Student Question:
Hello Master, I’d like to ask about investing. I worked at a bank in Beijing for several years but made no real progress in my career, so I eventually resigned. My parents gave me a sum of money, and I decided to use it to invest and make it grow.
Because I desperately wanted to succeed, I cast a wide net looking for projects. At first I felt like there were plenty of money-making opportunities out there — what I lacked wasn’t projects, but the right people. So whenever I met someone who seemed capable and had a project, I’d invest in that person.
But over time I realized: people come with a lot of variable factors. Those initial solemn promises eventually turned into a string of excuses. When nothing was wrong, nothing was a problem — but the moment something went wrong, everything became a problem.
Another issue was that all my investments were angel-stage — the very first round. None of these ventures had a strong foundation of resources or experience. Every single one was a brand-new project. The losses were significant.
I’d like your guidance: how should I approach investing?
Master Chi’s Response:
My advice to middle-class individuals is this: under current conditions, blind investing is not appropriate — especially in fields you’re unfamiliar with.
1. What is the first thing to grasp in investing?
Let me give you an example. Someone practices piano for a long time with no visible progress — they simply cannot play a piece from start to finish. Yet they persist. Then one day, suddenly, they perform a Chopin piece flawlessly.
Is this story about delayed gratification? Not quite. Because even if you work on a project today and don’t earn one hundred thousand yuan — even if your goal is five hundred thousand yuan a year from now — the person who was supposed to pay you may have already gone bankrupt, and you’ll never see a cent.
The real question here is: how do you act when you have little feedback? How do you keep going when external rewards are random and unpredictable? How do you build the capacity for correct action when there’s no signal confirming you’re right — and still carry on with hope through the silent, unrewarding days?
2. What is the true nature of investing?
If you believe the answer is predicting where a project is headed and maximizing returns, then you’re moving in the wrong direction entirely. Sustained success in investing will remain out of reach.
The true nature of investing is about managing loss — mitigating the risks that lead to catastrophic loss, and from that discipline, gaining the capacity to survive. That is the whole of it.
When your losses are small, and when every loss is the kind that can be converted into future gains, then you can say you’re doing it right. Not by analyzing the person, not by analyzing the project — but by how you handle loss.
3. When you manage loss well, profit follows naturally.
Profit is a function of loss — nothing more. Preserve your capital base. Ensure you’re playing the game correctly. That is what keeps you in the game at all.
And as much as possible: stop making predictions.
This sounds simple, but most people don’t genuinely focus on loss — and certainly not on the possibility of severe loss. Most people also can’t think clearly about the downstream impact of losses. They’re focused on gains.
So when you shift your attention away from gains and toward losses, you build a real survival edge in this market. Find your investment safety zone. Protect your principal.