No Comments

Risk versus Reward in Real Estate Investments

Before I started my first career, as a derivatives bond trader, my trading company had drilled something into my head…every time I made a trade, I was taught to analyze: “What is the risk; what is the reward?” Meaning, what is the maximum amount I could lose, versus the maximum possible upside I could make?

This simple formula, “risk versus reward”, can be applied to almost anything in our lives: for example, the risk of drunk driving is death; the reward is you save an Uber fare, so maybe you should take that Uber. How about the risk and reward of staying in a bad relationship? The risk is that you’ll miss the opportunity to meet your soulmate. The reward is nothing, because after all, it’s already a bad relationship. So maybe you should get out, ASAP!

Read more