Risk

Take more risk.

When you take risk that’s paired with leverage (I’ll explain in a sec), you have a huge possible upside and a comparably low possible downside.

There’s a thing called loss aversion. Essentially we feel loss more intensely compared to a win of the same size.

Losing $5 feels more bad than finding $5 feels good.

Loss aversion is amazing in terms of evolution.

It’s better not to go into a forest at night because you might not come back.

So we evolved to feel a potential downside more intensely.

But in a modern world there’s rarely “real” risk.

There are no hungry lions walking in the streets trying to eat you.

So the downside of “risky” things like learning a new skill, starting a business, creating your first YouTube video, etc., compared to the upside, is essentially zero.

The worst outcomes aren’t even that bad if you really think about it.

Even if the worst possible thing happens, you might have to:

• Reduce your spending for a while

• Move back in with your parents

• Hear people say bad stuff about what you’re doing ←this is actually a massive win because it lets you filter out who you should stop talking to.

• And that’s kind of it….

But the potential upside is huge. Especially with leverage.

This is from Naval Ravikant:

There are 4 types of leverage:

1. Code → You write code and millions of people can use it.

2. Media → You create media and millions of people can see it.

3. Labor → You buy other people’s time and multiply your output that way.

4. Capital → You invest money.

For code and media leverage, you don’t have to ask anyone’s permission.

With labor and capital, you need to ask someone to work for you, and you need to have money to invest.

But you can write code or create media from your bedroom with a computer and an internet connection.

So taking risk where there are the first two types of leverage is (1) free, and (2) it comes with essentially no downside compared to the possible upside.

Leverage multiplies good decisions.

The better decisions you make while creating media or writing code, the more it multiplies the result.

Make a mediocre video. Maybe 100 people will see it.

Make a good video. Maybe 10,000 people will see it.

But make a killer video. And 1,000,000 people will see it.

And making a killer video might require the same amount of time as making a mediocre video.

So through the power of the internet, your ideas can spread everywhere instantaneously. As long as they’re good.

And how do you get good ideas?

By taking risk.

Trying things that could fail.

If they do fail, tweaking something each time.

Until you run out of bad ideas and find a good one.

To summarize, good decisions paired with leverage are what you want.

To make good decisions, you have to take risk and try things that might not work.

In today’s world there’s very little downside to taking risk.

So take more risk.

Learn something new.

Pursue your curiosity.

Thanks for reading 👋.

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