Risk, middle age crisis, and the black swan

It’s an old idea to divide people into four categories based on their risk and reward(expected value or EV) tradeoff. This choice, however, has higher stake than most of us realized. It occurred to me after looking at lives around me and reading several books on this topic. They point to a consistent explanation which makes the content of this post.

A side note. One of the books I read is by Nassim Nicholas Taleb, and I adopted some of his style. I apologize if this is offending to some readers.

Low risk, low EV

This is the choice of the majority of the middle class. They are dominated by the fear of uncertainty. The low return being in the future but the introduced uncertainty being immediate, it’s human nature to be blind toward the future and worry about near threats.

My mother is a model in this quadrant. She can’t bear with anything not in her daily routine. One day, I told her to ask her bank what’s the account number. She told me she lost all appetite for any food that day. It’s not that her banker is mean or she doesn’t touch money, but that she hasn’t asked a banker about account number.

Those middle class parents spend their lives being winners at school and work, yet were stressed by the middle age crisis, having labored for their whole life…