There is something very respectable about the Warren-Buffet school of investment, to watch patiently, drinking in the details, and then to strike only when you know the stars are truly aligned. All said, in fact, risk is given an awful talking-down in most financial circles, and high-reward high-risk strategies are seen as the mark of the rookie.
He/she who would risk it all for a big payout secretly believes they can’t lose. They’re stuck in the childhood delusion that somehow they are special; that, when they take a risk, they’ll be rewarded. This is what goes through the mind of the people who tut and hiss when they hear about out-there stock or a well-guarded secret. "No pain, no gain", they mutter sagely.
But what if this is just a prejudice? People are, after all, free to do as they please. And, is it really any better to lose ten dollars one-hundred times, over a month, than it is to lose one-thousand dollars in a second? There are downsides and upsides to both.
In this article, we look at three great high-risk high-reward income strategies.
1. Forex trading
Forex trading is a potentially high-risk endeavour due to the ratio of leveraging. To those that do not know, a leverage is the ratio of the total money traded (to be lent by the broker) that's needed to buy into a transaction. In forex trading, the ratio can be as high as 1000:1, meaning you’d only need one-thousand dollars to trade one-hundred-thousand dollars for foreign currency.
Now, the risks of forex trading are plain. Such huge leverages increase the margins for losses and gains, but there is another piece to the puzzle. The fact is the magnitude of the leverage in forex is such because brokers consider this market to be typically stable. So, in a sense, it’s a risk founded upon a security.
2. Start a software company
With role models such as Elon Musk and the late Steve Jobs never off of the front pages, it’s no wonder that every other entrepreneur wants to get involved in tech. But the success rates on tech-startups may lead you to consider a career in alchemy to be a better option.
The reasons here are complicated. On the one hand, the mutability of digital means that virtually any idea can be realised; on the other, Price’s Law holds firm: only a tiny fraction of all the stuff people churn out is going to be of any use.
This leads the majority of tech firms to fail within the first year. Those that don’t, however, can be vastly profitable.
3. Become a professional athlete
While this one’s slightly tongue in cheek, the idea of high-risk high-reward occupations is worth looking into. Other such careers include military service, commercial diving and flying. Generally, high-risk jobs such as logger or miner are not remunerated at anything like the fair threshold but don’t let that put you off. Really, the equation is more like 'risk times skill equals money'.
If you have that sought-after ability and you’re willing to risk life and limb (and finances), you’ve made it.
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