What Skills Do You Need To Be Rich?(4)

We can look at this four samples {0,0,10,10}, {9,9,1,1}, {6,4,4,6} and {5,5,5,5}.

The average for all of them is 5.

Standard deviations are5.77, 4.62, 1.15 and 0.

We can see that in the first sample value can change a lot and that it carries the highest risk.

The fourth sample doesn't carry any risk (value is always 5).

Therefore the smaller Standard deviation the better.

There is a theory that helps us to create the most efficient portfolio (meaning the best return rate and minimal risk).

For now we can say that if we have have to choose between two investment opportunities with the same return rate, we will select the one with smaller risk (ie. Standard deviation)

It is mentioned above that using a spreadsheet program can help a lot.


That means that some kind of Computer skills are necessary.

It is not necessary to be a programmer in NASA.


Basic level of computer knowledge is enough with some knowledge about spreadsheet programs (MS Excel, Open office Calc, or some something else).

Also you will need and access to the Internet, and have some Internet skills.

Expert knowledge is not required, just surfing and searching the net.

An that would be all for the beginning.



By Zoran Maksimovic