saw his grandfather learn about market cycles and how he applies them to his own successful business today - We examine the differences between overpriced and underpriced markets - We look at what types of properties baby boomers and millennials will be buying & renting in the coming years and how you can profit from them. - And much more!
Further Links
Free report: jaredgarfield.com/report Jareds Podcast: http://roiwealthwatch.libsyn.com/ Jareds Website: http://roiturnkeyproperties.com/
Contact Torcana Show Host Colin Murphy
[email protected] www.torcana.com
Next Episode
Torcana Podcast 36: Interview with my Business Partner David Shaw, Tampa Real Estate and Renovation Expert
Torcana Podcast 36: Interview with my Business Partner David Shaw, Tampa Real Estate and Renovation Expert
In today's special podcast Colin Murphy invites his long term business partner David Shaw to chat about his career, how he became involved in real estate and his views on what it takes to become a successful investor.
A wide range of topics were covered in this show which included:
How Colin and David originally met each other in Ireland - How they started a new business at the start of the downturn in 2008 - The challenges they overcame when reinventing the business again in 2014 - How to scale a property flipping business - The importance of feedback from the ground - How to avoid getting screwed by contractors - How to handle the (inevitable) stress and mistakes in the real estate business - The key habits of successful investors - And much more!
Further Information www.torcana.com [email protected] [email protected]
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