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Always Protect The Downside - Darius Foroux

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Always Protect The Downside - Darius Foroux
What's a big goal or dream that you have? Do you want to start a business? Become a fulltime author? Travel the world? Become financially independent? Change careers? I bet you've thought about it, and at some point thought, "I'm not sure I can achieve that."

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We Are Put Off By Fear

We always think about the risks involved in making a big chance in life. We consider the risks and then decide not to do it. But, the risks shouldn't scare us into inaction.

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Make old Moves

You can't achieve anything if you lock yourself up in your home. To live life to the fullest, you need to make bold moves. And this doesn't necessarily imply risk-taking.

Try to limit your po...

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Richard Branson

“It is only by being bold that you get anywhere. If you are a risk-taker, then the art is to protect the downside.”

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Career Decisions

Your most valuable resource is time. Yet, most spend their time working on other people's goals.

Use your time wisely by daily improving your skills, learning new things and building relation...

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Business Decisions

If you're in business, consider serving more than one group of customers, or focus on more than one industry.

When sales don't perform well in one area, you always have another option.

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Investing Decisions

Invest in something that has an underlying value.

Limit your potential losses by diversifying. For instance, invest in an index fund, real estate, and business.

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Avoid Taking A Big Hit

The purpose of protecting the downside is to prevent losing everything. You shouldn't put all your life energy into a single thing. This is true for your personal life too.

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  2. Have An Emergency Fu...

Benjamin Graham - Warren Buffett’s mentor

Benjamin Graham - Warren Buffett’s mentor

“Money isn’t making that much difference in how you and I live. We’re both going down to the cafeteria for lunch and working every day and having a good time. So don’t worry about money, because it won’t make much difference in how you live.”

Investing

... is the trading of your money today for a lot more money in the future. It is a high yield over the long term.

What happens to your money

Banks don’t like to give away their money. That mindset is reflected in the interest rates of checking and savings accounts of 0,5% and 0.9% avg. annual interest respectively.

When you deposit your money in the bank, the bank turns around and invests that money at 7% a year or more. After they collect their profit, they give a tiny shaving of it to you.

Portfolio and Diversification

  • Your portfolio reflects your long-term wealth building investment strategy – not the short term. It includes everything you own. Your retirement accounts, your investment accounts, even your home are types of investments.
  • Diversification is a way to describe owning multiple types of investment assets. Diversification is smart because you both protect yourself from failure and position yourself to take advantage of multiple robust methods for building wealth.

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Extrapolating our thoughts

A few examples of how we extrapolate our exceptions all the time:

  • “House prices will probably keep increasing.”
  • “That person will never change.”
  • “My busi...

We’re fast thinkers

But that doesn’t mean we should follow through on every single thought that pops into our mind.

Every time you start thinking about future events or start making mental movies, keep count on a post-it note or a small piece of paper. Be aware of your thoughts. But don’t follow through.

Ryan Holiday

Ryan Holiday

“It takes skill and discipline to bat away the pests of bad perceptions, to separate reliable signals from deceptive ones, to filter out prejudice, expectation, and fear.”

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