Barbell strategy - an investment strategy that can leverage your life

Chinese people have always advocated the golden mean, a compromise and a harmonious way of doing things, so unknowingly, we also prefer egalitarianism in our lives, seeking stability and seeking nothing.

It is true to pursue stability, but there is more than just stability in life, because there are too many black swan events in life. If you only pursue stability, when the black swan comes, you will find that you are actually Very fragile and vulnerable. The stable state can easily be broken and get into trouble.

Therefore, we Chinese people especially like to save to deal with such emergencies. But have you discovered that this response strategy actually treats the symptoms rather than the root cause. Although it may alleviate the temporary crisis, it cannot fundamentally solve the problem. It’s like if you only know how to reduce expenditures but don’t understand how to increase revenue, no matter how hard you try, you still don’t have much left over.

In fact, what we really need is another mental model: the barbell strategy.

As the name suggests, the barbell strategy is like a barbell, with the weight completely concentrated on both ends. There are two extreme layouts. One extreme is to invest 90% of resources, energy, time, etc. in one end to ensure our stable state. The other extreme is to bet the remaining 10% on the other end, embrace uncertainty, and obtain huge or even unlimited returns. This 10% is your bargaining chip and capital to deal with the black swan event in your life, and start a completely different life for you.

Let’s talk specifically about the practical application and significance of the barbell strategy in life.

One end of the barbell is to maintain your stable state. For example, if you are a student, then you need to devote 90% of your energy to studying to ensure that the study proceeds normally, but you can go to 10% Develop your own hobbies, such as painting, running, music, etc. If suddenly one day, your hobbies are very powerful, such as winning a running award and being selected by the provincial sports team, then you will have opened up another kind of athlete. Life. For another example, if you are a 9-to-5 office worker, then 90% of your energy should be working hard to ensure a stable life, but the remaining 10% can be photography, writing, or making videos based on your own strengths and preferences. , even planting flowers and fish, etc. When this becomes more and more powerful and you can rely on this to support yourself and your family, you will start a new life style. Another example is investment and financial management. You can invest 10% of your funds in projects that are very risky, but the returns may also be very huge. Once the investment is successful, it can bring you huge returns, but if it fails, you will not be able to bear it. It won't affect your normal life, because 90% of you are still stable.

In fact, the barbell strategy is to obtain the maximum return at the lowest cost while ensuring stability. Sometimes, the other end even feels a little unintentional. It usually invests some small costs (time, energy, money, etc.), but slowly discovers that this end has endless potential. This is also the case for many people who start their entrepreneurial journey. It was just a scattered side job at first, but gradually it became bigger and bigger, and they really relied on this to start their own business. Some people’s daily interest is to take photos, cut videos and write public accounts. When their influence becomes larger and larger, their traffic increases, and they become UP owners, they can really be monetized.

So, if you want to open up another possibility in life, then on the premise of ensuring that one end of the barbell is stable, spend 10% of your energy to manage your life patiently, and continue to water the other end of the barbell. I hope that the seedlings will slowly grow into towering trees.