Limit Your Downside

Gotta stay in the game to win it

Risk tolerance is overrated w/r/t success.

Any random idiot can take a risk. It’s the easiest thing in the world.

Go to your nearest casino and you’ll see tons of random boomers gambling away their social security checks. Their risk tolerance is through the roof. Is it helping them get anywhere worth going in life?

It’s not the ability to take risks that you need to hone. It’s the ability to properly manage them.

Tons of people go balls to the wall in the wifi money game. They sometimes have a decent run where it works in their favor, but inevitably they get wiped out once the gods of fate turn against them (as they inevitably turn on us all).

If you want to avoid getting completely knocked on your ass, you need to be constantly thinking about how to limit your downside.

There’s a Warren Buffet boomerism that feels relevant: “It's much easier to stay out of trouble now than to get out of trouble later.”

The most obvious way to limit your downside risk is by keeping a decent amount of cash in the bank.

Wifi money is volatile as hell. You can have your best month ever where you feel like a god walking among men and then one month later feel like the biggest loser on the planet as you experience your worst month in history.

It happens all the time.

Most people would tell you to ‘double down’ and invest all your extra cash so you can ‘keep the momentum going’. Their thought process can be summed up with the cliche: “if you’re not growing, you’re dying.”

Bullshit.

The best way to not die is to not die.

Obviously you have to spend and invest some portion of your money, but you don’t have to go for broke. Don’t base your business (or life) decisions off of what sounds cool on X dot com.

I’ve commented many times on the value of cultivating Retard Energy. Sometimes you really do have to be dumb enough to just put your head down and keep ramming it against the wall until you break through.

SOMETIMES.

But other times you need to use your head as something other than a battering ram. You’re a human being, not a caribou or rhinoceros or other head-bashing type of animal. You have millions of neurons in your skull. Put them to work.

That also means diversifying.

You need multiple websites. Multiple business models. Multiple traffic streams (SEO, YouTube, Reddit, Social Media, Email).

Wifi money is an inherently risky game. No need to make it even more risky by betting it all on one website with one monetization method and one revenue stream.

The people who bet it all on affiliate content sites and organic SEO were completely decimated by the Helpful Content Update. If they would have built up their YouTube, email, and social media they wouldn’t have gone to zero. But few bothered to do this because the organic SEO gravy train was so lucrative (and so easy).

It doesn’t matter how trendy your business is today or how much money it makes. A simple algo update can wipe it all out (remember that Google isn’t the only algorithm you need to worry about).

Right now Reddit is trending. People are banking by building their own subreddits, but most aren’t mitigating their risk.

They aren’t mitigating their risk within the platform (building up multiple accounts using multiple virtual machines and different IPs, not posting affilite links with their moderator account, not building multiple subreddits, etc.).

But they also aren’t mitigating the risk that the entire strategy will stop working one day. To be honest, this isn’t really a risk. It’s a guarantee. Reddit WILL eventually figure out how to shut down all affiliate content. It might take years, but they will do it. Right now Reddit gets traffic because everyone trusts their platform. But if the spam problem gets too bad, their userbase will flee.

So what are you doing with your free Reddit traffic? Are you sending social signals to your site? Are you sending subscribers to your YouTube channel? Are you getting them to sign up for your email list?

I already know the answer is no. So why aren’t you?

Talking about risk mitigation and limiting your downside doesn’t make you sound like a cool ‘alpha male’ on X.

But it’s what separates the people who stay in the game and consistently win, year in and year out, from the people who flame out after a brief burst of success (if they even achieve that).

You have to decide what’s more important to you: making money or chasing dopamine highs and sounding cool.

If it’s the latter: trust me, there are much cooler ways to get hits of dopamine. Starting an online business is about as lame as it gets.

But if you want money, you need to get serious and focus on the less glamorous ‘not dying’ part of business instead of just spamming moonshots.

It’s the only way.