> This doesn’t mean anything to me. Can you elaborate?
Taleb elaborates better in his very accessible book(s). The basic idea is to invest/use most of your net worth in “safe” investments, those primarily keeping up with inflation or just barely beating it. If shit hits the fan, you have a cushion to fall back on.
Anything beyond keeping you safe and comfortable enough should go chasing the highest returns possible. So you can partake in as much upside as possible.
Startup comp follows this logic. Enough salary to fund your life and basic savings, equity to chase high upside.
Revenue generating assets are nice because you don’t just need to sell for a higher price to make a return. They have intrinsic value. For example owning a profitable business or a rental property.
Can you recommend a specific book that discusses this in the context of private investors? I have read a couple of books from Taleb and he only talks about similar strategies for investment firms.
Taleb elaborates better in his very accessible book(s). The basic idea is to invest/use most of your net worth in “safe” investments, those primarily keeping up with inflation or just barely beating it. If shit hits the fan, you have a cushion to fall back on.
Anything beyond keeping you safe and comfortable enough should go chasing the highest returns possible. So you can partake in as much upside as possible.
Startup comp follows this logic. Enough salary to fund your life and basic savings, equity to chase high upside.
Revenue generating assets are nice because you don’t just need to sell for a higher price to make a return. They have intrinsic value. For example owning a profitable business or a rental property.