How much could you afford to lose on one investment?

[Aceyducey]

This is a follow-on to the thread:
Why dont we do it ? Why do we discount the loss of not taking action.
(http://www.somersoft.com/forums/showthread.php?s=&threadid=13668)

Considering risk-adversity, RIGHT NOW in your life, how much would you be willing to lose in a single (speculative) investment.

A speculative investment is one where there is a possibility of a very good return (maybe several hundred %) and a possibility that you never see your money again.

This is NOT like a standard property deal where the house & land are almost always worth something, and at worst you can hang onto the asset until it does appreciate.

Please don't say 'it depends on the risk of losing all my money' - instead look at your net worth and how much of it you would be prepared to place on a single investment which does have a risk of losing all of the money you invest.

Cheers,

Aceyducey

 

[Jas]

I'm not sure that anyone will check '0 risk'. Won't they be the type of person who right now won't own any property as there is always a risk.

Jas

 

[Aceyducey]

Originally posted by Jas
I'm not sure that anyone will check '0 risk'. Won't they be the type of person who right now won't own any property as there is always a risk.

A risk of losing ALL your money......

There are some people on this forum who own no property - they may wish to pick the no risk option

Cheers,

Aceyducey

 

[geoffw]

On a black and white basis, I would not, and could not, put a risk on that sort of basis.

I'd have to look at the investment as a whole, and to determine what the upsides were, the downsides, the risk of failure, and the risk of success.

But, having lost out big time to a dodgy financial advisor, who assured me that the risk of a tax effective investment was minimal, I would not be interested in anything that left a risk of leaving me not able to feed the family or pay the bills. It happened once, and I could not go through that again.

 

[always_learning]

I think the point is how much would you risk then after taking into consideration the needs of your family. ie. if you had $1M you could risk $1 of it to gain $100K (buy a lottery ticket I suppose).

However if you had $100K you wouldnt risk $100K otherwise your family would need to scrounge for 1/2 eaten dropped hamburgers on the floor McD's.

How much would you risk and feel confortable with the risk?

 

[Peter_Tersteeg]

Most people have no trouble risking $1 to make $100k. The profits are 100,000% after all!

The reason I don't buy lottery tickets however, is because the odds are a lot lower than 100,000 : 1 and you have no control over them at all.

I guess I'd be willing to risk quite a lot, but I also like to have reasonable odds of success. The ability to influence these odds is also useful.

 

[Puppeteer]

I guess another way of stating the question would be

"How much money would you risk on a highly speculative investment where there could be high capital gains, but there is a chance that you could loose all of the money invested?"

 

[willair]

Interesting question,i would have no problem with the51k to100k
if the short term capital gain was in the deal ,and as long as the deal was legal maybe a new company float on the ASX next month..
good luck.
willair..

 

[BayView]

Right now, for me; could not make any investment an afford to lose any money.

However, end of this year will be getting the PPoR revalued, and depending on that we may have some equity freed up to possibly do something.

The only thing I could probably seriously consider would be something absolutely POS Geared and cheap somewhere to provide immediate cashflow.

But it'd be a bit of a desperation move, so not really sensible.

 

[nhg]

I was wondering why I didn't recognize any of the other posters (Other than Peter and Geoff). This is from 2004. Haha, I just voted.

I wonder when I'll become a relic on this site, or if my posts will have any value then.

I'm comfortable loosing up to $50k. Though I wouldn't call my investments RISKY as such. Well thought out mitigated risk perhaps.

 

[Ace in the Hole]

Feels like this post was just yesterday....the original.

 

[china]

Rule number one: Never lose money

 

[D.T.]

Rule number one: Never lose money

Yea its pretty safe in ya savings account mate

 

[skater]

The only thing I could probably seriously consider would be something absolutely POS Geared and cheap somewhere to provide immediate cashflow.

But it'd be a bit of a desperation move, so not really sensible.

A long, long time ago, we were desperate. On the way to bankruptcy in fact. So......I flew interstate & bought a few very cf+ properties. Long story how we were able to get the finance, so I won't go there. Anyway.....sold one, it was a dog, but didn't lose any money, made a small profit. Held the other for about 6 years or so (it was earning 15% yield) and it tripled in value. Sold for a nice profit which helped us get to where we are now.

 

[MTR]

Nice story Skater.

I never ask myself "how much can I afford to lose"... to me this is negative approach to investing. You can never afford to lose anything.

I prefer to look at each investment/deal/development and I always ask myself "what is the worst/best case scenario, and can I manage this"?

Perhaps this is the same thing sort of.... not sure????