Contents
- 1. Treat Difficulties as Opportunities for Growth
- 2. «Don’t put all your eggs in one basket»
- 3. Distribute investments according to the degree of risk
- 4. Provide yourself with a wealth of choice
- 5. Learn by doing
- 6. Trust the feeling of boredom
- 7. Remember that «not losing» is more important than «gaining»
- 8. Remember that the old and proven is more reliable than the new.
No matter how much we want stability and confidence in the future, life always remains unpredictable to one degree or another. Crises are inevitable, the only question is how they affect us. How can we protect ourselves from negative consequences? Here are 8 ways.
American financier and mathematician Nassim Taleb studies crises, unpredictability and instability. At one time, he predicted the financial crisis of 2008 a few years before its onset.
Taleb introduced a new term — antifragility. This is a property of systems that, under the influence of stress, pressure, chaos, not only do not weaken, but, on the contrary, become stronger. The simplest example of an anti-fragile system is our muscles, which grow and become stronger under constant stress.
How to make your life antifragile? Here are some tips from Nassim Taleb.
1. Treat Difficulties as Opportunities for Growth
Every difficulty and challenge is a mini-stress that helps us stay strong and gives us room to grow. The main thing is to find the right balance: stress should not be too strong (otherwise it can harm us), nor too weak (then it will not give us the opportunity to develop). «Optimal» stress can be compared to hardening or grafting.
Take action! Choose a difficult training program for yourself, read difficult books, get out of your comfort zone. All this will force you to constantly make efforts and develop — both mentally and physically.
2. «Don’t put all your eggs in one basket»
The key to antifragility is the distribution of your resources and investments. For example, if you have only one source of income (the main job), if you lose it, you can lose everything. If you are self-employed, either self-employed or running a business, over time you will probably have at least a few clients and losing one of them will not be a disaster.
3. Distribute investments according to the degree of risk
The financiers have the concept of «barbell strategy». Following this method, we distribute resources, for example, money, something like this: 90% is invested as reliably as possible (albeit with a small return), and the remaining 10% is used for risky investments, which with a small probability can give a huge profit. Often this is more profitable than investing all the funds with an «average» degree of risk — because the «average» risk is much more difficult to correctly assess.
The “barbell strategy” is useful not only when compiling an investment portfolio. Here is how it can be applied in different areas of life:
Allocate 90% of your working time to your main job, and devote 10% to your business, which can become the basis of a successful business in the future.
Spend 90% of your free time with family and friends, and take 10% to expand your circle of friends — attend completely new events and «parties» for you. There you will have a chance to meet new people, find friends, business partners or meet your love.
4. Provide yourself with a wealth of choice
How? For example, by learning skills that are especially in demand in the labor market or by accumulating a large customer base. Antifragility is directly related to the number of potential choices. According to Nassim Taleb, the larger your space of choice, the less often you will need to look for complex and non-standard solutions. It will be enough not to make major mistakes and be able to see the obvious benefits.
5. Learn by doing
We learn best through action and personal experience so we can see at a glance what works and what doesn’t. An example from the history of technology: the first jet engines were created through trial and error. There was no full-fledged theory describing their work yet; it was developed later, in hindsight.
Nassim Taleb argues that successful people in practice are often poorly versed in theories, while good theorists, on the contrary, are often helpless in the practical application of their theories.
From the point of view of antifragility, you should not try to plan and foresee everything in advance, because plans often do not withstand a collision with reality. Therefore, it is often better to just start acting, “fill the bumps” and learn in the process.
Use trial and error, trying as many options as you can, quickly cutting off the ones that don’t work, and focusing on what works best. Expand your horizons: read different books, communicate with different people, attend various events, try unusual hobbies, test investment strategies that are unusual for you.
6. Trust the feeling of boredom
The feeling of boredom is a tool with which our brain gives us a signal that we are busy with something that is not right. Nassim Taleb says that at school he really did not like to read, but soon discovered that it was not reading as such that was unpleasant to him, but the lack of freedom of choice. As soon as he began to choose in the library what was interesting to him, and not what was asked in the literature lesson, his attitude towards books immediately changed.
7. Remember that «not losing» is more important than «gaining»
The famous investor and multibillionaire Warren Buffett said that he is guided in life by two rules:
Never lose money
Never Forget Rule #1
As Buffett’s business partner Charlie Munger says: «It’s remarkable how much more profitable it is in the long run to try not to do stupid things instead of trying to be very smart.»
Coming up with a brilliant strategy or making a breakthrough is very difficult, but avoiding stupidity and mistakes is much easier. Clear your life of everything superfluous: get rid of «toxic» acquaintances, stop eating junk food, stop smoking. Avoid unnecessary risk in business.
Yes, you may not achieve incredible success, but you will not fail either. If you can avoid big mistakes, the effect of your good decisions will gradually accumulate and lead you to success.
8. Remember that the old and proven is more reliable than the new.
As a general rule, we can trust what has stood the test of time. If a book has been regularly reprinted for 40-50 years, it is most likely worth reading. Time is merciless to everything fragile, and everything antifragile, on the contrary, only becomes stronger with time.
The same principle applies, for example, in diet — foods that have been eaten for centuries (vegetables, fruits, meat) are usually healthier than modern food full of artificial additives.