Risk aversion is another under-appreciated obstacle to accum...

Risk aversion is another under-appreciated obstacle to accumulating and building wealth. When many people are first starting to save and invest, they zealously guard that grubstake against risk for fear of losing it all. Although it is understandable, the fact remains that the ties between risk and reward are hard to break. Though investors may rightly fear the relatively small risk of "losing it all," playing it safe means that they are earning lower returns and making it all the more difficult to build towards that first million. A portfolio of bonds and conservative stocks may outpace inflation, but it will make the road to $1 million very long indeed.

Conversely, once people have enough wealth that they feel comfortable and not particularly vulnerable to an economic downturn or bear market, they often take bigger risks. Not all wealthy people invest this way (Warren Buffett being a famous example of a wealthy and very conservative investor), but many do.