Should you become and investor?

So I was listening to NPR's "Marketplace" segment and they were talking about who should and should not invest.  Sadly, for the life of me I can't seem to find the name of the interviewee, but suffice to say I give credit for the wit of this to NPR.

It's a simple coin toss game.  Heads you win, tails you lose.
Would you bet $1 to win $6?  Most would and everyone should.  I would empty my bank account and sell my left nut for those odds.
Would you bet $2 to win $6?
Would you bet $3 to win $6?  At  this point certain people will stop to think twice.
Would you bet $4 to win $6? Many would say no.  Many would be very happy to play these odds.
......
and finaly....

would you bet $5 to win $6?  So, would you?
If you said no, then you should not invest...in anything.  Sound harsh?  Well statisticly this is a good bet.  Over 1000 coin tosses and you will be up.  You will lose some, but you will eventually be up.

The idea here ( as I understood the interview) is you need to be able, willing and ready to take a loss in order to gain in the end.  Also, you need to know and understand the risks of your investment before you put your hard earned cash out there.  Stocks go up and down daily.  Real estate cycles every few years.  Along those ups and downs are losses and gains.  Knowing which odds to bet at is the key to eventually winning.

 As a parting note.  I urge everyone to understand what it is you invest your money in.  Did you have an advisor pick out your last car.  Of course not.  He would have bought you the boring all white sedan because resale value is higher or some nerdy accounting thing, and buying a car is a big investment right!?.  Ok, well then why do you let an advisor put your money in areas you don't know about?  Kinda like going to the casino blindfolded.  DON'T DO IT.  Educate yourself and be an active investor!


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