You’d think investors would want to delay profits for more money overall. It doesn’t make sense. Why are investors like the dumb game show kid that wants the stuffed giraffe instead of a paid family vacation?
You’d think investors would want to delay profits for more money overall. It doesn’t make sense.
Up to a point less money now is actually worth more than more money at some point in the future. The concept is called ‘discounted present value’, but basically hinges on the fact that money that you have now is risk free, but money that you might receive in the future has a certain amount of risk, and the longer and more uncertain the wait, the higher the risk. The higher the risk, the less that future amount is worth, after all, if you have money now, you can invest it now.
If the risk associated with the future gain is low enough, and the potential payout large enough, investors will stay invested, otherwise they’ll demand as much of a return as they can get as soon as they can get it.
You’d think investors would want to delay profits for more money overall. It doesn’t make sense. Why are investors like the dumb game show kid that wants the stuffed giraffe instead of a paid family vacation?
Up to a point less money now is actually worth more than more money at some point in the future. The concept is called ‘discounted present value’, but basically hinges on the fact that money that you have now is risk free, but money that you might receive in the future has a certain amount of risk, and the longer and more uncertain the wait, the higher the risk. The higher the risk, the less that future amount is worth, after all, if you have money now, you can invest it now.
If the risk associated with the future gain is low enough, and the potential payout large enough, investors will stay invested, otherwise they’ll demand as much of a return as they can get as soon as they can get it.
Making money is their dopamine hit and they’re addicts.
also very much seems to feed their sense of self-worth, big number == better person