1. Take asymmetric risks in life
“My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla and $10m in Solar City. I had to borrow money for rent.”
This is a quote by Elon Musk.
If we analyse the philosophy of billionaires, they do take such risks and take them quite often.
People like us would probably never imagine re-investing such a huge sum into building new companies.
But let us first understand what ‘asymmetric risk’ actually means.
It simply means that you take a very high risk in a certain aspect of your life, for a very high reward.
Now, how can you develop this system? You can do 3 specific things-
1. Take the asymmetric risk approach in a small quantum.
If you are investing 10L rupees, you can invest at least 1L rupees in slightly riskier assets. If you are in the corporate world, you can take a risk, work on the weekends and build a side hustle.
2. By taking these small risks, over-time you will build confidence.
Risk-appetite is built over time.
3. Have a plan B.
If you go and speak to any person who has built a company or is creative, they are usually brimming with ideas. They always have 10+ ideas in their heads and always have a plan B, C and even D ready.
They are constantly thinking creatively about how they can make their ideas work.
2. Be comfortable with uncertainty.
Many of us are often conditioned to imagine and believe in the worst case scenario. This is not the right way of approaching anything in life, especially in today’s day and age when there are so many options available.
Let go of the pessimistic approach.
We do live in a world where nothing is guaranteed ever, but how will we know if we don’t even try?
Again, here are 3 things you can do to become more comfortable with uncertainty-
1. Develop critical thinking skills.
This simply means you should have the ability to assess an idea- whether it will work or not.
For example- Let’s say you want to sell a pen.
You know there will be high competition. What will you do to overcome it? What will be the other challenges? You have to think in a logical manner.
Critical thinking also means to have the ability to objectively analyse your strengths and weaknesses. If you want to build a company and you know you are not a good marketer, figure out how you will handle that aspect of the business.
2. Be optimistic.
Our brain believes whatever we tell it to. If you tell yourself you will never be able to dead-lift 85 kgs, you probably never will.
You will probably never even put on your shoes and go and give it a try.
But if you allow yourself to simply believe it is achievable, you will gradually move towards your goal.
3. Have a safety net.
Once you know you have X amount of money in your bank account, it gives you the freedom to take on greater risks.
Now, this X amount obviously differs from person to person. Make sure you always have a fall back plan.
3. Be simple in your living.
In India, if you take a look at Ratan Tata, or Narayan Murthy, one common thing you will notice is that they are super simple people.
Even Bill Gates and Mark Zuckerburg are not at all flashy.
They are super simple people focused on their traits.
Being simple allows you to-
– Focus on building your skill sets.
– Increase your ability to generate wealth.
– Work on your traits.
One practice you can follow to cut out the fluff in your life is to narrow down the number of decisions you have to take in a day.
4. Be confident and contrarian in life.
A classic example here would be that of Mark Cuban, a US based billionaire.
He was one of the early folks who got into the cryptocurrency space and started funding a lot of NFT based projects.
He is also an investor in the Indian blockchain space Polygon Matic.
He teaches concepts around finance to his son and also encourages him to invest in various assets.
Due to his contrarian practices he has received a lot of negative reactions from people, but he firmly held his ground.
As long as what you are doing is backed by rationality and logic, it is absolutely okay to stand apart from the crowd.
5. Think long-term.
When we are in a corporate job, most of the time we are thinking about our next promotion and that is it.
We live our career from promotion to promotion.
What you can do to think long term is to have 2 simultaneous goals. One big and one small.
If you plan to clear IIT entrances and also lose 30 kgs within one year, that is an insane goal. You will not be able to achieve it and get demotivated.
Rather what you could do is begin preparing for IIT with full focus (big goal) while cutting down on carbs (small goal).
Instead of having 2 bowls of rice, have one.
This will not deplete your will-power.
Practising the system of having one big and one small goal allows us to become a more strategic thinker over time.