IPL Special Offer- up to 41% Off on Elearnmarkets Courses & Webinars. Use code AMIKKR & REGISTER NOW

The Psychology of Money

Room For Error

(Chapter 13)

Blackjack and poker players know they are dealing with probabilities not certainties.


The best plan is to plan for things to not go according to plan.


“Margin of safety—you can also call it room for error or redundancy—is the only effective way to safely navigate a world that is governed by odds, not certainties.”


“The odds are in your favor when playing Russian roulette. But the downside is not worth the potential upside. There is no margin of safety that can compensate for the risk.”


It is impossible to prepare for or anticipate what you cannot envision.


Minimize the impact of failure by avoiding single points of failure.


“The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.”


Rainy-day funds are a good idea: save for things you cannot anticipate or predict.

Experience the insightful exploration about the book "Psychology of Money" on YouTube with Vineet Patawari, CEO of Elearnmarkets & StockEdge.

Did you like this unit?

Units 16/23

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