Ask any investor—any real investor—they’ll tell you they expect to receive a return on their investment. When they go through the trouble and risk of putting down capital on a venture of any kind, they want to be rewarded for their risk. And it’s in that space of stepping out into unknown territory where the possibility of a return is realized.
In the realm of finance and investment expertise, there’s a wide range of advice to be given. It can become this confusing space where, in the multitude of options, clarity is lost. But this principle is always in effect: you want the greatest reward for the least amount of risk. It’s a happy medium like anything else. Advisors will tell you that when you’re young you can afford to take on more risk, because if an investment does go bad, you still have time to make up for it. Older investors, however, are advised to take minimal amounts of risk since the commodity of time is not on their side. The thinking is that if they get wiped out in their later years, they won’t have time to recover their loss. Good advice.
Regardless of any other factors at play, there’s always one thing that’s true of investors: no one ever expects to lose money on their investment. They always want to get something back for what they put in. In fact, they don’t want to just get back what they put in. That would just be a cookie jar fund. They expect to receive what they put in plus a return on that investment. That’s just as basic as it gets.
Should an investor feel guilty for that? No, that’s what investing is for. It’s a relationship of mutual benefit for both parties. The company or person receiving the influx of cash is thankful to have the working capital in order to grow and conduct business. And the investor is thankful to receive a return for the use of that cash. It’s not gambling, it’s investing. Gambling is Win-Lose, but investing is Win-Win. This is really a principle on which so much of an economy is based. It’s a principle of growth, a principle of expansion, a principle of producing a fruitful environment. And economies are either doing one of two things: they are either expanding, or they are contracting. Expanding is better.
The question in any investment advice isn’t whether you should invest, it’s just a matter of what you should invest in. The idea of investment, itself, is a given. We just decide on what we are going to invest in. We decide on those things we see value in and then move on that idea with our resources. Sometimes our society has cast the world of finance with a negative connotation. It’s seen as a world of greed, or avarice. And it can be that. But it doesn’t have to be. It’s not meant to be a world of greed, it’s just meant to be a world of expectation.