The Psychology of Money Flashcards
Holding cash during a bull market
Say cash earns 1% and stocks return 10% a year. That 9% gap will gnaw at you every day. But if that cash prevents you from having to sell your stocks during a bear market, the actual return you earned on that cash is not 1% a year- it could be many multiples of that, because preventing one desperate, ill-timed stock sale can do more for your lifetime returns than picking 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 win.
Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.
I’ve been banging away at this thing for 30 years. I think the simple math is, some projects work and some don’t. There’s no reason to belabor either one.
Just get on to the next.”
Write down some projects you are working on and your thoughts with this quote in mind
If respect and admiration are your goal, be careful how you seek it. Humility, kindness, and empathy will bring you more respect than horsepower ever will.
Pg 94
The wisdom in having room for error is acknowledging that uncertainty, randomness, and
“unknowns”.
are an ever-present part of life. The only
way to deal with them is by increasing the gap between what you think will happen and what can happen while still leaving you capable of fighting another day.
