Just because Howie Mandel plays risk-taker provocateur on TV doesn't mean that he's a risk-taker himself.
The host of Deal or No Deal is risk-averse. He would rather have a bird in the hand than risk it for the two in the bush. He talks about the risks and the nature of the show in the article, but this former carpet salesman has some very sound investing advice. His tips are in bold, followed by my comments.
- Think worst-case. There is nobility in being risk-averse. Prudent risk is a good thing, but prudence indicates that you've thought of the worst case and haven't invested more than you can afford to lose.
- Have a plan. Stick to it. Don't let emotions change your plan. This goes with businesses, stocks, and many other things. Cut your losses. If it didn't work out, get rid of it, learn, and try again.
- Be satisfied with good fortune, not what you “coulda, woulda, shoulda” had. I'm guilty of this one from time to time. There are all sorts of things you can do now to improve your situation, but absolutely nothing that you can do yesterday. If you spend too much time kicking yourself for what you did yesterday, you might not get around to doing it even tomorrow, or the next day.
Tonight on Deal or No Deal a guy walked away with $675,000. This was either the fifth or sixth offer. I was glad he finally took the deal. $675,000 is a lot of money for just about anybody.
I was glad he took the deal, even though he had the $3,000,000 suitcase next to him. He just as easily could have had the $1 suitcase. When someone puts $675,000 in your hand, it's really, really prudent to close your hand!
I think most people are guilty of the 'coulda, woulda, shoulda' at some point or another but it's a completely different thing being driven insane by it. If all you worry about is what might or might not have happened then you'll be wracked with regret and that's not a good mindset to be in if you're planning investments.
I was actually yelling "don't be an idiot" at the TV. I'm so glad he took the case. As you said, he could have had the dollar case just as easily.
DonD is going to give game theorists data to work with for YEARS.
Emotions. Ya. If I could just get all the emotions out of everything related to money (budgets, finance, new purchases, etc.) I'd have it made. Unfortunately, everyone I know seems to have the same problem.
Yep. A plan helps, but sometimes life just gets in the way. You should be able to plan for most things.
Howie is definitely risk averse. I think that's why he is so phobic about touching other people or shaking hands etc. I guess it makes sense that it would transfer to his financial life too.
Oh, and I'm pretty risk averse too…… 🙂
Hazzard