Generally, between 10% and 40% of a portfolio should be invested in interest income assets, depending on age, goals, circumstances, and risk tolerance. 10-40% may not be right for you. But that’s not really the point.
In recent years, I’ve looked at various combinations of different income producing investments. Most investors have a much broader understanding of the equity (OWN) opportunity set than they do of the debt (LOAN) opportunity set. In reality, there is a vast array of interest income alternatives.
I’ve attached a couple images to provide a general framework for the types of debt investments that many investors might consider.
Perpetual anxiety radiating from accounts that never quite rest. The timeline of the precariat never posts from abundance. Conscripted into a permanent state of hypervigilance without the compensating narrative of control. Every choice is high stakes in low margin conditions; very stressful.
The tonal residue is unmistakable once you are attuned to it. Over explaining. Questioning anything and everything. The drive to bend simple concepts into a ball of complexity. The compulsive theatre, the jokes that land too close to the bone.
The poverty loop is the most vicious one. Belief in inevitable scarcity reshapes behaviour until scarcity is their infrastructure. This is the precariat performing its most elegant trick. Internalising the scarcity so completely that abundance becomes a threat. When your baseline is calibrated to managed disappointment, any real possibility of escape triggers the same circuits as mortal danger. Better to preemptively destroy the bag in the discourse than risk the psychic rupture of actually winning. It’s illogical on the surface and brutally coherent underneath.
The very demographic that needs convexity most aggressively rejects it at the precise moments in which it appears.
Fascinating.
For a long time I suffered from an affliction called “being realistic”, which ultimately is just a self limiting mind state. There are people who hear the word “hyperstition” and immediately think of internet occultists, schizophrenic message boards, or pseudointellectual Twitter accounts posting grainy images of abandoned malls with captions about liminal spaces. This is unfortunate because hyperstition is real. Hyperstition is simply the process through which beliefs alter behaviour until they begin producing the conditions that make themselves true.
Money is hyperstition. A dollar bill is paper infused with narrative force. Nations are hyperstition. Borders are invisible stories backed by bureaucracy and violence. Corporations are hyperstition. A startup worth ten billion dollars often begins as little more than conviction wearing a hoodie and burning investor capital.
Even identity is hyperstition. In fact, especially identity. The average person treats personality as archaeology. They behave as if somewhere deep beneath the soil exists a fixed and immutable self waiting to be discovered. “I’m just not disciplined.” “I’m not charismatic.” “I’m bad at business.” “I’ve never been confident.” People speak about themselves like historians documenting ruins. This is backwards.
Most people are running negative hyperstition without realising it. They rehearse limitations until their nervous system mistakes repetition for truth. They repeatedly tell themselves who they are, then unconsciously coordinate behaviour around preserving that identity. The phrase, “I’m just not that kind of person” may be one of the most destructive sentences in the English language. Your brain is prediction machinery. It prefers coherence over truth. Once an identity stabilises, cognition begins optimising around consistency.If you believe you are socially awkward, every failed interaction becomes evidence. Every success becomes an exception. If you believe you are destined for mediocrity, effort begins to feel embarrassing. Why try hard in a story already written? Elite athletes understand this instinctively. Combat athletes will often speak about entering different states or identities. Similar to successful founders. Founders become temporarily delusional enough to believe companies into existence before reality catches up. This is why so many successful people appear irrational in retrospect. Rationality alone rarely gets extraordinary outcomes. Hyperstitional belief allows individuals to temporarily borrow certainty from futures that do not yet exist.
The future version of you shouldn’t be built only on motivation. Motivation is unstable. It evaporates under fatigue, boredom, and embarrassment. The highest leverage psychological shift is moving from outcome thinking to identity thinking. “I want to get in shape” becomes “I am someone who trains”. “I want to be successful” becomes “I am someone who executes”. This sounds trivial until you realise nearly all human behaviour is symbolic performance. We wear identities long before we inhabit them fully. You can see this clearly in children. And religion, religions ritualise before belief stabilises. Armies manufacture esprit de corps through symbols. Universities manufacture prestige through myth. The uncomfortable truth is that you are already running a story, the question is whether you chose it? Most people wait for evidence before belief. Hyperstitional people understand the sequence is often reversed.
What makes an asymmetric bet? Many confuse buying something down 90% from ATH with asymmetry. A price drawdown alone does not create an asymmetric opportunity. A dead asset at -99% can still be a poor investment if the probability weighted outcome remains negative.
I’ve attached two images. The first frames asymmetry through expected value. The blue region represents situations where downside, dead money, or weak upside dominate. In these cases, capital is unlikely to compound meaningfully. By contrast, the yellow/orange region represents situations where the upside/downside profile becomes increasingly non linear. You do not need to be right often if the payoff distribution is sufficiently convex.
These opportunities occasionally emerge when the market underprices a meaningful structural change, a major shift of narrative, improved fundamentals, better supply dynamics, major catalysts emerge, etc. Ask yourself, “has the payoff distribution changed while the market still prices the old narrative?”
Everyone is looking for a unicorn. Bulls and bears are looking for a unicorn. It does not matter if you find a billion dollar unicorn at $900M, you should focus on finding a unicorn in the soil; fertile soil.
Like tens of thousands of others, I was eligible for the unicorn airdrop a few years back. The website was charming and funny. What % of coins/communities would survive, let alone start gaining momentum, if what is described below happened to them?
There is only one horn
It’s in the name
🦄 $1B
Honestly congrats to $UWU holders, at this point whoever is left is un-shakeable, this goes beyond conviction, ive never seen anything like it
-token is mintable
-team disappeared
-chain shut down
-website went 404
-dev no tg login for 7 months
-price dump
-token stuck on chain
yet the community
-kept making memes and new art
-created new lore
-created new onion layers with a tight core of dreamers
-remained hopeful
-kept raiding
What makes an asymmetric bet? Many confuse buying something down 90% from ATH with asymmetry. A price drawdown alone does not create an asymmetric opportunity. A dead asset at -99% can still be a poor investment if the probability weighted outcome remains negative.
I’ve attached two images. The first frames asymmetry through expected value. The blue region represents situations where downside, dead money, or weak upside dominate. In these cases, capital is unlikely to compound meaningfully. By contrast, the yellow/orange region represents situations where the upside/downside profile becomes increasingly non linear. You do not need to be right often if the payoff distribution is sufficiently convex.
These opportunities occasionally emerge when the market underprices a meaningful structural change, a major shift of narrative, improved fundamentals, better supply dynamics, major catalysts emerge, etc. Ask yourself, “has the payoff distribution changed while the market still prices the old narrative?”
Everyone is looking for a unicorn. Bulls and bears are looking for a unicorn. It does not matter if you find a billion dollar unicorn at $900M, you should focus on finding a unicorn in the soil; fertile soil.