How entrepreneurs invest:
Entrepreneurs have a high risk “job”.
They consistently take risks in order to sustain and grow their business, so they treat their earnings carefully. They research before investing, and when they decide to do so, they choose for low and medium risk investments because they prefer guaranteed (nothing is ever guaranteed) returns on their money. Examples include Real Estate and Stocks/ETFs. As long as their investments are growing, they are satisfied.
How people with a fixed income invest:
People with a steady monthly income have a relatively low risk job compared to entrepreneurs. After settling their living expenses and fixed bills, they can spend the rest of their money on non-essential items or high risk assets. They invest for example in Cryptocurrencies, or, like some of my friends do, they gamble their money away on sports bets.
People with salaries are more likely to suffer from FOMO (Fear of missing out). Everyone around them is making money in cryptocurrencies, and they are thinking that they are missing out on life-changing opportunities. It’s funny how you only hear about the people that make money with speculative assets, but not about the majority of people who actually lose money.
So some people with steady salaries as a safety net gamble whatever money is left every month on meme coins (that might 100x in value). A lucky gain can be life changing, but highly unlikely.
Notes:
- There are always exceptions to the rule.
- What one defines as risk does not represent an others’ definition of risk. The more a person knows about a topic, market, industry or niche, the less risky it is for them.
TL;DR:
The “riskier” your occupation, the safer your investments.
The “safer” your occupation, the riskier your investments.