Risk Tolerance Is a Lie Until It’s Tested...

I once had a man sit in my office and confidently tell me he could handle a 60% drawdown. He said it casually, almost proudly, as if it proved something about his toughness.

That was his natural state.

Then markets drop. Suddenly his account is down seven figures. His wife is asking questions. His kids’ college timeline feels uncertain. That’s his adaptive state.

There is a massive difference between how you think you’ll behave and how you actually behave when capital evaporates.

Mike Tyson said everyone has a plan until they get punched in the mouth. Markets punch hard.

Risk tolerance is what you say when you’re comfortable. Risk capacity is what your life can actually absorb without altering your relationships, your sleep, or your decision-making.

If losing 50–60% would change how you act that night, you shouldn’t be positioned to lose that much.

This isn’t about fear. It’s about alignment.

Real families don’t get unlimited resets.