Individuals should differ in their tolerance for risky financial investments. For one thing, people face different income streams. A freelance writer typically faces considerable variability in income, and long-term unpredictability. These should generally be compensated by less risky investment. But a tenured professor faces little variability or unpredictability and can thus afford to take more risks elsewhere, other things being equal. For another thing, people have different tastes for expenditures. Some people value the “finer things” that money can buy, while others are convinced that the best things in life are free.
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