Earning potential vs Wealth potential
29 September 2020
Why do some of the highest earners finish their careers with little to show for it…?
One hypothesis is that the skills required to generate high incomes differ from those that help to retain wealth.
Making huge gains one year, followed by huge losses the next is all too common in many industries. Our character and personality traits have a substantial impact on how we manage our finances and the choices we make, especially when it comes to our attitudes to risk.
Getting caught in the weeds by adopting a too risky or overly cautious investment strategy can lead to unsustainable losses. Complicating your investments by arranging your wealth structure in a non-linear way can also lead to significant losses. To avoid these pitfalls, people need to change their perspective on how they look at their personal finances.