<div class="bbWrapper">Awesome thread! Even though it's way over my head. It sounds like you've developed some keen insights due to the amount of thought and effort you've put into this topic. <br />
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Random question out of curiosity - how did you happen to start on Beta before Alpha? I'm guessing it's just semantics of how you chose to label your approaches, but it intrigued me. <br />
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Random question that's a little less tangential - Let's imagine I'm a total beginner and have no clue where to pick up even the basics of understanding this area, so I'm hesitant to start to invest because my understanding is so severely lacking. What resources would you recommend as a good place to start learning? <br />
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I had to google what Cliffs notes are. So, the short answer is no.<br />
However, if there are enough people demanding, I'd happy to invest the time to look into it further. <img src="/community/imgs/emoticons/em-smile2.png" class="smilie" loading="lazy" alt=":)" title="Smile :)" data-shortname=":)" />
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</blockquote>Haha I think it's fair to say that the original post WAS the cliffnotes version. Did anybody SEE the whiteboard photos? Obviously, there's a ton of depth implied in the summary of the 7 stages you passed through on the way to where you are now.<br />
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<blockquote data-attributes="member: 87540" data-quote="thewalkingtemple" data-source="post: 911127"
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I'm no genius mate; just another guy giving life his best. You are confused because what I have posted is not a how to guide. That's my mistake; I should have made that clear in the post. I've just tried to introduce what I consider as valuable concepts. Those need to be learnt. Depending upon someone's level, it could take a few months or a year or two. But anyone can get there.<br />
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Let me give you a fictional example (which I randomly came up with as I typed <img src="/community/imgs/emoticons/em-smile2.png" class="smilie" loading="lazy" alt=":)" title="Smile :)" data-shortname=":)" /> ) of the kind of thinking I'm talking about.<br />
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Let's say you have four neighbours:<br />
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a. Luca, who is a wheat farmer.<br />
b. Sarah, who is an insurance provider.<br />
c. Tom, who runs a bakery.<br />
d. Rusty, who is just a wealthy floater.<br />
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Before you arrived, Tom used to buy wheat from Luca for his bakery. Rusty didn't give a f*ck about anything or anyone, whereas Sarah was selling random insurance coverages to all three.<br />
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You now arrive into the scene with your fancy cash. You have enough to buy three seasons' produce from Luca. You go to Luca first, and negotiate with him to purchase his produce exclusively and continuously for the next 3 years at a fixed rate. Luca agrees to it as soon as you promise him that you are willing to pay one half of the capital up-front.<br />
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You then go to Sarah and tell her that in case there is a poor harvest (pre-defined using a threshold number), you would like to cover your losses using a custom insurance package. You start working on a deal and come up with Y as the price of the insurance package.<br />
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You then go to Tom, and offer wheat for a fixed price for the next three years at a standard rate (with a profit mark-up). This price is 10 cents higher than what Luca offered it for (this ensures you a 130% profit during the first year, and 150% profit during year 2 and year 3, provided the minimum harvest target is met). So Tom is skeptical. But you question whether Luca had kept the same rate over a three year period. Tom realises that it was not the case, understands the benifit of a standard rate, and signs the deal. You setup Tom also with an insurance coverage with Sarah in case of a low produce year. You get brownie points from Sarah for helping with the deal.<br />
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You then go to Rusty, and offer a unique deal. You tell him that if your yield exceeds x (which is Tom's share), Rusty can have everything beyond it for his rich family. The only thing Rusty needs to pay is a small amount of Z per year (Z = your insurance cost owed to Sarah (y) + 0.5 of insurance cost owed by Tom to Sarah). Rusty is skeptical. But then you show him that 8 out of 10 times the last 10 years, your leased farm has produced much more than x, so Rusy is essentially making a favourable bet. Rusty finally agrees to buy the contract from you.<br />
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You then go back to Tom, and offer to pay one half of his insurance costs as sign of good will and continued business relationship for the future.<br />
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After one year Luca is happy and hard at work, Tom's business is doing reasonably well, and he is extremely thankful for your deal that enables him to sustain competitive prices, and Rusty is stocked with surplus produce you delivered. He treats you like you are his new best friend. You have made a handsome 130% profit on your intial investment. You now take 20% out of that and go back to Luca, and offer to pay for one half of his and his family's life insurance coverage costs (which starts to melt Sarah's heart). Luca is pleasantly surprised, and assures you of a long lasting continued business relationship. Sarah is so impressed with you, that she starts dating you (OMFG!!).<br />
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And they lived happily ever after.<br />
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Even though this was just a randomised story I made-up, there are some very fundamental concepts, and derivative instruments used intuitively without explaining what they are or how they work (i.e., the mathematics).
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</blockquote>OK, yes you are a genius, because not everyone can put together such a clear, understandable, relatable analogy on the spot like that. <br />
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"The definition of genius is taking the complex and making it simple." Albert Einstein<br />
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<blockquote data-attributes="member: 87540" data-quote="thewalkingtemple" data-source="post: 911485"
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Thank you. But I wouldn't be focussing on those numbers. To put things into perspective, ever since I launched my system 5 months ago, I've made enough to pay for just 4 months of my living expenses in a year. And ALL of it is unrealised, because I don't need any money at the moment. This means that the numbers paint a much better picture than what I actually get in the end.<br />
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The numbers are based on low cap input. Like I mentioned in the OP, the bigger the capital, the tougher (non-linearly) it is. I'm like a kid who's learning to drift a buggy. It's difficult, but I'm able to pull it off somehow. But with bigger cap, it's like powersliding a space ship.<br />
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Today morning, as I was running, I was trying to process Kevin's POV here. And a mathematical thought struck me. I thought I'd share that with you all.<br />
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If I were to write down Kevin's thought process as an equation, I would do so as follows:<br />
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<div style="text-align: center">0.9 U + 0.1 M 9 = 1 L ----------><b>(1)</b><br />
where, U = Unscripted Business system,<br />
M = Money System,<br />
L = The Unscripted Life, and<br />
the numbers 0.9 and 0.1 are risk weights.​</div><br />
Basically, Kevin's experience has led him to use a system where he swears by a low risk weightage (0.1) to the money system, and this doesn't require him to be dabbling into "financial alchemy". He is then comfortable with letting his unscripted business system do the heavy lifting of income (0.9).<br />
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I don't know about you all, but what inspired me the most about MJ Demarco is not what he achieved, but his orginial thinking clarity. That's what makes his work authentic and valuable to me (personally). So I infuse my own original thinking here. I start with generalising eq. <b>(1)</b><br />
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<div style="text-align: center">(R1 * U) + (R2 * M) = (1 * L) ----------><b>(2)</b><br />
where, R1 and R2 are generalised risk weights.<br />​</div>For a guy like me, who has a reasonably strong Money system, I can push R2 to much more than 0.1. Let's say I am okay with going upto 0.5. That means I can afford to work with a risk weightage of 0.5 for R1, meaning that I can go for safer bets with my business system (meaning lesser effort than, say, in comparison to Kevin) and achieve similar global results. My equation (just for illustration purposes) then becomes.<br />
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<div style="text-align: center">(0.5 U) + (0.5 M) = (1 L) ----------><b>(3)</b>​</div><br />
To proceed however, I have to acknowledge the following limitations of such a definition.<br />
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1. M cannot be sustained / exist without U. Therefore, M is a function of U, which makes the real equation more complicated than what I have presented above.<br />
2. The real relationship between the risk weights is likely non-linear.<br />
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With such a setup, I could even go as far as building a dynamic system where I can dynamically change R1 and R2, and de-correlate U and M to such an extent that one saves the other in a tight scenario.<br />
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I believe there is a lot of room for flexibilty in approaches than just the one Kevin has expressed. So much for just a thought experiment. Thank you for your post <a href="https://www.thefastlaneforum.com/community/members/64612/" class="username" data-xf-init="member-tooltip" data-user-id="64612" data-username="@Kevin88660">@Kevin88660</a> It was the source of inspiration for this little post <img src="/community/imgs/emoticons/em-smile2.png" class="smilie" loading="lazy" alt=":)" title="Smile :)" data-shortname=":)" /><br />
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EDIT: My <b>Dirty-Alpha</b> went live 5 months ago. The <b>Virgin-Beta</b> went live 3 months before that. So you could say that the whole system has been up for 8 months.
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</blockquote>This post reminded me of the following post that <a href="https://www.thefastlaneforum.com/community/members/1/" class="username" data-xf-init="member-tooltip" data-user-id="1" data-username="@MJ DeMarco">@MJ DeMarco</a> shared a while back post where he boils down his money making system into an equation. You two seem to be thinking along somewhat of the same wavelength. Love it! (I also echo ZF's recommendation that you'd enjoy the Insider post on selling options. Look for "The Printing Money Thread.") <br />
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GOLD! - MINDSET - How to create monetary wealth in just 5 years. (Or less!)
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<div class="contentRow-snippet js-unfurl-desc">Asked on Quora which I answered... https://www.quora.com/How-can-I-create-massive-monetary-success-in-five-years/answer/MJ-DeMarco-1 Create yourself a mathematical equation that scales, then work that equation to death while acting, assessing, and adjusting along the way. Few people...</div>
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