Reflections on Investment, Success, and Happiness: Consider Long-term Gains Rather than Short-term Stimuli

Author: ROUTE 2 FI

Compiled by: Deep Tide TechFlow

This is one of the posts that I personally think is well-written, a series of thoughts on investment, success, and a happy life.

But first, how has your week been? Are you okay after last week's brutal Monday crash?

I've talked to many people, and surprisingly, many have been hit hard.

A big problem many cryptocurrency investors face is that they unconsciously use the Martingale strategy, believing it will ultimately lead them to victory.

You buy in when the price drops, then the price drops again, so you increase your investment, the price drops again, and oh my, the price drops again, and you put in your last bit of money. To your surprise, the price drops again, and despite your low leverage (3-5x), you could be completely liquidated.

Ethereum ($ETH) dropped 17% in 4 minutes last Monday, a week ago.

Now, calculate what would happen if you used 5x leverage on this position.

Linear Thinking vs. Exponential Thinking

If you invest x hours, you can earn y money and produce z products/services.

At least most people think this way. Their thinking is linear.

But is this way of thinking really correct?

If you apply leverage and time, you can achieve compound interest, and the results you generate will accumulate on top of what you already have.

If you calculate 10 + 10 + 10 + 10 + 10 + 10 + 10 + 10 + 10, it's easy to see that the sum is 90.

But if I ask you to calculate the 10% interest rate on an investment over 40 years, most people would think they just need to add 10% forty times to get 400%.

But the answer is not 400%.

The answer is: 4,525%.

This means that a $100,000 investment becomes $4,525,000 after 40 years.

The principle of compound interest is shown above. I don't intend to delve into it; I just want to show an example of exponential thinking.

Applying Leverage in Life

Most people have a too pragmatic view of life; they cannot see how leverage can shift you from a linear path to an exponential path.

Leverage comes in many forms, such as capital, technology, branding, network effects, and managing human resources.

Utilize these leverages to help you transcend linear thinking. You should take risks in life and choose a career that can apply leverage and compound interest. A typical 9 to 5 job without equity compensation has very limited upward mobility.

Instead, try starting your own business or joining someone who has already started one, looking for a role that is flexible in career development and equity compensation, and can apply the skills you learn to other fields or future ventures.

In modern society, I can't think of a better way to fully utilize leverage than building your personal brand. I've done it myself, and when I look back at my journey, it's amazing what I've created.

People read my thoughts because I am the one writing them. You want to learn about investing, cryptocurrency, and the latest opportunities from someone with practical experience, not from your college professor.

Apply leverage in everything, start thinking in terms of years, and how your knowledge, skills, and mindset can compound due to exponential growth. Think bigger. Those who believe they can change the world will eventually do so.

On Taking Risks and Making Asymmetric Investments

I believe that as long as basic needs are met, one should dare to take big risks. I like the FIRE mindset (Financial Independence, Retire Early. The amount needed to achieve financial independence = monthly expenses x 12 months x 25).

The premise of this rule is that the portfolio has an average annual growth rate of 10%. In this case, withdrawing 4% will not affect your principal, meaning your investment can still grow. (Assuming an annual growth rate of 10%).

However, if you are young and have few obligations and expenses, taking risks makes sense.

Ask yourself, what is the worst-case scenario? Usually, the worst outcome is going back to where you started. On the other hand, if you take risks, you might multiply your existing assets by ten (this applies not only to money but also to skills and opportunities).

Pursue asymmetric investments (see my tweet example below):

Route 2 FI: Asymmetric upside refers to situations where potential gains far exceed risks.

For example:

• Cryptocurrency investments

• Investing in early-stage startups

• Starting an online business

• Content creation

• Dating

• Moving to a new city

• Networking with smart people

Asymmetric upside investments mean that if you win, the returns can be 10-100 times, but if you lose, the losses are minimal.

Stay away from investments where the gains are small if you are right, but the risks are large if you are wrong.

This is illustrated below.

Prioritize long-term gains (years/decades) over short-term gains (the comfort of a monthly salary). Of course, survival is important.

The problem is that many people feel quite comfortable in their jobs, so the risk of trying something with greater potential becomes increasingly unattractive as their salaries keep increasing.

The opportunity cost seems to be getting higher. However, the fact is that almost everyone (at least in Western countries) can return to their current job or a similar one with the same salary after trying new opportunities and failing.

How Universal Basic Income Stimulates Entrepreneurship

By breaking free from the shackles of hedonism, you can focus on your true passions or life missions. I read Rutger Bregman's book "Utopia for Realists," where he mentions that Universal Basic Income (UBI) will stimulate entrepreneurship and creative growth in society.

The reason is quite simple. Suppose everyone receives $3,000 deposited into their bank accounts each month. Assume this is enough to sustain life, so you don't need to work extra to support your income.

Universal Basic Income would provide security for entrepreneurs. In places where UBI has been implemented, the entrepreneurship rate has increased by 301%. Data shows that in one state, for every 1% increase in the entrepreneurship rate, the poverty rate decreases by 2%.

One objection to Universal Basic Income is that many people will become lazy, depressed, and do nothing. While this may be true, I believe most people will try to pursue some passion.

Whether it's becoming an expert in video games or TV shows, or starting a company, I believe UBI will ultimately have a positive effect and lead to more innovation than we see today.

What Do You Really Want?

You may have heard the saying:

"Give me six hours to chop down a tree, and I will spend the first four sharpening the axe."

I mention this saying because I think it is very important when making significant decisions and choosing a job.

If you are thinking about what work to focus on or what to prioritize in the coming year, spending a few days seriously crafting a feasible plan is far better than just going with the flow immediately.

"Excuse me, which way should I go from here?"

"That depends a great deal on where you want to go," said the Cat.

"I don't much care where—" said Alice.

"Then it doesn't matter which way you go," said the Cat. ------ Lewis Carroll

As said in "Alice in Wonderland," if you don't know where you want to go, it doesn't matter which direction you take.

The key is to spend more time thinking about what you truly want to do. Most people could create beautiful things if they just believed in themselves.

In today's social media society, it's very evident to watch short videos and TikTok trends about how to improve life, but very few actually take action. They watch the videos but end up doing nothing. You might feel productive, but it’s really no different from binge-watching a TV series; it’s just a short-term dopamine hit.

Ask yourself if you are doing anything that contributes to long-term growth, or if all your activities are based on short-term pleasures (food, sex, exercise, feel-good videos/music, dating, gaming, drugs, alcohol).

While there is nothing wrong with doing these activities, don't let your life revolve entirely around them. After all, you are not a monkey. You can delay gratification (think of the marshmallow experiment), but monkeys cannot.

Examples of long-term activities (that bring long-term happiness):

• Learning a language

• Starting a company/small business

• Completing a marathon

• Earning a degree

• Living abroad

• Writing a book

• Learning skills that could change your career

• Investing

• Losing weight

• Building a personal brand

Why Being Exceptional in a Field is Extremely Beneficial

Another factor is that finding your ultimate goal is very rewarding. When I worked 50-60 hours a week at a company, I hated the daily grind, initially thinking it was because of the long hours.

But that wasn't the case. What I hated was not doing work that impacted my life. Nowadays, every hour I invest in Route2FI (yes, it's just me) ultimately brings some return. While it may not always be the case, the gains and losses are all mine.

This motivates me greatly to do good work because only I can make this story successful. If I don't show up, my momentum will stall.

Think about it carefully; becoming one of the top 10% in a field is not difficult. You just need to invest a lot of time (work hard). But if you want to be in the top 1-2%, then you also have to work smart.

This is where I need to improve. Sometimes I wonder how much I could elevate my work if I outsourced more or completely stopped writing tweets or press releases.

However, I really enjoy the process. At this point, I'm not trying to squeeze the most money from the market or collaboration opportunities. I do it because it brings me satisfaction. I write these words now because I find joy in it. Writing is something I will always do and something I don't want to outsource.

Life is long, so bravely pursue what you want. Don't settle for less. This applies to your career, partners, and friends. If you want to be lucky in life, you need to be prepared for luck to come. Interestingly, luck often finds you when you are working hard.

Take a moment to think about this question:

"What do I want in life?"

You might answer with something you don't have or something missing today. But let me ask you this question.

How much effort have you put into getting what you want? How many hours have you invested? Do you want to create a successful TikTok brand but haven't started because you think the market is too saturated?

Most people postpone starting or don't start anything at all because they haven't set small goals. They only think about the end goal and conclude that they can't reach it without trying.

Acquiring Specific Knowledge

Naval says you need specific knowledge. Specific knowledge is knowledge that only you possess. The simplest way to create it is to build a personal brand. As I mentioned earlier, people read my thoughts because I am the one writing them.

We could send this text to an unknown Twitter account, and it wouldn't get many views. This is not because the text isn't good enough, but because they have no followers. However, if you repeat this exercise (posting year after year), the right audience will find you.

This is where I excel—consistency. I know I'm not the best writer. If I spent more time editing, creating better graphics, and getting feedback from people before posting, my writing would be better. But rather than pursuing perfection, I prefer to publish at 80-90% quality.

For me, this is the only way to get things done. Over time, I am quite satisfied with it. I am proud of the more than 100 articles I have reviewed. If I were too focused on perfection, perhaps I would only complete 25% of the quantity.

Acquire specific knowledge. Be brave in expressing unique opinions. Some people will appreciate your unique style. Define yourself by your strengths rather than your weaknesses. Imagine how outstanding you would be if you only focused on your strengths.

You can become the top 1% in a field. Instead of trying to raise your sales skills from 45% to 50% (just a random example, becoming the best should focus on what you are naturally good at).

Make sure you have enough money to make decisions based on what you truly want to do, rather than making decisions out of a lack of money. Because in my view, the best thing is when you have intrinsic motivation to do something. Yes, you can have high intrinsic motivation in a regular job, but if the employer stops paying, most people will quit.

A good question is: What would I do if money were no object?

You can check out the video by Alan Watts below.

This deeply inspired me ten years ago:

It's hard to do well at a job you don't care about.

Moreover, having a job you don't like makes it difficult to be fully satisfied with life. Strive to be the best at what you do. Be a little brave and take some risks in life, especially early in your career or in your twenties.

Work hard to associate with those who are the best in their fields (for me, I’ve met these people on Twitter and have been glad to meet many in real life).

From this perspective, the likelihood that your friends have a genuine interest in a specific topic compared to yourself is quite low, but on Twitter, there are thousands of people exploring the same field as deeply as you are.

Find them and make them your friends. Trust me, it will be worth it.