Playing It Safe vs Taking Big Risks - My Approach to Tesla Investing and 10x Gains (Ep. 38)

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Should you take more risk? Or should you diversify more?
It’s an age-old question and in this video I’d like to share some fresh thoughts on this topic.

Here’s a question from Chris Guthrie:
“Dave, I've watched nearly every single one of your videos. I've been long TSLA since late 2016 and early 2017. What I want to know is how you pay your monthly bills today? Do you have lower risk cash flowing investments that cover your cost of living and then use other wealth to invest in companies like TSLA?

What I'd like to do is further build out more passive investments to cover my monthly expenses so I can pour any amount of excess capital for larger bets either on a potential 10x investment or in one of my own business ideas. Right now my monthly expenses are covered by a few online businesses but the cash flow from these businesses isn't as guaranteed for the long term as something like a combination of assets like municipal bonds, REITs, a dividend income ETF, etc.“

Bigger question is how I personally view risk and diversification.

I think there are two different needs and goals.

First need/goal is to cover your current and future living expenses
Typical is a shrinking retirement fund concept.
Atypical is a growing retirement fund concept.

So how do you get enough assets to have a growing retirement fund?
How much assets do you need for a growing retirement fund?

My preferred approach to investing is to get to the place where my current and future living expenses are covered with safe assets.
Then, use the rest of my assets/income/etc to invest to the max potential of investing that’s possible. With these investments I’m looking for outsized gains for low-moderate risk.

The second goal is why invest if living expenses already covered? In other words, why focus on preservation beyond a certain point?

This answer is personal but I look into some deeper reasons on what benefits investing can bring in the bigger picture.

I’m a big fan of the power to start new businesses, even if it’s a small start. I’d love to cover this more in future videos.

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Disclaimer: All content on this channel is for informational and educational purposes only and should not be construed as professional financial advice. Should you need such advice, consult a licensed financial or tax advisor. No guarantee is given regarding the accuracy of information on this channel. Author is long TSLA at time of original video publish date.

Tags: Tesla, Elon Musk, Model 3, Model Y, Cybertruck, Investing, China, TSLA Shorts

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