If someone forgoes $10,000 in order to receive 10,000 x $1.00...

If someone forgoes $10,000 in order to receive 10,000 x $1.00 shares instead have they risked their own money?

I would highly recommend anyone struggling with this concept read some of Daniel Kahneman & Amos Tverskies experiments (these dudes were The Godfather’s of behavioral economics and we’re responsible for “prospect theory”)

They also performed a series of other highly influential experiments that explain peoples (investors) attitude to risk.

Essentially people can perceive 2 mathematically identical scenarios very differently depending on how it is framed up:

Foregoing $10,000 in order to receive 10,000 x $1.00 shares is exactly the same as receiving $10,000 and using it to buy 10,000 shares.

No more or less risk has been taken by the recipient of said shares, and they have no more or less ‘skin in the game’ under either scenario.

Every investor should read “Thinking Fast & Slow” (Kahneman). It may very well change your life.