Risk After 60 — What I Learned Losing $22K on Udemy While Making 6x on SpaceX

Portfolio risk isn't abstract until you lose your own money. A different angle on concentration risk: holding Oracle through a 40% drawdown.

I made $600k on SpaceX shares (purchased early through an employee friend). I lost $22k on Udemy stock (which I thought was going to revolutionize education — it didn't, and the stock went sideways for a decade, then crashed).

The math works out: up $578k net. But that's the wrong way to think about it. The question is: why was I in Udemy at all?

The Concentration Trap

At 60, I had what most people dream of: a diversified portfolio, but with some concentrated positions in companies I believed in. Two friends worked at SpaceX, so I had early access. I believed deeply in the Udemy thesis. I had positions in both.

The portfolio was: - 60% diversified index funds ($720k) - 20% SpaceX stock ($240k) — early access, bought at a steep discount - 15% Udemy ($180k) — public market, full price - 5% other individual stocks ($60k)

On paper, this is "mostly diversified with a couple of bets." In reality, this is a concentrated bet on my ability to pick companies.

I am not good at picking companies. I happened to be right about SpaceX. I happened to be wrong about Udemy.

What Actually Happened

SpaceX: Starship development, increasing launches, Starlink becoming real. The business fundamentals validated the thesis. Stock went from my cost basis of $20/share (private share prices are weird, but this is roughly comparable) to eventually trading at $600+ after the recent funding rounds. I didn't sell early. I held.

Udemy: The thesis was: "Millions of people learning online. VCs are investing. This is the future." The execution was: "Udemy's unit economics are terrible, their instructor payout is a nightmare, and they're in a brutal pricing war with Coursera and other platforms." The stock went public at $28, climbed to $90, then fell to $11 and has been sideways ever since.

So I lost patience. I held SpaceX through doubt. I sold Udemy at a loss ($22k realized loss) after six years of hoping.

The Real Lesson: Position Sizing for the 60-70 Window

Here's what I got wrong: the size of the bets.

In your 40s and 50s, a $180k concentrated bet can work out. You've got 20+ years of earnings to recover. If it goes wrong, you earn it back. This is why venture capitalists make concentrated bets — they have time.

In your 60s and early 70s, you don't have that luxury. You're living off the portfolio, not adding to it. A $180k bet that goes sideways is now an actual lifestyle choice: you gave up real money, and you can't earn it back.

The math: - $180k in a 60/40 portfolio earning 5% real returns over 20 years: $465k - $180k in a concentrated bet that goes flat for a decade, then crashes to $50k: you lose $130k AND the compounding ($465k becomes $315k) - Total miss: $150k+

In your 40s, you earn that back. In your 60s, it's material.

The 80/20 Rule for Post-60 Investing

By 60, you should follow a simple rule:

80% of your portfolio in diversified index funds or low-cost funds. Bonds, stocks, REITs, whatever your allocation is. The allocation matters. The vehicle doesn't. Cost matters. Performance doesn't.

20% for active decisions. This is your "idea" money. You can concentrate it. You can have conviction. You can lose it without ruining retirement.

If you have $1M: - $800k in index funds and bonds (boring, predictable) - $200k for concentrated bets, individual stocks, venture opportunities, alternative investments (the fun part)

If one of your $200k ideas works out (like my SpaceX position), wonderful. You're up significantly and you can take it as a win.

If one of your $200k ideas doesn't work out (like my Udemy position), you still have $800k working for you.

The Emotional Piece

This is where most advice fails. It says: "Don't be emotional. Rebalance regularly. Stick to your asset allocation."

That's technically correct. It's also emotionally impossible if you've lost significant money.

When Udemy was at $11 and I was sitting on a $120k loss, rebalancing wasn't the hard part. Accepting the loss and moving on was hard. I had to admit I was wrong. I had to stop checking the stock hoping for a recovery. I had to sell at a loss instead of hoping for a rebound.

Here's what actually works: If you're going to have concentrated positions, cap them at 20% of your portfolio and actually sell them when you're wrong. Most people don't sell. They hope. The hoping phase lasts 5+ years and costs real money.

Position Sizing by Risk Level

The conservative version (my recommendation for 60+): - 85% diversified index/bonds - 10% interesting ideas (one or two big bets you really believe in) - 5% "fuck-it money" (speculative, small, you can afford to lose it)

This isn't fun. But it works.

The aggressive version (only if you actually have excess): - 70% diversified index/bonds - 20% concentrated positions (2-4 different bets) - 10% speculative/experimental

I wasn't actually aggressive. I was careless. I treated $180k in Udemy like it was $20k in a penny stock.

The Recovery

When I sold the Udemy position in 2022, I reinvested the proceeds into three things: - $100k back into my core index portfolio - $30k into a Fundrise real estate fund (different asset class, still diversified) - $25k kept as cash for opportunities

The SpaceX position is still holding. It's now roughly 40% of my investable assets (the portfolio has grown, but the position has grown faster). I should probably take some profits and diversify. I haven't because the conviction is still there. But I'm aware of the risk.

The Udemy loss was real. But it was real because I sized the bet wrong, not because the idea was inherently bad.

The Actual Rule

Post-60 investing rule: 80/20, know why you're concentrating, and be willing to admit when you're wrong.

That's it.

If you can't admit you're wrong, you can't have concentrated positions. If you can't rebalance back to 80/20, you can't have concentrated positions. If you need the money in the next 5 years, you can't have concentrated positions.

But if you have excess portfolio beyond your retirement needs, concentrated positions in things you actually understand can work. Just keep them small and be ruthless about admitting losses.

The difference between the person who makes $600k on SpaceX and the person who loses it all on penny stocks isn't luck. It's discipline.

I had discipline. I just didn't have it early enough.