27 Mar A portfolio approach to $10k work
Have you been buying Bitcoin since the early days?
Did you ride the Gamestop wave to its highs?
Or do you remember epic collapse of Enron stock?
In every instance, the end result was a concentrated (or un-diversified) portfolio. Which can put you at tremendous risk. We can take the same approach to $10/hour and $10,000/hour work. How can we build a balanced portfolio of work? Let’s extend the analogy:
$10/hr work = cash. It’s liquid, moves quickly, “safe” and allows you to function on a daily basis.
$100/hr work = bonds. There’s a (tiny) bit of passive income that works while you sleep. But it’s not enough to move the needle in your life over the long term.
$1,000/hr work = stocks. This is a sweet spot. You get price appreciation AND dividends – particularly if you are able to play the long game. Owning stocks over decades will almost guarantee you grow your wealth. And we could stop here.
$10,000/hr work = crypto or angel investing. Here you have the potential for spectacular returns, tons of leverage, but at a high risk. You won’t know for years (possibly decades) if you were right. It could all go to zero. There’s a tremendous amount of path dependency, randomness and luck.
Two variables to guide your decision making
Now, like investing, consider two variables as you build your own portfolio: age and risk tolerance. You can quickly see the danger in owning the bookends (Cash only or Crypto only). Likewise, if you only did $10/hr work you’d be the “world’s best execution machine.” If you only did $10,000/hr work you’d be “a dreamer who can’t get anything done.”
As you advance in your career, you’ll build up the experience, credibility and cushion to do more $1,000 and $10k work. Conversely, a college grad will be mostly focused on execution and blocking and tackling. But regardless of your age and experience, it’s critical to sprinkle some $10k pixie dust into your daily activities. Even if it’s just 10 minutes.
After all, what’s the point if we don’t dream a little bit?