And just to play devil’s advocate, compound interest/investment returns and inflation have been our bywords up until the 21st century. Are we sure those models will continue?

That’s it. I have told Bubelah before that I’m a freak: I have no real need to do anything other than play with the kids, maybe tinker with the blog, and keep up with basic household chores. I have minimal (or no) desire for professional achievement.

I worry, of course, from time to time that this is a mental defect… but I’ve concluded that basically I’d either make a great teacher or a great househusband who writes as a hobby, not a profession. Go figure.

I seek, well, financial adequacy, I guess. I look forward to a time, in the not-to-distant future, where I can move to Paradise (well, okay, Hawaii), not worry about keeping up a six-figure income, but still work at something completely different than I’m doing today.

So what’s your end game here?

You mentioned that Warren Buffett says he takes no risks, but at the same time your grandfather was making loads of money up until 2000… so that really goes to show that Buffett in fact was not taking any risks and that your grandfather did. Don’t feel bad, however, as I think the majority of people in the stock market took a hit around that time. I would argue that your grandfather (if he had the time) could’ve also dug up all the same research which Buffett had.

One last thing; in your example about the job offerings, I feel that taking the $50,000 job is actually the ONLY choice! The other job does not seem a “risk” as you’re trying to define it – it’s something like MLM… lure you in in hopes of the BIG PAYOFF. Or like the lottery, “The more you play, the more you are sure to lose.” (Adam Smith). Basically, money today is worth more than money tomorrow for two reasons; inflation and the power of compound interest (or investment returns).

Shawn

Obviously I’ve played it the safe way – high level of education, conservative investing, etc. I still think it’s worth considering this: should I dump 50% of my net worth, for example, into starting a business or investing heavily in something semi-risky? I might set my family WAY back, but then again I might wrap up the financial freedom 9 years ahead of plan.

It’s an impossible question to answer without more information, but at the same time it strikes at the core – how much risk to take on. I wish I knew the answer.

Oh, and I just wanted to throw in my two cents on indexing: It is average by its very nature. The whole concept is to cast the widest net possible in order to mitigate loss and capture the market’s average return.