• No one's crazy
  • The challenge for us is that no amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty
  • People's lifetime investment decisions are heavily anchored to the experiences those investors had in their own generation - especially experiences early in their adult life.
  • Individual investor's willingness to bear risk depends on personal history.
  • The view of money for different people formed in different worlds. And when that's the case, a view about money that one group of people thinks is outrageous can make perfect sense to another.
  • Every financial decision a person makes sense to them at that moment and checks the boxes they need to check. They tell themselves a story about what they're doing and why they're doing it, and that story has been shaped by their own unique experiences.
  • We all do crazy stuff with money because we're all relatively new to this game and what looks crazy to you might make sense to me. But no one is crazy - we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.
• Luck and Risk
  • Nothing is as good or bad as it seems.
  • Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. they are so similar that you can't believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.
  • You are one person in a game with seven billion other people and infinite moving parts. the accidental impact of actions outside of your control can be more consequential than the ones you consciously take.
  • It's possible to statistically measure whether some decisions were wise. but in the real world, day to day, we simply don't. it's too hard. we prefer simple stories that are easy but often devilishly misleading.
  • The line between bold and reckless can be thin. when we don't give risk and luck their proper billing it's often invisible.
  • Be careful whom you praise and admire. Be careful whom you look down upon and wish to avoid becoming.
  • Not all success is due to hard work, not all poverty is due to laziness. Keep this in mind when judging people, including yourself.
  • Focus less on specific individuals and case studies and more on broad patterns.
  • You'll get closer to actionable takeaways by looking for broad patterns of success and failure . the more common the pattern, the more applicable it might be to your life.
  • People who have control over their time tend to be happier in life is a broad and common enough observation that you can do something with it.
  • Success is a lousy teacher. It seduces smart people into thinking they can't lose.
  • When things are going extremely well, realize it's not as good as you think. You are not invincible, and if you acknowledge that luck brought you success then you have to believe in luck's cousin risk, which can turn your story around just as quick;y.
  • Failure can be a lousy teacher because it seduces smart people into thinking their decisions were terrible when sometimes they just reflect the unforgiving realities of risk.
  • The trick when dealing with failure is arranging your financial life in a way that a bad investment here and a missed financial goal there won't wipe you out so you can keep playing until the odds fall in your place.
  • We should recognize the role of luck in success, the role of risk means we should forgive ourselves and leave room for understanding when judging failures.
• Never Enough
  • 'There is no reason to risk what you have and need for what you don't have and don't need'
  • The hardest financial skill is getting the goalpost to stop moving.
  • Modern capitalism is pro at two things: generating wealth and generating envy. Perhaps they go hand in hand; wanting to surpass your peers can be the fuel of hard work. But life isn't any fun without a sense of enough. Happiness, as it's said, is just results minus expectations.
  • Social comparison is the problem here.
  • The ceiling of social comparison is so high that virtually no one will ever hit it.
  • The only way to win in a Las Vegas casino is to exit as soon as you enter.
  • "Enough" is not too little.
  • There are many things never worth risking, no matter the potential gain.
    • reputation is invaluable
    • freedom and independence is invaluable
    • family and friends are invaluable
    • Being loved by those whom you want to love is invaluable
    • Happiness is invaluable
    • and your best shot at keeping these things is knowing when it's time to stop taking risks that might harm them. Knowing when you have is enough.
• Confounding Compounding
  • If something compounds - if a little growth serves as the fuel for future growth - a small starting base can lead to results so extraordinary they seem to defy logic. It can be so logic-defying that you underestimate what's possible, where growth comes from and what it can lead to.
  • The point is that what seems like small changes in growth assumptions can lead to ridiculous, impractical numbers.
  • But good investing isn't necessarily about earning the highest returns because the highest returns tend to be one-off hits that can't be repeated. It's about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That's when compounding runs wild.
• Getting wealthy vs Staying wealthy
  • Good investing is not necessarily about making good decisions. It's about consistently not screwing up.
  • Getting money is one thing. keeping it is another.
  • but keeping money requires the opposite of taking risks. It requires humility, and fear that what you've made can be taken away from you just as fast. It requires frugality and an acceptance that at least some of what you've made is attributable to luck. so past success can't be relied upon to repeat indefinitely.
  • We can't assume that yesterday's success translates into tomorrow's good fortune.
  • The ability to stick around for a long time, without wiping out or being forced to give up, is what makes the biggest difference.
  • Having an edge and surviving are two different things: the first requires the second. You need to avoid ruin. At all costs.
  • More than I want big returns, I want to be financially unbreakable. And if I'm unbreakable I actually think I'll get the biggest returns, because I'll be able to stick around long enough for compounding to work wonders.
    • preventing one desperate, ill-timed stock sale can do more for your lifetime returns than dozens of big-time winners.
    • Compounding doesn't rely on earning big returns. Merely good returns sustained uninterrupted for the longest period of time - especially in times of chaos and havoc - will always work.
  • Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.
    • A plan is only useful if it can survive reality. And a future filled with unknowns is everyone's reality. A good plan doesn't pretend this wasn't true; it embraces it and emphasizes room for error. The more you need specific elements of a plan to be true, the more fragile your financial life becomes.
    • Room for error - often called the margin of safety - is one of the most underappreciated forces in finance. A frugal budget, flexible thinking, and a loose timeline anything that lets you live happily with a range of outcomes.
    • The margin of safety is raising the odds of success at a given level of risk by increasing your chances of survival. Its magic is that the higher your margin of safety, the smaller your edge needs to be to have a favorable outcome.
  • A barbell personality - optimistic about the future but paranoid about what will prevent you from getting to the future - is vital.
    • Sensible optimism is a belief that the odds are in your favor, and over time things will balance out to a good outcome even if what happens in between is filled with misery.