risk tolerance in life

The term "risk tolerance" often appears in all kinds of investment books. As the saying goes, "if you don't enter the tiger's den, you won't find a tiger's son", and "risk and profit coexist" are related to it. There is no such thing as a stable profit and no loss in investment. No matter how stable the target is, it may be changed by factors such as policies, wars, natural disasters, and technological development.

Confirming how much risk you can bear is a necessary preparation before investing. Otherwise, if you choose an unsuitable target, you will either think that the reward is not enough or you will not be able to sleep well.

Try to illustrate by using the example of drying clothes.

Today is Sunday. I washed my clothes early in the morning and took them outside to bask in the sun. At the same time, I did not forget to pay attention to the clouds in the sky.

"The weather forecast said it might be raining," A said while looking at the phone, "Should we be ready?"
"It doesn't matter, the temperature is still so high, it won't rain for a while," B objected.

A's risk tolerance is relatively low, and it may be harvested too early, failing to fully utilize the sunlight;
B's risk tolerance is relatively high, he will use the sun for a longer time, but it may also be left too long and the clothes will get wet from the rain.

It is impossible to judge which person is doing the right thing at the moment, after all, whether it will rain or not will know.
There is no good or bad level of risk tolerance, which varies according to each person's experience and values.

Extending to the extreme situation, people with a risk tolerance of 0 will always hang their clothes indoors, ignoring those who are outdoors at all; on the contrary, the person with the greatest risk tolerance is to hang their clothes outdoors until they are dried or exposed to the sun. I only collect it after going down the mountain, and even hit people who have held the idea of "washing again" from the very beginning.

The above is based on the discussion of "whether to take out the laundry today". In fact, there are also issues such as deciding whether to dry it or not and when to dry it according to the weather forecast in advance. However, it will become too complicated to discuss, so it is limited to the day. .