What can make a person miss family events, dinner dates or catch-ups with friends? Probably a lot of things, but in many cases work tend to be the reason. It is not uncommon that people misses or cancels things because something urgent came up at work. The question is if all these cancellations are a result of people loving their job so much that they prioritize it over family and friends, if it is people that are too dutiful to say no or if it is a result of an addiction to something as simple as earning a lot of money?
To save up or borrow? This question is essential when talking about how your net worth will develop the coming years.
We both believe in saving up to buy the things we want rather than borrowing. And why so? Our main reason is the total cost. Things get way more expensive when you choose to borrow the money AND your future disposable income will be lower (not forever – we know). This starts an evil circle towards borrowing more money, because it then takes even longer to save up again. Therefore we find it more attractive to save up for the things we want in advance, even though we sometimes have to wait longer to get it.
“You can only get high returns on your investments if you are also taking a higher risk” Is that true? Or are there potential loopholes?
It seems more and more people are getting introduced to the efficient markets hypothesis in some form or another. There is as such a common understanding that you can only obtain higher returns by taking more risk.
As educated in finance we have been taught about efficient markets as well – and actually almost believe it. If there was an investment that was better than other investments the money would flow to it and wash away the extraordinary returns in a splitsecond right? But do we actually live in a world where the Eye of Sauron watches all financial options? Wether you we believe it or not we will use this post and its follow ups to challenge this view.
This title refers to the saying “If something is too good to be true, it IS to good to be true”.
Maybe you mother og best friend will do amazing things for you, but firms will certainly not – unless they are paid to do so. So the saying “there is no free lunch” highlights that you should always think twice if someone offers you super high returns for no risk or products to super favorable prices.
If you have studied finance (we both have!) you will have heard the saying a million times, but it is probably because it is true in 99% of the cases. And to be fair, it actually helps you evaluate a financial product, as if the product is too cheap or have a too high return, there must be a catch.