Risk Management or Rate of Return?

Risk Management vs Rate of Return

I always tell my clients to focus on risk management, not rate of return.

Wealthy people focus on preservation of capital instead of focusing on return on capital. So should you.

Did you know that if you lose 30% on your investments, you need to earn almost 43% to get back to where you started. What are the chances of that happening quickly? Wouldn’t it be better to not lose the 30% in the first place?

Here is an example:


Turns out, you need to make some pretty significant gains in order to recover from a loss. Here’s a table with the actual numbers.

Loss Gains Needed to Recover
10% 11.1%
15% 17.6%
20% 25.0%
25% 33.3%
30% 42.9%
35% 53.8%
40% 66.7%
45% 81.8%
50% 100.0%
55% 122.2%
60% 150.0%
65% 185.7%
70% 233.3%
75% 300.0%
80% 400.0%
85% 566.7%
90% 900.0%

It just so happens I have a solution of where you can store your money where it never loses value. It has not lost value in over 100 years.

Want to know what it is?

An investment that hasn't lost any money in over 100 years seems unheard of, right? Well it's not. There is a way to manage your money and invest in the future where you always have a positive return, regardless of how the markets are doing. It's part of my strategy of Becoming Your Own Banker.