If you start a business, you could lose all of your capital.
If you gamble on sports, you can lose your entire bet.
Even picking stocks includes the risk of losing it all.
All of those COULD have huge upside, but a potential downside is losing it all.
I define those as binary investment decisions.
A lot of people have the mistaken perspective that investing is also binary. It’s not.
It’s more like buying a house. Nobody doesn’t buy a house because they’re afraid of “losing it all.”
The worst case scenario selling a home is getting back less than you paid, but it’s not $0.
A boring diversified index portfolio is the same as buying a house.
You won’t hit any home runs, but you also won’t strike out.
