RupeeCase
Education . Household Risk . 2 of 3
Rs 20 lakh joint pot . one bad year . equity down 35 . debt up 2
Three ways to set the mix. Only one survives the phone call.
How you set it
Equity
Pot falls
Cautious one
Priced to the braver oneHer 40 pct line
80 / 20
552000down 27.6 pct
Sells
Split the differenceThe blended moderate
55 / 45
367000down 18.4 pct
Still sells
Priced to the cautious oneHis 15 pct line
46 / 54
300000down 15.0 pct
Holds
15 not 27.5
Average the two appetites and the plan reads 27.5 percent of nerve. The account only ever had 15. The compromise tripped the lower line anyway and still sold near the bottom.
A 300000 drop lands on the cautious partner like about 675000. Losses run roughly 2.25 times heavier than a gain the same size, so the flinch is wiring, not weakness. Illustrative . not a guarantee.