Tuesday, February 8, 2011

Addicted to Risk?

Taken from Naomi Klien's TED talk with comments from Arianna Capital.

"We have become far to willing to gamble with things that are precious and irresponsible... and to do so without a backup plan." "Our societies have become addicted to extreme risk in finding new energy, new financial instruments and more ... and too often, we're left to clean up a mess afterward."

Naomi Klien frames risk in terms that most people can actually relate to. Her discussion saves us from getting into an extremely statistical, black-swan event narrative that technically explains how we are addicted to risk.

She explains that the main ingredients to this addiction seem to be greed, hubris, but most importantly a story that we tell ourselves and have been conditioned to believe. Greed and hubris are cited most frequently, and we can clearly see how they are at play. But, the way she explains this story element is most profound.

Klien claims that we are hooked in a loop that there will always be more or we will be saved at the last minute like in most Hollywood movies. This is a conditioned story from media, family, and society as a whole, and it seems to work against real behavioral change.

Now, what is the link here to finance - after all, this is a blog about Wealth Management practices and getting you to your goals. What is your story? Why do you trust your Financial Planner? Why do you believe investing should be done the way it should be done? Is it because the person that refereed you is smart and you trust them? Is it because fate brought you the right person at the right time?

We believe that most people do not really know why they have the manager that they have. It is also starting to become prevalent that many do not even know their real cumulative return, the fees they pay their adviser, or the types of risks that they are even exposed to. If you were going to be exposed to polio in the next few minutes wouldn't you want to know so you could do something about it? It is time to take a long hard look at this so that we can stop gambling on the precious lives that we support through our own livelihood. It is time to expose the story that you have been living regarding investing so that if it is too much of a risk a new solution can get you and your family to your goals.

To get started in the right direction, read a few areas of our blog that can help make a change:
This is but a handful of the wealth of information on this blog that relates to finding the right solution for yourself. Also, please contact us if you would like a free book that elaborates on what you need to make a Wealth Management Plan that accomplishes your goals.

Enjoy Klien's presentation below!

-Arianna Capital Management

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