> All investments come with some level of risk and riskier investments, on average, provide a higher return.
Average outcome is computed by summing multiple potential outcomes, and diving by number of trials. It's completely meaningless in the context of big life decisions, because you don't get many trials - you get one or, at best, several.
By illustration - let's say someone offers you to either take a guaranteed $1000, or a wager where you flip a coin and, if you win, you get $502k, but if you lose, you owe $500k. That wager has a expected value (i.e. average outcome) of $2k, which is greater than the guaranteed $1k you'd otherwise be getting. And yet, it's obviously a terrible choice, due to 50% chance of giving you debt that will cripple you for life.
Average outcome is computed by summing multiple potential outcomes, and diving by number of trials. It's completely meaningless in the context of big life decisions, because you don't get many trials - you get one or, at best, several.
By illustration - let's say someone offers you to either take a guaranteed $1000, or a wager where you flip a coin and, if you win, you get $502k, but if you lose, you owe $500k. That wager has a expected value (i.e. average outcome) of $2k, which is greater than the guaranteed $1k you'd otherwise be getting. And yet, it's obviously a terrible choice, due to 50% chance of giving you debt that will cripple you for life.