Has anyone else notice “invest only what you can afford to lose” is 100% overlooked everywhere else other than crypto and stock market

Note I’m not saying you should invest more or less. You’re an adult, and you can figure out your own needs and situation. But a saying we hear all the time is

Invest what you can afford to lose.


While on the face of it, it sounds logical. Don’t go into debt, don’t use any money that can set you back, and so on. And obviously people in general don’t follow it since they already are on the edge and they just want to be financially stable or better.

But the reality of it is this saying is never said in just about anything else in life. For example

* You invest in yourself for a more hopeful future with college. But yet in the USA student debt crises is heavily talked about and it gets worse every year. Studies show 34% of all college graduates work a job that doesn’t require a degree, and 11% work a job that pays $25k or less a year.
* You most likely have to invest what you can’t afford to lose in making a startup. 90% of startups fail, 75% VC backed ones fail, 20% close in the first 2 years, 50% can’t make it to 5 years, 33% make it to 10 years, and 40% actually make any profit. Out of that 30% of them break even, and if your in Europe some of these numbers are better vs if you are in the USA (like EU it is 10% better).
* Having kids is an investment (and this btw is more likely a major reason why we are seeing the birth rate dropping off a cliff. People like me can’t afford kids, we know what being in a financially unstable house is like, and we don’t want to have kids until we become financially stable. Which never happens, so we never have them.)



I can go on, but my point is

# People all the time invest more than what they can afford because they have to



Basically, we aren’t living in the 1950 where you can live off the wage of a worker of a burger flipper at Mc D. Where you can use a summer job to pay for your college, a car, or spend a few years to pay for a house/land.

Thanks due to the demand of society, medical cost going sky high (like a simple check in at a hospital with nothing else done could cost you nearly $1k), and so on. People are having to do far more with far less. So while the advice invest only what you can afford to lose in general is good advice and most likely will always be good advice. **At a given point it is like telling someone working 3 jobs to budget better or just be rich.**

It is basically detached from what reality is increasingly becoming thanks due to bad political and economic practices from many governments of the world. And maybe something like tax free UBI being a normal thing might make it relevant.

**But unless if someone is going to the extreme like taking a loan out on their house to invest in crypto. IMO the advice at best is virtue signaling**

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18 thoughts on “Has anyone else notice “invest only what you can afford to lose” is 100% overlooked everywhere else other than crypto and stock market”

  1. You definitely should be investing more than you can afford to lose in stocks but just in index funds like spy or similar. You simply will not lose all your money this way and will almost certainly see it grow nicely over time. Now you shouldn’t invest more than you have to spare (still need some cash etc).

    Crypto on the other hand should be regarded as something that can easily go to 0.

  2. Buy an education you can’t afford, a car you don’t need and a career that puts your health on the back-burner. Make it your life’s goal to own a home without EVER considering if it makes sense financially or stylistically.

    But don’t EVER takes chances (shittiest advice ever).

    Take care of your health, people. That way, if you lose everything, at least you still have your health. Run, do pushups and situps, get a tan, eat right most of the time….. Being a healthy old person is the true goal.

  3. The reason 34% of college grads work a job that doesn’t require a degree is because creditors will give student loans to anyone for any reason. Look, education has intrinsic value. But a master’s degree in gender studies doesn’t have a lot of PRACTICAL value. The reason we’ve got people out here with six-figure student debt working for $17/hr is because they thought it was a sound investment to spend $200,000 on a medieval Celtic literature degree and someone GAVE IT to them. That’s literally NOT an investment. So we HAVE to start noting the differences in approach when we talk about college debt. How many engineering graduates are working jobs that don’t require a degree? How many nursing graduates are working jobs that don’t require a degree? It will be substantially lower than the aggregate.

    Sorry, that was my rant on student debt. There’s a problem, I’m not denying that. But most people do not want you to dive into the nuance of that problem. Don’t even get me started on going to MIT on loans vs just going to state school on scholarship.

    But anyway, the reason we talk about not investing more than you can lose when it comes to actual investing, is because investing more than you can afford to lose has no significant upside relative to the added downside. It has an upside—in terms of gaining more than you might gain if you only risked what you could afford to lose. But the downside is too much worse than the relative upside—losing more than you can afford is not a risk worth taking when it comes to this type of investing, at least not to me. It’s not the same kind of investing as buying countertops to put equity into your house.

    Background: I went to a state school on scholarships, finished with a 4.0 and am debt free save for car and mortgage. The degree has already netted *realized* returns at age 27 relative to my non-graduate counterparts. I got a stat-intensive BS in sociology and went into healthcare data analytics. Im not a doctor or anything.

  4. This wouldn’t win a 6th grade speech and debate contest.

    Kids aren’t looked at as an investment by most people. Many / most kids are a byproduct of animalistic urges to fuck. There are also massive **emotional** elements involved with kids, so to try to make it logical is dumb.

    Oak trees are also a shitty investment, because you won’t live long enough to get the benefits. We have oak trees.

  5. >Having kids is an investment

    Most people don’t see it that way. Having kids is a biological urge that people fulfil because they want to or feel pressured to do so. My family wants me to get married and have kids so badly but I’m not doing that any time soon. Too damn expensive.

  6. Hardly anyone is really ever financially ready to have kids. Have them or not. I’m glad I don’t, for numerous reasons. To each their own

  7. The bigger issue is lack of appropriate wages and public programs/services. Maybe people wouldn’t have to invest in risky assets if they could actually afford to eat

  8. Regarding the stock market, that depends on where you are getting your advice. If you’re spending a lot of time on WSB, then that is actually good advice, because that’s not really investing in the stock market, that’s gambling.

  9. Have kids if you wanna have kids! Seeing their parents struggle could make them suffer, but being handed everything without struggle could make them weak.

  10. It’s all about risk-management.

    Education is usally a low risk investment. Especially if you don’t have to pay for it or receive an interestless state-loan. Somehow, the USA didn’t figure out yet, that investing into an educated population helps the economy.

    A startup has a huge risk of failure, if you do *not* invest. Go big or go home. The biggest risk for a startup is not making it to the market before competitors.

    Kids are *not* an investment at all. Having kids is a self-realization. We’re not in the 18th century anymore, when kids were your life insurance. Please, if you have kids, invest in their future not in yours. If you put a life onto this earth, you take responsibility for their well-being.

    Crypto is a high risk investment, that is impossible to predict without insider knowledge. You never know, when the next bull market will hit or if there ever will be a next one. Meanwhile, day-trading is a zero-sum game. It’s a plain necessity to account for the possibility of losing your money.

    Even ETH and BTC aren’t safe. Yes, BTC might keep rising. But lot’s of people are just waiting for the flippening, which might make BTC plummet. On the other hand, BTC might get their layer 2 networks going, making ETH superfluous. Maybe a completely different chain makes both useless by finding a “killer app”.

    Course changes from the past don’t apply to the future. You don’t know, what will happen.

    Meanwhile, you have *lots* of possibilities to reduce risk with your investment strategy. Retirement funds, ETFs, taking a loan to buy property, …. There is no real time pressure like with startups. There are tons of stable, low-risk investment options, if you want to circumvent inflation.

    But for crypto: Don’t invest more than you can afford to lose.


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