Strategies To Think About From Billionaires

Habits is what makes us. Habits can make you an intelligent investor or monk or anything; ut depends. This blog is about habits or lessons / strategies that one should have a look at least once. Whatever here I have wrote here is based on observation of their working & living style. Gonna point out few key lessons that I am trying to understand or you can say that lessons that I am looking for better future.

It’s not about obsession of becoming rich. It is more about having a view point of certain priciples & ideas of giants like Jeff Bezos, Warren Buffett, etc. In the next few minutes, I will encapsulate some key principles that these billionaires have used. And yeah, if you want to gather wealth — go & let your money compound!

1. Take Assymetric Risk

This point can be understand by taking example of Elon Musk. Musk got 180 $ million from PayPal & here is what he said~

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.

If people like you & me try to make sense out of this, we would call it as madness. But the thing is that people like Elon Musk takes such risk. This is how their mental model works. (kinda their philosophy) If I had 180 million dollars I would have never taken such risk. But here we have Elon Musk who reinvested this money into building new companies in which he divided into specifics. Such entire management of risk & investment is called Assymetric Risk.

In simpler words, Assymetric Risk means that you take very high risk & get very high rewards in certain parts of your life. If we look at life of billionaires, we will see that their entrepreneurial life began too early. With time, they become better risk takers. They continue to take risk little by little, aggregate confidence & results in building mindset of taking assymetric risk. This is why Elon Musk bets on new age investment methods. Same with Jeff Bezos & Bill Gates. But remember that, Risk is too high & rewards are too super high.

How to create such system? Well I am no expert. Only thing we need to understand is to try this at smaller level with confidence. All you can do is decrease this Assymetric Risk at smaller degree. (This is not an investment advice). A particular portion of investment can be contributed to risky asset. Similarly, extra work over weekends is too part of Assymetric Risk. Over the time, confidence is gained which pushes towards Assymetric Risk & it’s wonders. The things is that we are not having 180$ million. We can’t just go & start investing, because our risk appetite is not such.

Another perspective to look at is having plan B. Most of entrepreneurs out their have plan B or C. So if Elon’e investment went wrong, then he have plan B. Reason : He is confident, knows how to take risk & knew that he will come up with plan B.

2. Comfortable with Uncertainty

Just few lines ago, there is origin of this. If Elon loses it, he would have come up with new because he was comfortable with unfortunate part of risk. Elon was aware of bad luck. Take example of Steve Jobs. He dropped out of college because we wasn’t able to see worth in it. He was uncertain about what’s going to happen to me but the things is he was comfortable with uncertainty. Jobs was optimistic.

As a human, we have this thought which makes us think about worst case scenario. We are tend to be kind of pessimist. Reality is different. Nothing is as bad as it seems. In this modern era we have numerous options available around. So with optimistic approach & comfortable with uncertainty, surely good will result. Is being comfortable enough? Obviously No.

Critical Thinking is more important than being comfortable with uncertainty. Before doing any random thing, just look around you. Take decisions based on reality, not from society or from trend. Steps should make sense in long run. If it looks so, then think about taking extreme measures like dropping out of college because becoming Elon or Jobs is 1 in millionth outcome. 3rd important thing is Safety Net. One can’t just invest all of his savings. Their should a piece of money being fixed which can save you if things go wrong!

3. Be simple in your living

In order to get rich, you need to seek wealth (not status). If you look at range of people like Ratan Tata, Narayan Murty or any other American succesful, then you’ll realise that they aren’t flashy people. Show off is not what they do. Seeking wealth is their trait & they just stick to it. So clothing do matters. Sophisticated minds adopt simplified lifestyle.

Here come argument from people whose lives depend on influencer buisness of films or instagram. They too are correct on their position. But in large sense, when it comes to seeking wealth, simple lifestyle is what matters & affects.

4. Think Longterm

Look around you, inflation is happening. Hard times is coming. So what is correct was to handle this? Answer is maybe compounding your money by investing. Here is one of my favourite from Naval Ravikant ~

You’re not going to get rich renting out your time. You must own equity — a piece of buisness — to gain your financial freedom.

You have to go & play long term game with long term people. All the return in your life come via compounding.

So that’s it. I tried to explain what I could. What I think is that whether you follow such measures or not, you must have a look at their view point for better understanding. Again, whatever I wrote is not for investment advice, it’s just for knowledge purpose. If you like to add any aphorism or anything be open to comment. Thank for having me 🙋🏻‍♂️.