Let me save you thirty years of waiting.
No matter how good a stock picker you are. No matter that at thirty you only own an index fund. Unless you want to fool yourself, that road won’t get you to financial independence any time soon.
And there’s a cold reason why.
The correlation between liquidity and the market is roughly one. The index doesn’t rise because companies are worth more. It rises because there’s more printed money chasing the same assets. You invest there and, at best, you don’t lose. You hold your purchasing power. You run to stand still.
They can tell you inflation is 2%, 3%, whatever the number is this month. It doesn’t matter. The index doesn’t make you rich. It keeps you from getting poorer. That’s all.
So either you look elsewhere, or you’re badly mistaken.
Now let me tell you how someone actually did it.
October 1987. Black Monday. Markets collapsed around 20% in a single day. Almost every trader lost their shirt, their house and their mind that day.
Taleb made a fortune.
Not because he predicted it. This is the key part: he had no idea when it would happen. He held positions that paid brutally if something extreme occurred, and that cost almost nothing while nothing did.
That’s it. That’s the trick. The rest is philosophy.
Because there are basically three ways to get truly rich.
One: you inherit. Congratulations, you chose your parents well.
Two: you find an eighty-year-old widow with a Bordeaux vineyard and a weak heart. Viable, but it’s a thin market.
Three: you build convexity. You lose a little many times and win enormously a few times.
Only the third one is up to you. And it’s the one Taleb used his entire career.
He traded options at banks buying cheap insurance against catastrophes the market believed impossible. Then he started his own fund, Empirica. Later he partnered with Mark Spitznagel at Universa, a fund built to do one thing: explode when the world breaks. In 2008 and in March 2020, it exploded.
And all the while, he wrote. Fooled by Randomness. The Black Swan. Antifragile. The Black Swan sold millions of copies. That’s convex too: a book costs the same to write whether a thousand people read it or three million.
Look at who actually got rich with fully convex positions. Not the people who bought shares in the market. The entrepreneurs who built a company and took it public.
That’s where the asymmetry lives. Their stake before listing was worth almost nothing and could become a fortune. Limited downside, unlimited upside. That’s the pure convex position.
But notice the detail: the fortune is created before the IPO, not after. Nobody got rich being one more participant in the market. Unless they drew an extraordinary salary, of course.