Short Money Rules
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Above-average results require not being afraid of looking wrong.
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Most people are afraid of looking wrong.
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Good investing is 50% psychology, 48% history, 2% finance.
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Great investing is 40% skill, 20% luck, 40% inability to tell which is which.
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Bad investing is 40% overconfidence, 40% fees, 20% denial that keeps it all going.
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Getting rich is hard.
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Staying rich is harder.
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Being satisfied with your riches is hardest.
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Some good advice is simple but made complicated because professionals can’t charge fees for simple stuff.
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The fact that you can’t charge fees for it is part of what makes it good advice.
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Wealth is what you don’t see – money that hasn’t been spent, cars that haven’t been bought, jewelry that hasn’t been purchased.
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Most people can afford not to be a great investor.
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Most people can’t afford to be a bad investor.
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The combination of the last two is the foundation of investing risk.
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Past results cause confidence to rise faster than ability.
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You’re not obligated to have opinion about anything. Unless you’re paid to do so.
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You’re obligated to not have an opinion about things you don’t understand. Unless you’re paid to do so.
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Be wary of people who are paid to give opinions.
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All market growth is just earnings and what people want to pay for those earnings.
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All economic growth is just population growth and how productive those people are.
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Being nice to people is the easiest career competitive advantage.
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Being smarter than others is the hardest.
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Options make people happy.
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Debt reduces options.
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Obvious risk: not having three months of emergency savings.
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Underappreciated risk: having three months of emergency savings when the average duration of unemployment is six months.
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People like weekends because it’s when they have the most control over their time; financial goals should keep this in mind.
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John D. Rockefeller was worth the equivalent of $340 billion, but he never had penicillin, sunscreen, or Advil. For most of his adult life he didn’t have electric lights, air conditioning, or sunglasses.
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Which is to say: Everything about money is results in the context of expectations.