Safety Net Plus Betting
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A strategy for managing personal wealth by maintaining a fixed safety cushion while aggressively investing additional capital in new opportunities.
Core Safety Net Strategy
- Keep $1M as an absolute minimum safety cushion
- Everything above the safety net is "in play" for investments
- Maintain clear separation between safety net and investment capital
- Safety net provides psychological freedom to take bigger risks
Investment Philosophy
- Willing to bet large when strong conviction exists
- Example: Invested $200k of $236k savings into Facebook in 2007
- Held Facebook shares through massive growth, never sold
- Focus on identifying mispriced assets
- Attention is currently the most mispriced asset class
- Look for opportunities where conviction is extremely high
- Don't guess when you can test
- Testing is often cheaper than speculation
- Execute on possibilities rather than theorizing
Risk Management Approach
- Never go below established safety net amount
- Maintain capability to rebuild if needed
- Skills and reputation provide backup safety net
- Confidence in ability to start over reduces fear
- Consider both upside potential and downside protection
- Look for asymmetric opportunities
- Maintain optionality to pursue new ventures
Psychological Benefits
- Reduces fear of failure
- Enables aggressive pursuit of opportunities
- Creates comfort with potential setbacks
- Allows focus on long-term growth rather than preservation
- Provides peace of mind while taking calculated risks
Key Principles
- Don't need to bet everything to pursue opportunities
- Skills and capabilities serve as additional safety net
- Clear separation between safety and risk capital
- Conviction drives bet size above safety threshold
- Maintain ability to rebuild if necessary
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.