Why You Need To Make Asymmetric Bets

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Some people are afraid of taking risks.

Others are reckless with risks.

Yet risks are one of those things that can make a massive difference in your life.

So what do you do?

I’ve found a happy medium between those extremes in my life.

I take asymmetric risks… but what is that?

An asymmetric bet/risk is one where the downside is minimal and the upside can be enormous.

Let me give you an example: Let’s say you have $1000 to invest. You take 90% of that money and put it into something safe, like an S&P 500 index fund. Then you take your remaining 10% and put it into something that is much riskier, but has the potential to make huge gains.

Now let’s say that risky thing goes to $0. You lose that money, but you still have $900 that is untouched. You still have 90% of your money.

But let’s say that risky thing ends up doing really well. Maybe in the right market conditions, it goes up 500%. Now your $100 investment is worth $500 and your entire stack of money is worth $1400 now… all with you putting very little of your money at risk.

The best part about this is that you can then rebalance. You can sell off that riskier asset until it’s just 10% of your portfolio again and keep the balance in check.

But asymmetric bets are more than just money. You can make them with your time too.

If you work a 9-5 job but eventually want to earn a lot more money and maybe even escape your job, then consider making this type of bet with your time.

90% of your working time is spent on your main job, but then you allocate a small portion of your free time to building another income source.

Maybe a small biz. Maybe just a side hustle. Maybe something else.

The worst-case scenario is that your venture fails and you lose a little bit of your free time that you invested into it… you’d do that on tiktok anyway.

The best case scenario is that the little bit of free time helps you build something that eventually makes more money than your 9-5 job.

Asymmetric bets are incredibly powerful.

In the investing world, I have made these bets with various things in crypto. Taking small portions of my money and putting it into various cryptos that I really believed in.

This resulted in me greatly accelerating my journey to becoming a millionaire.

You could do the same… and do it even very simply. You could find an investment (like Bitcoin) that you only dedicate a very small percentage of your portfolio to, that one day could grow astronomically.

But I’ve also made these bets with my job.

When I was still working my last 9-5 job, I would steal as much of my free time as I could to work on building a side business.

I could have been having fun with friends all the time or watching all the new shows and movies. And I did do that too! I just sacrificed some of that time to build.

And what happened, was my side business grew and grew until it was making as much as my main job. Then I quit my job and went full-time with the business and it grew even more.

And the rest is history… AND I will never go back to working for someone else ever again.

So, I hope you consider the potential of making asymmetric bets in your life.

They have been one of the single most powerful driving forces in my life.

On my journey to becoming a millionaire, I’ve read a LOT of books. Well, I recently made a video sharing the 5 books that most influenced me on that journey. Check it out here:

See you next week,

Andy