Well, this title can be interpreted in a few ways and one of the more obvious ways is to see it as being realistic to not over-leverage on your investments. As most of us know, many people are now committed to investing as if it is some kind of gamble. Many of us are undeniably holding to the belief that you would get rich overnight which cannot be further from the truth if you take the awfully low probability into account. While that might be important, I will not pursue that topic for now as I am going to expound on the less obvious interpretation where you literally have to own a lot before you could lose it. The value of this realization stems from the fact that we should always remind ourselves to take on an optimistic point of view even when the situation appears bleak.

Rich people all lose large amounts

Oh is it? What if they put them all in the safe or a time deposit account with zero risk? Then I would respond that that is akin to not having it in the first place. Zero risk often results in conservatism which will lead to living a rather mediocre life. While this is not true for everyone, we certainly have to admit that to grow our wealth, there is always some form of risk involved. Even when wealth is inherited, your predecessor would have had to go through tough times and huge amounts of risk in order to accumulate that amount in the first place. Therefore, do no fantasize that the wealthy do not suffer losses, in fact, they often lose in the same proportions and in large quantities.

Its easier to lose more when you have more money

Think of the well-known strategy like dollar-cost averaging, investors with more capital can certainly extend the range of their purchases while at the same time accumulating a huge sum of paper losses. In those situations, one can only imagine the losses might amount to a sum that is much larger than the average size of a portfolio. At that point, I would like many of us to consider being in that scenario while being significantly richer than most investors. Honestly, that would be a privileged-yet-unfortunate position that many would like to be in if they were less rich.

Why losing is a natural part of investing

I believe it’s a suitable time to remind ourselves that investing equals losing money due to the costly nature of volatility in the market. This means that if you want to reap the benefits of investing, you will have no other choice but to do a huge amount of money during the entire process. As an investor, I completely bought into this reality where you can only show where you reap and lose where you find yield. At the end of the day, what we can only get is some good decisions made and some not-so-good decisions made at the same time.

Closing thoughts

So now I hope I have made my point that you can only lose what you have in the first place. Do not assume that having more equals to being in a better situation because every strategy employed always exposes your capital to risk that often leads to stacking losses. Always take on the optimistic view as it will help you to stay objective rather than focusing on the inevitable losses in your investing journey.