Predicting Advice From My Future Self
Life lessons from a wiser you
When it comes to investing, a key piece of advice you will get from any advisor is to understand your risk tolerance. This is practical on paper, but how does one truly calculate their levels of risk?
A practice that can help is to visualize potential losses, and to project how that would make you feel. I first started to do this with investing after learning about Daniel Kahneman’s theory on loss aversion:
A phenomenon where a real or potential loss is perceived by individuals as psychologically or emotionally more severe than an equivalent gain
Imagine how you would feel in two years from now if the investment you made doubled. How would you feel if instead it was cut in half? Or went completely to zero?
Doing this with investing is helpful for sure. But what I think is really beneficial is to do this with all aspects of life.
At age 29 I try to think about the advice I would give my 18 year old self if I was in a room with him for a few minutes. I wouldn’t give him specific advice. It would still be up him to wander and make mistakes. But here is what I would say to him.
Be bold. Take more risks. Lighten up on yourself. Have fun.
That’s it. At 18 I took myself way too seriously. I thought I was so grown up. I thought I had to be perfect and have it all figured out.
At 29 I wish I could give my 18 year old self a hug. He was so young.
Now on the flip side I like to predict what my 40 year old self would tell me now if he could.
I’d imagine it would go something like this:
Be bold. Take more risks. Lighten up on yourself. Have fun.
Everyone is so eager to take advice from others. But really we should be thinking about what advice we would give ourselves.