Van’s Note: Van Bryan here, Jeff Brown’s longtime managing editor. The Bleeding Edge brings readers all the latest on technology. But sometimes, we also share valuable investing advice from our friends and colleagues.
In today’s essay, Teeka Tiwari – a former hedge fund manager – describes the way he made his fortune… and then lost it all. In the process, he learned a lot about risk.
And now he uses the lessons he learned to help everyday folks position themselves for life-changing gains… without making the same mistakes he did.
And if you enjoy today’s essay and want to learn more about a new opportunity Teeka’s found… something he’s calling an “anomaly”… make sure to sign up for his upcoming presentation. There, he’ll tell attendees all about how he believes this opportunity will allow you to buy back 20 years of your life. Go here now to sign up for free.
By Teeka Tiwari, editor, Palm Beach Daily
I made my first big haul in the early 1990s, buying beaten-down junk bonds.
I was 19, and before the year was out, my junk bond play would make me over $250,000. That’s about half a million dollars in today’s money. The year before, I had made just $8,000.
That began a wild ride of moneymaking that had me making $54,000 in one day by the time I was 22.
When the mid-1990s rolled around, I was making money hand-over-fist in technology stocks. I was young and making a fortune while living my American Dream. I would love to tell you I embraced my success with calm and sober-minded maturity.
I didn’t. I let the money make me an arrogant jackass.
And by late 1998, I’d lost it all. You see, I made a terrible mistake…
Instead of taking small bets on high-risk, high-reward ideas, I was taking massive stakes.
By the time the 1997 Asian financial crisis rolled around, I’d built up a substantial portfolio. But I stuck around too long and got too greedy.
And when the market went against me, I made bigger and riskier bets. I lost all perspective and was investing for my ego, not my bank account.
Within three weeks, I lost everything I’d made and more. I went from wealthy to poor in less than a month. And ultimately, I was compelled to file for personal bankruptcy.
It was a stunning reversal. Here I was, the golden boy who finally got his comeuppance.
My American Dream turned into a nightmare. I lost my career, my wife, my family, my self-respect, and for a brief moment, I even lost my will to live. It was a dark time in my life.
There were many lessons, but my biggest investment lesson was I could not build all my investments solely on high-risk, high-reward plays. I had to create multiple streams of safe income, so I’d always have a pool of self-sustaining assets from which to build wealth.
Here’s how that helped me get rich again…
After my bankruptcy, I started rebuilding my net worth. I worked like the devil was on my back. I took every available penny and invested it into safe income-generating assets.
I then took the income generated from my safe investments and put it into well-researched high-risk, high-reward plays. This approach magnified my wealth very quickly. The best part was I was getting wealthier without putting my current lifestyle at risk.
It’s a strategy called asymmetric risk investing. Think of it this way: Symmetrical risk is where you bet $41 to make as much as $41 – at most, a 100% return… Asymmetric risk is where you bet $1 to make $100, $1,000, or even more.
This type of investing allows you to take a small amount of money and greatly amplify it.
And when you position-size correctly, the potential gain far outweighs the risk. A recent example of this is when I made $75,000 from a $700 investment back in 2017. Another investment of just $1,000 helped me make as much as $1.2 million.
Even though you’re only risking a small sum, the key lesson to remember is that you can’t build your whole portfolio on ideas like this… those types of investments can still go to zero from time to time.
That’s why I only make asymmetric bets with the income from my safe investments…
So if those risky asymmetric bets fail, 100% of that money gets replenished next year with the dividends and interest from my safe money. This is the key to getting really rich, really quick, without ever blowing yourself up…
To truly build long-lasting wealth, you need to generate multiple, reliable streams of income – then you can fund your higher-paying, riskier strategies without risking your financial health.
Here are the steps I recommend you take:
Focus on increasing your ability to earn more money by improving your work ethic and work skills.
Choose to live well below your means so you can save over 60% of your monthly income.
Put no more than 5% of your liquid net worth into asymmetric investments (if you’re 30 or younger, you can bump this up to as much as 20%).
Put the rest of your money into conservative, income-producing investments and strategies.
Reinvest a portion of your safe income back into well-researched asymmetric investments.
Repeat until you’re rich.
It may seem paradoxical. But the more “safe” income you build, the more “free” income you’ll have to speculate on high-risk, high-reward plays that can change your life right now… not 20 years from now.
It’s never too early or too late to begin building your wealth. The sands of time will continue to slip away, regardless of your actions.
So why not make the choice today to do something different… Put yourself on the road to happiness and security in 2021 and live the dream life you want for yourself and your family.
Let the Game Come to You!
Teeka Tiwari
Editor, Palm Beach Daily
P.S. I had to achieve the American Dream not once but twice. First, by coming to America. Second, by coming back from having lost everything.
I know millions of Americans are watching their American Dream get snatched away from them. That’s why on Wednesday, April 21, at 8 p.m. ET, I’m going to share my biggest secret to achieving your American Dream in as little as 42 days…
It involves a rare “anomaly window” when blue-chip stocks can deliver as much as 39 years’ worth of gains all within a 42-day window. It only happens once every few years. But when it does, all bets are off.
Inside this window, the rules to wealth-building change. They flip… and you can make more on boring, safe blue-chip stocks than you would normally make in nearly FOUR decades.
Plus, if you sign up right now, I’ll send you four bonus gifts. You can learn more right here…
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The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
