[B]The First Major Axiom:
ON RISK
Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.
It is the central assumption of modern psychology that mental health means, above all, being calm. This unexplored assumption has dominated shrinkish thought for decades. How to Stop Worrying and Start Living was one of the earlier books dealing with this dogma, and The Relaxation Response was one of the later ones. Worry is harmful, the shrinks assure us. They offer no trustworthy evidence that the statement is true. It has become accepted as true through sheer relentless assertion. Devotees of mystical and meditational disciplines, particularly the eastern varieties,
go still further. They value tranquility so much that in many cases they are willing to endure poverty for its sake.
Some Buddhist sects, for example, hold that one shouldn’t strive for possessions and should even give away what one has. The theory is that the less you own, the less you will have to worry about.
The philosophy behind is, of course, the exact opposite.
Perhaps freedom from worry is nice in some ways. But any good Swiss speculator will tell you that if your main goal in life is to escape worry, you are going to stay poor. You are also going to be bored silly.
Life ought to be an adventure, not a vegetation. An adventure may be defined as an episode in which you face some kind of jeopardy and try to overcome it. While facing the jeopardy, your natural and healthy response is going to be a state of worry. Worry is an integral part of life’s grandest enjoyments. Love affairs, for instance. If you are afraid to commit yourself and take personal risks, you will never fall in love. Your life may then be as calm as a tidal pool, but who wants it?
Another example: sports. An athletic event is an episode in which athletes, and vicariously spectators, deliberately expose themselves to jeopardy – and do a powerful lot of worrying about it. It is a minor adventure for most of the spectators and a major one for the athletes. It is a situation of carefully created risk. We wouldn’t attend sports event and other contests if we didn’t get some basic satisfaction out of them. We need adventure.
The economic structure of the world is rigged against you. If you depend on job income as your main pillar of support, the best you can hope for is that you will get through life without having to beg for food. Not even that is guaranteed.
Oddly, the vast majority of men and women do depend principally on job income, with savings as a backup. It used to annoy Frank Henry that middle-class people in America are pushed in this direction inexorably by their education and social conditioning. “A kid can’t escape it,” he would grumble. “Teachers, parents, guidance counselors, and everybody else, they all keep hammering at the kid: ‘Do your homework or you won’t get a good job.’ Getting a good job – that’s supposed to be the high point of anybody’s ambitions. But what about a good speculation? Why don’t they talk to kids about that?” I was one kid who got talked to about it plenty. Frank Henry’s rule of thumb was that only half of one’s financial energies should be devoted to job income. The other half ought to go into investment and speculation.
The only way you are ever going to lift yourself above the great unrich – absolutely the only hope you have is to take a risk.
Yes, of course, it is a two-way street. Risk-taking implies the possibility of loss instead of gain. If you speculate with your money, you stand to lose it. Instead of ending rich, you can end poor.
But look at it this way. As an ordinary tax-hounded, inflation-raddled incomeearner, carrying much of the rest of the world on your back, you are in pretty sorry financial state anyhow.
What real difference is it going to make if you get a bit poorer while trying to get richer? You aren’t likely to get much poorer, not with as part of your equipment. But you can get very much richer. There is farther to go upward than downward – and no matter what happens, you will have an adventure. With the potential gain so much bigger than the potential loss, the game is rigged in your favor.
All this talk of risk and worry may make it sound as though the speculator’s life is lived at the edge of a precipice. This isn’t so. True, there are times when you get that shuddery feeling, but such times come rarely and don’t usually last long. Most of the time you will be worried only enough to make life spicy. The degree of risk we are talking about really isn’t very great.
Virtually all gain-oriented financial manipulation involve risk, whether one calls oneself a speculator or not. The only nearly risk-free course you can take with your money is to put it into an interest-bearing bank account, a government bond, or some other saving-like deposit. There is risk even in doing that. Banks are known to fail. If a bank collapsed with your money stuck inside it, the Federal Deposit Insurance Corporation (FDIC) would reimburse you, but only after a long delay with no interest. If dozens of banks were to turn belly-up all at once in some nationwide economic
catastrophe, then not even the FDIC would be able to fulfill its obligations. It, too, would fail. Nobody knows what would happen to depositors’ money in a situation like that. Luckily, there is only a small chance that such nightmares will come to pass. A bank account is as close to riskless as any investment you are ever going to find in this chancy world.
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