Can LOW Risk Create Higher Returns? | 169

MORI 169 | Low Risk High Return


We always hear, “High risk creates high returns.” But isn’t that just crap financial institutions tell us, so we take all the risk for them?

Here’s how LOW risks actually create high returns! As a bonus, I’m including some of the questions I ask whenever analyzing any opportunity.

Tune in now as I discuss how you can actually lower your risk to make better and safer returns than what everyone is teaching you to do! 

Chris Miles Bio:

Chris Miles, the “Cash Flow Expert,” is a leading authority on how to quickly free up and create cash flow for thousands of his clients, entrepreneurs, and others internationally! He’s an author, speaker, and radio host that has been featured in US News, CNN Money, Bankrate, Entrepreneur on Fire, and has spoken to thousands getting them fast financial results.

Listen to the podcast here


Can LOW Risk Create Higher Returns?

Welcome to this wonderful episode that I’m excited to share with you. Quick shout out to our sponsors, American Homeowners Preservation. If you’re looking for a great way to get a great return on your money with as little as $100 invested, and you can make a difference in people’s lives by helping them stay in their homes or get out from under their homes, you got to check this company out. Check out American Homeowners Preservation. Their website is

The Myth Of High-Risk Creates High Returns

In this episode, I want to talk about that subject that I’ve been wanting to talk about for several months. I figured, “Now is the time to do it.” You hear all the time this myth of, “High risk creates high returns.” How many times have we heard that? You had to take a high risk to create high returns. This became a question in my mind because I believe this. Especially as a financial advisor, I taught this constantly. It’s taught throughout all financial professionals that if you want to get high returns, you got to take high risks.

Analyzing Risks

I remember I went to an event. These were some guys that were millionaires and investors. They did an event. This time was 2006. I was 28. When they talked to this event, they said, “There are all these myths like, ‘It takes money to make money. High-risk rates, high returns.'” I’m thinking, “That’s not a myth. That’s truth.” They said, “That’s a total myth because what’s the definition of risk?” Being insurance licensed since 2002, I knew that risk is a chance of loss. That’s what they said. They’re like, “Risk means a chance of loss. It’s a chance of losing. If a higher chance of losing, how can a higher chance of losing create a higher chance of winning?” Think about that.

How could a 90% chance of loss create a 90% chance of winning? It doesn’t. The math doesn’t add up. A 90% chance of loss means you have a 10% chance of winning. A 10% chance of loss means you have a 90% chance of winning. It’s a low risk that creates high returns. Not the other way around. A gambler mentality would say, “Take a high risk.”

It takes money to make money. Click To Tweet

That mindset would be a gambler mentality because if you were to follow that same premise, “High risk creates high returns,” your highest risk or highest chance of losing is to play the lottery. Play Powerball or something like that, where there are millions of people trying to buy tickets. There are billions of tickets purchased so that somebody can win a couple of billion dollars. It’s not even that much. Usually, it’s the hundreds of millions at the most when people get super excited. People are buying up like crazy.

If that were the case, you should cash out your entire 401(k) and every dollar you have, move out of your house and cash out the money you have. You have to ask yourself, “Why is it taught so prevalently that it is high-risk and creates high returns?” It’s because financial advisors teach it. Where do they get it from? They and all the other financial experts get it from financial institutions and banks that train them.

Trust me. I was trained as a financial advisor by these institutions. They’re telling you to get a high risk. Why would they want you to take the high risk? It’s easy because banks and financial institutions take the lowest risk possible. They don’t invest their own money in the stock market. Ask a bank for a loan to invest in the stock market and see what they say. They’ll say it’s against the law because it is gambling. They don’t give you money to gamble.

You can give your own money to gamble, but they won’t give you their money to gamble with. They’ll give you the things that are more certain, like business loans, loans for real estate, or even a car, which is a depreciating asset, but they will not give you a loan for the stock market. Granted, there are margin trading accounts you can do through certain brokers. The difference is those types of brokerage accounts monitor what’s going on with your account. If you start losing money, they do what’s called a margin call, which means they know what to do, “Pay us our money back then whatever you’re left with, hopefully, have something left.”

MORI 169 | Low Risk High Return
Low Risk High Return: It doesn’t matter what strategies you use if you can’t address or deal with your emotional issues or have emotional intelligence that can help you combat the scarcity in your life. Otherwise, that money could be gone.


Let’s say you have $10,000 in this trading account. You trade and buy a stock or an option on margin. Let’s say you got $10,000 more. You can only get a 1:1 ratio. You get $10,000 more from the “bank.” If all of a sudden, that stock drops almost half in price, they’re going to call you out. They’re going to say, “We’re forcing you to sell your stock so we can get all of our $10,000 back.” If that thing dropped 40% from $20,000 down to $12,000, they are like, “Too bad. I guess you are left with $2,000. Good luck.” You lost more. There’s a high risk there.

Calculated Risks

Notice that banks and other institutions don’t take high risks. If banks and institutions do that, why do they take the simple management fee of your money while you’re gambling in the markets? They’re letting you take all the risks while they don’t. It’s perfect marketing. You’ve been duped, had, even run amok. It doesn’t work that way. It’s low risks that could have returns going for the certain calculated risks that create a high return.

Nothing in life is risk-free, but you want to try to do everything possible to create as minimal risk as possible. Let me talk about a few concepts here. In fact, at the end of this, I’m going to share with you questions that I teach my clients to analyze any investment to know whether it’s a good fit or not. I even give them a nice little spreadsheet and stuff like that to use so that they can score it.

Insurance And Protection

Here are a few thoughts here. First and foremost, one of the ways the lower risk, besides believing that, “Low risk creates higher returns,” is through insurance and protection. We don’t want anyone’s life event to take away all the money that we’re building. All that hard work we’re putting in, you don’t want one event to take that away. This is why we have things like life insurance, for example. We need life insurance, whether you think you’re wealthy or not. Even if you are wealthy, you need it even more because you might have assets to pay off stuff, but the thing is that you’ve got state taxes. That could be a big issue down the road, especially if they repeal some of the tax laws that keep postponing on us.

A 10% chance of loss means you have a 90% chance of winning. It's actually low risk that creates high returns, and not the other way around. Click To Tweet

If you have a state tax, you can be paid up to 45% of the money of your estate to be paid to the government, not to your heirs. That leads to not just life insurance but also having a good estate plan, living will, trusts, and things like that. Have a good accountant or CPA to make sure that you’re getting the minimal amount of tax risk possible and also things like disability insurance. It should be called income insurance or cashflow insurance. That’s one of the most underrepresented or underestimated types of insurance. Disability insurance is what I’d like to refer to as cashflow insurance or income insurance. It protects your income. If you ever become disabled, that kicks in. That helps bridge the gap of your income loss if you can’t work the same job you used to.

I didn’t realize this before. I always figure that as more severe mental or physical disabilities. It also plays the emotional. There’s severe anxiety or depression that prevents you from being able to work. It also covers you. You have to make sure you have the right policies for that too. There’s also auto, home, liability insurance, or things like that.

I had somebody with who I got in a car accident. They had a whole battle about whose fault it was. In the meantime, the hospital bills had to be paid. They only had coverage up to about $50,000. The rest had come out of pocket. By the time they were done with court fees and everything else, they ended up being a split fault in the city of Utah. It means that one party is responsible for their stuff. The other part is responsible for their stuff. Nobody covers each other. They’re just responsible for their own things.

She ended up having to pay out of pocket $315,000 for something that she thought was going to be somebody else’s fault, but they couldn’t determine the fault, so they called it split fault. You don’t want any one event taking that away. Health insurance is covered, but we never know. Make sure you have all the coverages in those different areas. I’d also say, too, even emotional and physical protection, like your health doing like what we talked about in previous episodes, like the hour of power and those things during that morning ritual. It’s very important.

MORI 169 | Low Risk High Return
Low Risk High Return: You won’t get much better if you don’t have the interest or passion. But the ones that did will keep growing and getting better and better.


Make sure you’re taking care of your physical, mental, and emotional health. Working on my emotional health, as well as my physical health, has been huge in my business and my financial prosperity. I can’t tell you how much emotional stuff has caused financial detriment in people’s lives. It doesn’t matter what strategies I teach people. If they can’t address or deal with their emotional issues or even in different situations, having emotional intelligence and things like that can help you combat the scarcity and things like that that come up in your life, it doesn’t matter. That money could be gone. It doesn’t matter how smart you are. Emotional things can take them away.

We’ve seen that happen with people who do some crazy things. This is why you hear about people that are professional athletes or musicians, people like MC Hammer, who went bankrupt when they had $20 million. There are a lot of things that need to be trained and done on the emotional side, not just illogical, but there are emotional things that need to be addressed, especially around money and life in general. There’s physical health too. I watched the guy have a $120 million empire collapse, and his health collapsed with it. In fact, his health collapsed so badly. He nearly died. He has yet to ever rebuild that wealth again. It’s a big deal, so you got to be careful.

Questions To Ask When Analyzing Opportunities

Let me talk about some of these questions I address when I look at an opportunity. This is not just for investments. This is for any opportunity that comes your way. In my mind, investment is anything that requires your time, energy, and/or money. We want to make sure we protect against that. I’ve learned over the years that there’s been a lot of pitfalls and things that either I’ve justified or overlooked that have cost me hundreds of thousands of dollars. I want my pain to become your gain.

Some of these questions aren’t even just mine. Not a lot of these come from my own personal experience. I started to understand more why Warren Buffett does what he does and why he teaches what he teaches. If you think about Warren Buffett, his philosophy is, “Rule number one. Don’t lose money. Rule number two, obey rule number one.” He’s not about taking high risks.

Nothing in life is risk-free, but you want to try to do everything possible to create as minimal risk as possible. Click To Tweet

This is why he is, depending on the day, the wealthiest or at least the top three wealthiest guys in the world don’t want to take high risks. If you like business, I recommend watching a show like Shark Tank or The Profit. You can find those things even on like things like Hulu. Those are great shows that address how to minimize risk and why they ask the question they do. They might seem like jerks, but they make perfect sense.

Let me give you a few of these questions here. This is the number one question I ask every single time, “To what extent am I motivated by passion or mission rather than money?” It’s not that I don’t want to make money from that opportunity or investment. The question I’m asking is, “Is there something else? Is there something deeper than that?” If you’re just motivated by money, what makes us any different than you getting another job? Working a job, especially if you don’t like is working for the money, that man, or that paycheck.

If you go and do an opportunity or an investment only to make money, which 99% of people say they do, you’ll find out, like I did, that you were working for another paycheck. I maybe might leverage that paycheck, but it’s still a paycheck. Is there something that gives you interest? Is there a passion behind it? Do you enjoy it? I trained about 200 people in stocks and options back in the past, in the mid to late 2000s.

When I taught people to do that, I would teach them and say, “Why are you doing this?” Most of them are like, “I want to make money.” Some were like, “I want to get out of my job.” Others would say, “I don’t want to deal with people, so I’d rather make money online,” which is the exact opposite reason to make money because people or the reason there’s money exchange. There’s a whole other explanation there.

MORI 169 | Low Risk High Return
Low Risk High Return: If you understand the investment and how to make it successful, you can control the returns better.


The ones that said, “It’s fun. It would be cool to learn,” are the ones that kept getting better even when I wasn’t training them. The other ones would plateau. If they didn’t have a little interest or passion, they wouldn’t get much better. The ones that did keep growing and getting better at it. There are some of them that I said, “You’re better than me,” when I was doing a lot more trading. I don’t do much trading anymore. I didn’t care about it because it was fun for the time, but I didn’t have much of a passion or a reason to do it. I found more passion in teaching than I did trading. I felt disconnected from people when I did that. I lost passion a little bit.

Number two, how well do you understand the investment? How does it provide value to others? How to make it successful? Explain how you know. Do you understand that investment very well? Do you understand how it provides value because dollars follow value? Do you know how it creates value? I remember there was an “investment” that was called 12DailyPro. This was in 2006 when I started to learn this stuff. I had friends who were doing it. They say, “We know this violates the principle. In fact, it even says in the contract that you could lose money at any time, but that’s paying 24% every 12 days.” If you just left your money there, that means after 36 days, you would double your money based on that rule of 72 because it’s compounding. I was like, “That seems tempting.”

I remember asking my friend, “How did they make that money? That’s incredible.” I remember I was leaving the typical financial world at that time, the conventional stuff. He’s like, “I don’t know. My whole goal is to keep it in there for that 36 days, pull my money out and then let the rest gamble,” which it did because eventually, it shut down. There was a lady pretty much living in a trailer park out in South Carolina and hint him. They ended up freezing her accounts and found it was a total Ponzi scheme. Even in Utah, where I was, I saw the local news even talking about it where there are people that quit their jobs or cash their retirement, thinking that this was somehow the thing that was going to save them.

I live in a state where they call themselves conservative, which is bull when it comes to speculative-type investments. There are people gambling like crazy. Even though I know some people would go to Vegas, some don’t care about going to Vegas, but there are other opportunities that are worse than Vegas out here. That was one of them. They didn’t know how to make it successful.

We don't want any life event to take away all the money you are building, all that hard work you're putting in. Click To Tweet

If you understand the investment and how you can make it successful, you can control the returns better. This is why I asked you like, “What do you understand? What do you know well?” If they’re business owners, they might say, “Business.” Cool. Invest there. If it’s real estate, invest there. Where do you have some interests?

What’s interesting and fun for you? Invest there. In these first two questions, you do that. This will remove most of the options, especially if you have analysis paralysis, which is a risk in and of itself. If you have analysis paralysis and are not even sure where to invest, this could be the very thing that helps break that to say, “Cool.”

I know there are ATM deals and stuff out there. I interviewed a guest who got that. I know some people are super pumped about that. Others may not care, and that’s fine. For me personally, the ATM deals are cool, but that doesn’t make me nearly as happy as the AHP deal. I have personal involvement tied to it because I was that person that was trapped in a house of equity I couldn’t get out from. Nobody would buy it. I wish I had somebody like AHP to do it.

That’s why I put some money there. It doesn’t mean you should. I’m saying that’s why I did personally because I have a personal, emotional connection to it to say, “I understand that there’s value in that. I know how somebody could have made money had they done it. I couldn’t get out from under my house because it was a super expensive house.” You live and learn.

Investment is anything that requires your time, energy, and/or money. Click To Tweet

1) How much passion or mission do you have other than just making money? Hopefully, you have all three. You have passion, mission, and you make good money from it. 2) How will you understand the investment? How does it create value? 3) How much control or influence do you have on the outcome of this investment? This stumps everybody with a 401(k), IRA, or any mutual fund because somebody will say, “I have a little bit of control.” You do. You can pick a fund, but do you pick the stocks they’re investing in, the bonds, or anything else? Do you have any control over that? Do you have any control over the market in general? You don’t have any control or influence over it.

Even sometimes, people say, “I’m investing in some real estate stuff,” but they’re investing in a note, “Do you have any say in the matter?” “I don’t.” “Is it legit? Can you do much? Does that create or lessen your risk?” “Not really.” I had a guy that wanted to invest in oil and gas. It is something he was very interested in. He passed his first few questions pretty easily. After that, he wasn’t sure. He was looking at it. He came back with a score after looking at all these eight questions I did. He said, “If you have a few little questions here, I’m not sure about control. I don’t have control over this.” I said, “Did you ask them how you could have more control over it? For example, could you be on the board of directors?” “I didn’t ask that.” “Go back and ask.” He did.

He found out that the minimum amount he had to invest was only $50,000. He’s like, “I have more than that.” He got on the board of directors. After being on the board, he started to see some inside problems and said, “I’ve got personal gifts and strengths here. I can help control and make this investment better. I’ve got business experience, but you don’t, sadly enough.” He said, “Here’s the deal. I want you to appoint me as CEO. I’ve got great business experience and management experience. I can help the two of your departments communicate.”

The operation guys are oil drillers. They weren’t communicating well with the owners. The owners were looking at the numbers. The drillers were looking at the actual drilling and things like that in the engineering aspect, but they couldn’t communicate. They weren’t speaking the same language. My client stepped in between and became the liaison between them to make sure that everything ran smoothly, that there were organized and that they could be profitable.

Here’s the brilliant thing. Not only did he help ensure his investment by lowering his risk by saying, “This is what we can do. I’m going to lower the risk by making sure that everything is managed and under control, so this thing stays profitable.” He did not only ensure his risk, but also, by appointing himself CEO, he got himself paid $1,000 a month to work a few hours a week being a CEO. He’s making cashflow in two places, returns on his investment and making a little salary. That’s what I mean. The key right there is that you can lessen your risk dramatically.

There are other questions that I share on this thing. Things like, “To what extent does it generate predictable cashflow quickly within 90 days? Is it predictable cashflow? Is there a demand for the investment? Do you understand the philosophy of those people doing the investing and how they think? Do they think high risk rates high returns? Can you get your money back?” Those are all part of it. I don’t want the show to go on forever.

If you’re my client, great. You get this more in-depth anyways. These are all the questions that I look at to help lessen my risk. It’s done wonders for me. I’ve had clients who were about to start a business then said, “I didn’t do it.” It saves me $30,000 just by doing that. Low risk creates high returns. This has been true for my life as well. Even when I’ve had business opportunities come up, I asked myself, “Is this something I want to do regardless of the money?”

I don’t care about making huge commissions. People try to present me with opportunities about making more money. So what? I don’t care. Do I have control? Is that something that I’m aligned with that I’m passionate about regardless of the money? Would I do it? Is it something I know I can make my money back in? That’s why I look at my risk. That’s where I look at analyzing for myself what’s a good opportunity and what’s not. That is how you do it. Everybody, have a great and prosperous week. I’ll talk to you next episode.


Important Links