Home > Work > The Geometry of Wealth: How to shape a life of money and meaning
1 " Taking more risk produces more return is inaccurate. Instead, taking more risk increases the range of potential outcomes "
― , The Geometry of Wealth: How to shape a life of money and meaning
2 " Remember, successful investing is based more on minimizing regret than maximizing gains. "
3 " It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” – Charlie Munger "
4 " Priority one is risk management. It is to protect ourselves from the potential for loss, especially catastrophe. In the human mind, losses weigh much more heavily than gains, so elevating risk management is the right thing to do. This step is about building the proper mindset, one that values avoiding mistakes over demonstrating brilliance. "
5 " Simplification is the smart path toward effectively managing expectations. In general terms, met expectations lead to temporary happiness and unmet ones lead to temporary sadness. The human mind is wired to avoid losses more than it is to achieve gains, so minimizing regret is more important in this process than is maximizing future upside. "
6 " In life and literature, the good guys fight for others. The bad guys fight for themselves. Heroes have context. "
7 " Richer humans become ensnared in a “luxury trap,” in which formerly unimaginable inventions evolve from mind-blowing to luxuries to taken-for-granted to necessary. I can’t imagine living without a refrigerator or airplanes, but my great-grandparents certainly could. Over time, the amazing becomes normal. "
8 " I’ve come to believe that there are four enduring sources of a joyful life. I call these Connection, Control, Competence, and Context. Connection is the need to belong. Control is the need to direct one’s own destiny. Competence is the need to be good at something worthwhile. Context is the need for a purpose outside of one’s self. At the nexus of money and meaning the “Four C’s” are what is being underwritten. They sit at the heart of funded contentment. Let’s look at each of these in turn. "
9 " In the cycle of planning and adapting, demonstrating willpower (control before the fact) and resilience (control after the fact) is critical. "
10 " While we all share similar concerns and pose similar questions, we don’t figure it out collectively. Money is an isolated—and isolating—affair. We figure it out on our own. What are we all up against? I see three broad challenges currently: We have more control over our own finances. We are wired to make bad money decisions. We have less room for error. "
11 " Here’s a summary of our predicaments: We have more responsibility for our financial lives than ever before. We are uncomfortable talking and learning about money. We are living considerably longer, prolonging all of these problems. Our brains are hardwired to make lousy financial decisions. An unprecedented amount of information and choice makes decision-making harder. Many people are financially fragile. Our earnings and savings potential is less than it once was. Outsized investment returns are unlikely, so the market will not save us. This is not a good state of affairs. But as so many of us like to say when confronted with a tough situation: It is what it is. We carry on. Let’s now see what we can do about it. 1 "
12 " Kahneman’s terms, “what you see is all there is.” One of the ironies of our brain wiring is that the need to make the world feel safe and sensible can lead to poor decision-making. "
13 " People who have more money are not necessarily happier—though some are. If anything, money alleviates sadness more than it inspires joy. "
14 " Money is an opportunity for happiness, but it is an opportunity that people routinely squander because the things they think will make them happy often don’t.”106 People don’t spend wisely. "
15 " Jumping to conclusions “is efficient if the conclusions are likely to be correct and the costs of an occasional mistake acceptable, and if the jump saves much time and effort. "
16 " One of my investment heroes, Charlie Munger, once remarked: “Invert. Always invert.” By this he meant take the time to think differently about common problems. Conventional thinking leads to conventional outcomes. "
17 " He spoke with determination about redress, but not revenge. "
18 " Without a destination, we meander. Most of us become quite good at justifying wherever we end up, but would reluctantly admit that’s not necessarily where we wanted to be. "
