It's arguable that this year simply revealed the instability that was always already there.
Common financial advice is that if you want to invest in growth assets, such as shares or property, you need to have several years up your sleeve.
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That's because history shows us that over a period of time, such investments make us money.
But month to month, you can't be sure what will happen with them. So you need the time in order to embrace the instability that is a feature, not a bug, of these types of investments.
Then Covid-19 appeared out of nowhere and showed exactly how unstable things could get.
So it's timely then, that financial journalist and columnist Richard Meadows is releasing a book that combines philosophy and personal finance advice in order to show us how the world has always been unstable, and how to both increase that instability and ride it out.
A core focus of his book 'Optionality' is learning how to perpetually exploit those options, in order to give yourself the best chance of success.
Meadows argues that in order to make the most of the opportunities of life, you have to embrace risk. This isn't flailing about into unknowable situations, but rather, highly strategic risk-taking.
The idea is to always be looking for opportunities that could have a big potential upside, and very small downside.
Some of them might not work out, but you only need one to work in order for your life to change.
Someone using this strategy might devote a portion of investment money into startup businesses.
Not the whole portfolio, because that's entirely too risky. But enough that you're in on the ground level with businesses that you believe have big potential, using money that won't ruin you if you lose it.
These will not always pay off; more startups will fail than succeed. But by taking the chance, in a contained way, you open yourself up to that chance of meteoric success.
It's not earning more by driving for Uber, as that has a set amount you can earn, and therefore a limited upside.
Although you could of course do that and then use the money earned to make these types of investments.
Meadows also points out the necessity of minimising downside risk, so that as you open up your chances for success, you're minimising the possibility of it all being derailed by a struck of bad luck.
While it may seem banal, on that list is getting insurance. A small cost per month and you reduce the likelihood of losing everything to a medical accident, or natural disaster.
Another on the list is certain drugs, that while momentarily intoxicating, could quickly pull you down the rabbit hole of addiction and financial ruin. A small upside, a huge potential downside.
It's an approach he then goes on to apply to many areas of life; take opportunities that could lead to a moonshot success, shun those that could lead to a pit of doom. Maximise the potential for unlimited success, take out the possibility of bad luck attacking you.
It's in embracing the instability, making the most of good instability, and making realistic plans to avoid bad instability, that you can find opportunities for yourself.
On the list of areas where it's worth spending a little for the potential to get a lot, Meadows includes reading.
He points out that for $10 you can get a book that may be terrible, and that you stop reading it. Or you could find one that puts ideas in front of you that you'd never considered before, leading to a 'viewquake'.
His book certainly has the potential to be the latter, for many people.
You can get a copy of Optionality here.
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