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Hurdle Rate

A disclaimer: I am not writing for you. I am writing for my future children. I also realize that I am writing this in my mid 30s where my perspective is inevitably incomplete. The world is filled with noise, uninformed outrage, an affinity for drugs, problems that don’t matter. The people who let those things consume their lives tend to live lives of no consequence. On the other hand, a life filled with the things you choose to care about, I think, is a more meaningful life. That is, either you care about things that other people choose for you, or you choose the things you want to care about.  In finance, an important concept is that of the hurdle rate. The idea is this: all investment ideas that you expect to return below a certain number, you reject. Above that number, you invest in. If all you have is very high returning investments, the idea is your portfolio will tend to be very high returning. One corollary: the higher your hurdle rate, the harder you have to work to find invest

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