Short excerpt from a spoken segment where Ndubuisi 'Andy' Egwim explains the difference between financial risk capacity (ability to bear losses) and psychological risk tolerance (willingness to take risk). He uses age/life-stage examples (19 vs late 30s, mortgage, dependents, income sources) to illustrate how capacity changes over time.
Risk capacity is different like I sent in my email risk capacity is financial risk appetite or risk tolerance is psychological for example 35 year old or let's say yeah I said 35 year old resident who's got maybe decided he's got another 30 years to work has other sources of income hasn't got any dependence or mortgage or whatever probably might have more capacity to be at risk it might be that even if things go bust Understand When I was 19 I obviously analyzed companies but what I had at that point I was investing wasn't very much and even if I lost all of it it wouldn't be very much it was my all and all at that point but it wouldn't be very much compared to now okay so I'm now In my late 30s I've got like mortgage, I've got like property I've got like dependence on different sites different level I've got charities support and different.
