Ep. 125 - Allison Schrager – From Brothels to Bonds: Unlocking the Mysteries of Risk
Allison Schrager is an economist and writer who has taken on the complex subject of risk in her illuminating works. With astute perception and a flair for engaging storytelling, Allison seeks to debunk commonly held myths about risk—challenging the widely accepted mantra of 'no risk, no reward.'
Allison's work probes into the subtleties of risk management, emphasizing that while society often chooses to ignore the inherent trade-offs of pursuing greater rewards, acknowledging these risks is crucial for not only successful investing but in every aspect of life
Two Key Takeaways
Financial planning must transcend beyond portfolio performance to include risk management and lifestyle planning.
Consideration of inflation uncertainty and purchasing power is vital for the health of your financial future.
Please enjoy my conversation with Allison Schrager.
Other Resources You May Like
1 Big Idea to Think About
Challenge the myth of 'no risk, no reward' as Allison Schrager takes you on a journey in this episode of the 'Emotional Balance Sheet Podcast.' Consider that a nuanced understanding of risk, drawn from unexpected places like negotiation in sex work, can reshape not only your financial decisions but also your approach to life's uncertainties.
1 Way You Can Apply This
Incorporate a holistic approach to financial planning by considering not just portfolio performance but also the management of risks in various aspects of life, inspired by Allison Schrager's discussions on Understanding Risk.
1 Question to Ask
How can a nuanced understanding of risk, drawing lessons from diverse fields like negotiation in sex work, reshape our approach to financial decisions and personal choices?
Key Moments From the Show
Risk Pricing in the Sex Industry (00:17:45 – 00:18:27): Allison Schrager delves into the complexities of risk and pricing in sex work, comparing legal brothels to the illegal market.
Human Capital and Portfolio Management (00:20:51 – 00:21:08): A discussion on how financial planners should approach educating individuals on investment risk, especially for young investors.
Insightful Literature (Throughout): Exploration of Allison's new book, "An Economist Walks into a Brothel," and the dynamics of risk aversion in both life and finances.
Redefining Financial Planning (Throughout): Emphasizing the need for financial planning to go beyond portfolio performance and include risk management and lifestyle planning.
Navigating Uncertainty (00:26:37 – 00:26:55): Insights on why considering inflation uncertainty and purchasing power is vital for the health of one's financial future.
Risk Myths Debunked (Throughout): Discovering the reality behind the "no risk, no reward" myth and the importance of recognizing trade-offs in decision-making.