My First Million
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Asymmetric Risk Portfolio Theory
An investment approach that takes multiple small bets where maximum loss is capped but upside is potentially unlimited
How It Works
Make investments where you can lose 1x but potentially gain 3-10x. Use debt financing to preserve equity while maintaining downside protection through asset backing
Components
Maintain core cash-flowing business as foundation
Use debt financing to preserve equity upside
Take multiple small bets rather than few large ones
Ensure each bet has tangible asset backing
Focus on businesses with known playbooks rather than pure innovation
When to Use
When you have stable cash flows from a core business and want to diversify without risking core operations
When Not to Use
When you lack stable base income or are betting everything on single outcomes
Anti-Patterns to Avoid
Example
“Buying $3.5M of land - worst case lose the investment but still own $3.5M of land. Best case develop it into $100M+ aviation community. The downside is capped, upside is massive”