Alison Schrager, Allison, Chris Hill discussed on Motley Fool Money
Nothing is beautiful. Welcome back to motley fool money. I'm Chris hill. What do movie producers prostitutes and big wave surfers have in common? Well, if they're successful. They are all good at managing risk. It is the central topic of the brand new book, an economist walks into a brothel and other unexpected places to understand risk, economists journalist and author Alison Schrager joins me now from New York City. Allison, thanks for being here for having me. So you traveled all over the country interviewing people who are each in their own way experts at managing risk. There are so many interesting stories in your book, but we should probably start where you start in chapter one, which is at the moonlite bunny ranch a legal brothel in Nevada. What did you learn there? Well, many things as you do the the main thing I learned was how the sex work industry the price on risk because you know, I was sort of searching out interesting stories and Sicily whiskey industries and sex lurk is traditionally fairly risky jaws to do you you meet customers, and you put yourself in very intimate situations with them and just being in an illegal market. Maybe you're not attracting the best people you risk being arrested. All I've done a lot of research on the illegal market, sue and all will do have a lot of bad stories. So I went to the bunny ranch to see how they price eliminating that risk. Because a lot of those risks are eliminated. They're you know, there's security so you can't get violent with women. It's legal. Sue can't get arrested. The women are these are. For diseases each week. So it turns out as you might expect that there's a huge markup for this service because it is risk free. And this is the central theme and finance is that you pay to reduce risk. Books out there about macroeconomics. There are a lot of books about investing. Whether it's in options or commodities or stocks of this is a book about risk. What do you think? Most people misunderstand about risk. This. I think I find that people really are smart about taking risk in one area their life. We have it in us. But they don't realize that is a science and away of thinking about it that can make it a little bit user to manage to. You can feel more comfortable taking brisk on I think people just sort of feel lost especially when it comes to personal finance since we moved away from defined benefit to 4._0._1._K type pension plan to put this huge risk problem when everyone and just no tools and.