Outcomes are probabilistic in the existence spaces. Not necessarily predictable.
We might as be “fooled by randomness”.
Hence, heroes are heroes in actions, not in results. We this should only focus on the inputs & be detached from the outputs, emotionally & otherwise.
While working to earn money, focus on probabilistic outcomes & give proportional efforts towards various input actions in proportion to the expectation value of the probabilistic outcomes. Simple. Always make sure to realise the inversion & always avoid going broke. (Keep a large margin of safety from going broke. Eg: Years worth of expenses in FD etc. Do not risk the money close to ones heart. Do not borrow and live on borrowed money. Let compounding work in your favour as opposed to against). Play practically long term infinite compounding games as opposed to short term dissipative games & focus only on inputs and be completely detached from outputs. Realising that wealth creation is an infinite game puts us at ease & makes us compete with our own selves as opposed to the competitors. We care about outdoing ourselves & we are our only competition.
In investment philosophy, we should always keep room for the possibility of failure & hence never keep all our eggs in one single basket. At the same time, with the right opportunity comes along, we ought not to suck on our thumb. Till the right opportunity comes along, just hold cash.
‘If you are playing with higher risk, it ought to be with non essential money. ‘
General rule of thumb: FD funds for min 1 year at age 30, min 2 years at age 35, min 3 years at age 40, and so on.
After that:
25% long term bonds, real estate, FD, Index Funds (Safe Investments to lay good foundations) or cash. (Cash represents further investment opportunities). No matter how much you like a stock, never go all in on it because other investment opportunities may come along, hence, you need to hold at least 25% cash or cash equivalents.
25% in Public Equity
25% in ones own business venture(s)
25% in other Private Equity.