In the short story Without Glasses, the house help mistakenly breaks the author Robert Lynd’s glasses thus making him angry. Lynd makes an interesting case explaining his plight. What he wants, more than anything, is the ability to pickup today’s newspaper and read it if he wishes. What angers him is that he doesn’t have that option any more.

I had read this story as part of my school curriculum, and Lynd’s argument had made an impression on me as a kid. He stresses upon the significance of having options available. Let’s understand why that is important.

It’s common knowledge that 9 out of 10 startups in a VC’s portfolio go bust. But the one that makes it through pays off a 100x in return to offset the losses caused by the rest. By that logic, VCs don’t have to be right very often. If they can avoid making absolutely foolish bets, as long as they have options, that is, multiple startups to invest in, they will benefit from the positive side of uncertainty without any serious harm from the negative side.

When you have options, you don’t have to care about the average outcome—only the favourable outcomes. Because your wins far outweigh your losses. You get a larger payoff when you are right, which also makes it unnecessary to be right too often.

All of us aren’t VCs. But like VCs, if we have options—such as money, job opportunities, business ventures—we have the luxury to make mistakes without completely blowing up. That is why we diversify our investment portfolio.

Nassim Nicholas Taleb writes: “If you “have optionality,” you don’t have much need for what is commonly called intelligence, knowledge, insight, skills, and these complicated things that take place in our brain cells. For you don’t have to be right that often. All you need is the wisdom to not do unintelligent things to hurt yourself (some acts of omission) and recognise favourable outcomes when they occur.”

Optionality helps us avoid fixed plans, and gives us the opportunity to revise our agenda, so that we can change things up based on new information.

A simple example is having many options to read. I read multiple books at a time. Thus, if I get bored with one, I’m not obligated to continue reading it, since I have the option to read another one. But if you are limited to school material and get bored, you have a tendency to give up and do nothing.

If you are bored in any situation, you always have three options: remove yourself from it, change it, or accept it. Having optionality gives you the freedom to choose from the first two.

For example, if you are stuck at a dead-end job, you don’t have many options. If you need the money, you are obligated to do the job. On that note, one of the biggest providers of optionality is wealth. Wealth, unlike what most believe, isn’t about having a lot of money; it’s about having many options.

Wealth helps you afford the independence and ability to occupy your mind only with matters that interest you. If wealth is giving you fewer options instead of more, you’re doing it wrong.

But don’t confuse optionality with opportunism. They are similar, yet very different. In the matters of life and business, the opposite of optionality is obligation, but not when it comes to personal matters that involve others. The opposite of opportunism in human relations is loyalty. It’s a noble sentiment, but one that needs to be invested in the right places. Be loyal in your relations and moral commitments—not to your job.