The Secret to Building Wealth Fast - Asymmetric Risk

Definition:

Asymmetric risk/opportunity: Risks/opportunities where rewards are higher than the costs of participating with a decent likelihood of success. (lose a little but win big if it works out in our favor)

Summary:

One of the big reasons why most people will never be rich is because they don’t understand the concept of asymmetry.
Embrace risk. You can’t remove the volatility, so instead of it killing you, use it to win big!
Leverage against digital products.
The biggest asymmetric risk of it all is doing all of this when you’re young. Even if nothing works out, you’ll still have enough time to make it back.
An investment can only go down 100%, but its potential upside is infinite.
Take emotional fear out of your ability to try things.
In order to take full advantage of asymmetric opportunities, you need an income machine. De-risk an investment through education. Figure out how to make more money than you need to survive and invest the rest consistently.
Invest in asymmetric opportunities consistently. Plant your seeds and water them regularly. It won’t be long until one of these opportunities will bear enough fruit for you to focus on it exclusively. The catch is you don’t know when it will happen. So, the best strategy is to keep putting in the work.

Notes:

Invest in tech start-ups. 6/10 fails, 3 may do good enough and 1 will cover for all losses and give back more!
Start or join a company where they give you shares.
Examples Asymmetric Risks in Investing:
- Investing $5000 in Amazon’s stock in 2001 when it was $5/share would have given us a return of $3.2 million in 2022.
- Investing $1000 in Bitcoin in 2017 would have given us a return of $100,000 in 2022.
Create content that lives forever. As long as people find value and keep consuming it, you’ll get a return.
- Write books.
- Start a podcast.
- Tweet ideas.
- Post on social media.
All these have the potential to reach millions of people and the collateral benefits outside of digital likes are enormous.
By making products digital, we only make it once and sell to everyone.
Move to big cities, travel a lot!
Network and go to parties.
Go to business events.
Read books. Every once in a while, one book comes along that connects key pieces of information and gives us exponential growth.
Invest in crypto.
Invest in automation and digital technologies.