Play Asymmetric Games: Invest in Opportunities that Multiply

Linear games get linear results.

In order to win a linear game, you need to move the needle. You must increase your input for your output to change.

Earning money is a linear game. You need to work to earn every additional dollar.

Making money, however, is different.

When you start investing money, you open yourself up to asymmetry.

By investing, over time you can get out way more than you put in. A small amount of growth, repeated over years, ​compounds​ massively.

But that's just scratching the surface. The real secret is that wealth isn't just about the asymmetry of compounding interest, it's about compounding optionality.

Wealth-building operates more like a power law than a standard distribution. This is because financialization gives money the ability to self-propagate.

This means that regardless of your work ethic, the more money you have, the more money-making opportunities open up to you.

There are even laws preventing so-called ‘unsophisticated’ investors from investing in certain classes of deals, e.g. startup funding.

This is often referred to as The Matthew Principle, i.e. 'the rich get richer'.

But this doesn't just apply to money.

There are other things you can invest in at low cost, which appreciate over time, and also greatly multiply the number of options open to you, and the amount of harvest you can reap.

Shane Parrish recently reminded me that trust is one of them.

Operating with high trust has its own inherent benefits, e.g. strong relationships, but it also opens you up to asymmetry due to:

• the number of additional opportunities you would engage in, and;
• your likelihood of obtaining a positive outcome from situations where trust plays a large role.

Think about other areas in your life that have an asymmetric payoff instead of a linear one.

​Gratitude​ is one - people with a habit of being grateful find more things to be grateful about.

Health and fitness is probably another - the more fit you are, the more fit you can become. And there's massive asymmetry between the input (the amount of time you spend training) and the output (all the ways being healthier can affect your lifestyle, ​happiness​, and longevity).