Risk Takers and Successful Investors are Fundamentally Different Personalities

Risk takers are gamblers.  They are people that don't want to spend a lot of time thinking about all the possible problems, they want to just do it and rely upon luck and confidence in their own ability to succeed.  They therefore fail far more often than they succeed.

On the other hand academic literature that has been around for decades documents that successful investors are the opposite of risk takers.  They are cautious, conservative, thoughtful and careful.  They avoid risk.  The "risks" with their money they take are when they have checked every possible outcome repeatedly and are pretty convinced that in fact there isn't much risk involved.

These are generalizations of course, as any attempt to understand human economic behavior must be.  But politicians, and economic theorists often think of risk takers and investors as interchangable.  We need to keep their fundamentally different nature in mind if we want to make successful prognostications about how to keep our personal and public finances in order.