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Getting Wealthy Vs. Staying Wealthy
(Chapter 5)
There are many ways to get wealthy. There is one way to stay wealthy: through a combination of frugality and paranoia.
Getting money and keeping money entirely different things and require entirely different mindsets and strategies.
“Getting money requires taking risks, being optimistic and putting yourself out there.”
“Keeping money requires the opposite…it requires humility, and fear that what you’ve made can be taken away from you just as fast.”
Michael Moritz (venture capitalist): “We assume that tomorrow won’t be like yesterday. We can’t afford to rest on our laurels. We can’t be complacent. We can’t assume that yesterday’s success translates into tomorrow’s good fortune.”
Nassim Taleb: “Having an edge and surviving are two different things: the first requires the second. You need to avoid ruin. At all costs.”
Having a “survival mindset” requires three things:
- Aim to be financially unbreakable: be able to stick out swings in the market and stay in the game long enough for compounding to work its magic.
- The most important thing to plan for: the plan won’t go according to plan. A good plan leaves room for error. “The more you need specific elements of a plan to be true, the more fragile your financial plan becomes.”
- Be optimistic about the future but paranoid about the obstacles to your success.
Explore the book the "Psychology of Money" on YouTube with the Co-founder & CEO of Elearnmarkets & StockEdge, Vineet Patawari.
Michael George Knight
This book summary has been contributed by Michael George Knight, who is the founder of Bestbookbits.com Bestbookbits is the world's largest free book summary website in video, written and audio format educating people around the world with the best book bits in the shortest amount of time. They are a nonprofit organization with the mission to create an educated world. You can read many other book summaries on various genres by clicking on the following link: Bestbookbits.com