Risk-Return Tradeoff
Blame the focus of this edition of Perfectly Unwrapping on my son-in-love. He's a fan of Showtime's BILLIONS (a drama based on the legal battles between the U.S. Attorney and a hedge-fund king) and after a week of binge-watching; I'm now HOOKED!!! While there are several plots played out in each episode, one that is consistent is the obvious dilemma revolving around the risk-return tradeoff the hedge-fund king always finds himself exploring with his staff.
So after finishing the first of four seasons, risk-return, risk-return, risk-return kept ringing in my head lol. And at no time did I consider the idea of any implication with regards to our family's personal financial portfolio, so I pondered for a bit...hmmmmm...what's this all about...???
When thinking about these terms from a business perspective, we understand the spectrum is the relationship between the amount of return expected based on the amount of risk taken in any investment. Fairly simplistic, but almost never that smooth when money is involved. And so many leave it up to the "experts" who study the trends, follow their hunches and provide the best analysis they can on what's the best move to make to secure financial success for their clients!! Easy enough, right?
So I started thinking about all the "return" we work for in life--THE THINGS!!! We expect that our investment of time over the years, in exchange for financial compensation, will result in the reward that we determine is necessary (food, transportation, shelter...) or discretionary (education, vacation, just stuff...). And of course, the risk, for the most part, is banking on a system that follows The American Dream right? Upward mobility is achieved through hard work. Not knocking this at all. In fact, this model has proven success, even biblical foundation-
“God will repay each person according to what they have done”
Butttttt, when we take this model AND align it with God's model, I'm convinced that we receive exceedingly abundantly above all that we ask or think. (Ephesians 3:20 NIV)
You see, God's model not only removes the risk factor but GUARANTEES THE RETURN. THE REWARD!!! And no hedge-fund expert necessary...We go right to THE REAL KING directly!!! His Word confirms this over and over again--
“Walk in obedience to all that the Lord your God has commanded you, so that you may live and prosper and prolong your days in the land that you will possess”
“Ask and it will be given to you; seek and you will find; knock and the door will be opened to you”
He makes it clear to us what we need to do and trust me, it works. And the wonderful part is that God qualifies ALL OF US. He doesn't show favoritism (Acts 10:34), so it doesn't matter what we have or don't have coming into the relationship--He's only concerned with our RETURN!!
Hedge funds, investments, etc....those aren't my lanes, so I'll leave those to the experts---I'll stick with what I know--While higher risk is understood to be necessary for higher return; I'll go with NO RISK = HIGHEST RETURN!!! I don't have to keep on top of the trends or rely on a hunch. I encourage you to do what I do---Just TRUST THE WORD OF GOD!!! Worth more than billions!!!!