The Jared Dillian Letter

An Old Friend Turned $25K into $9 Million

I bet you’ve imagined that life-changing investment.

You know, the one where a few thousand bucks turns into millions and millions of dollars. Everyone indulges those daydreams sometimes.

Well, I recently had an old friend on my radio show who actually made that happen.

It all started back in 2012, when my friend Adam was a junior mortgage trader in New York. He was doing okay—he had about $200,000 saved up.

But he didn’t own a car, and he did didn’t own a house or apartment. By New York City standards, I’d say he was lower-middle class.

Crucially, though, he didn’t have any debt. And he was able to take big risks because he didn’t have any kids.

Adam had another friend who’d gone to Harvard business school. And this guy was starting an exercise bike company.

Adam thought it was a terrible idea. He just didn’t see a big market for expensive exercise bikes. But he knew his friend was an exceptional guy who was laser-focused on building the company.

So, he invested $25,000.

Still, Adam thought it was a foolish move. Something like 90% of startups go to zero, and he figured that’s what would happen.

But he took the risk anyway. And, over the next eight years, his $25,000 investment turned into $9 million.

The company, of course, was Peloton (PTON).

Put 10% of Your Money in Moonshots

In one sense, my friend Adam was very lucky to know the founder of Peloton. But that’s only part of the story.

A lot of people, even if they have those connections, can’t or won’t take big risks. Either they don’t have the cash, they’re held back by debt, or they’re simply unwilling to make the leap.

Remember, Adam thought he was absolutely foolish to put a big chunk of his money into something he thought was a terrible idea. But I disagree.

When you build your investment portfolio, you want 90% of your money in safe things, like The Awesome Portfolio, with a mix of stocks, bonds, cash, gold, and real estate. That’s how you safely grow your money without giving yourself a heart attack.

Then, when you know that the vast majority of your money is secure, you can put 10% of it in moonshots. To do that, you’ll need:

  • Cash to invest
  • Zero debt
  • The ability to see the opportunity, and
  • The willingness to take the risk.

Reserve Your Moonshots for Exceptional People

Taking moonshots is not the same as taking dumb risks. The idea is to bet on extraordinary people with big ideas.

Remember, Adam didn’t invest in Peloton because he thought it was a great idea. He invested in the company because he trusted the CEO. He knew this guy could execute his vision for the company.

That’s the critical part.

Everyone has a buddy with a million-dollar idea. Some of these guys have a new one every week. And they’re more than happy to tell you about it over a beer, but that’s where it stops. There’s zero follow through.

If your brother-in-law asks you to invest in his company, but you think he’s a loser, don’t do it. The company is going to fail, and your investment it going to disappear.

Instead, reserve your moonshot money for the best people… the people with the character necessary to solve a never-ending series of problems and push their ideas across the finish line.

Jared Dillian
Jared Dillian

P.S. Don’t even think about the moonshots until your core portfolio is squared away. You can take care of that pretty quickly with The Awesome Portfolio, my low-risk, low-volatility strategy for growing and protecting your money in good times and bad times. Keep in mind, low risk doesn’t mean boring… The Awesome Portfolio has returned nearly 16% since March. Find out more by clicking here.