The reasons behind our portfolios and investment choices reveal a lot more about us than we might initially think. Half of all US mutual fund portfolio managers do not invest a cent of their own money in their funds, according to Morningstar. “How Doctors Die” showed the degree to which doctors choose different end-of-life treatments for themselves than they recommend for their patients. This book does the same for financial money managers.

“Don’t tell me what you think, tell me what you have in your portfolio.” – Nassim Nicholas Taleb.

  1. “I did not intend to get rich. I just wanted to get independent.” – true success is exiting some rat race to modulate one’s activities for peace of mind.
  2. Owning a house without a mortgage is the worst financial decision but the best money decision
  3. At some point, you have to choose between being happy or being right.
  4. If you’re confident in what you’re doing, then the last thing in the world you’re worried about is what other people are doing.
  5. Humans generally lack courage more than genius, and persistence most of all. Accordingly, sticking with our financial plans is often more difficult than creating and implementing a good one.
  6. It is healthy to have wants that go unfulfilled.
  7. People spend far too much time trying to optimize every little thing, especially their portfolios. Once something is good enough, move on to more pressing issues.
  8. Use Cash to provide optionality to take advantage of market dislocations or unexpected opportunities
  9. Very few professional investors beat the market consistently, after accounting for the costs.
  10. The performance of individual securities is unpredictable, period. The performance of portfolios of securities is unpredictable on any short-term basis; what is predictable is cash flow.
  11. Holding onto losing investments (or allowing yourself to excessively focus on the losers) drags down your whole mental state, which is harmful in a variety of ways.
  12. Money is a tool, to buy things and to hurt others.
  13. The most important determinant of financial independence was not how much you save—it is how much you spend.
  14. You can’t hang an ETF on your wall, drink it, or drive it!
  15. By investing in people in the smallest ways, you can realize the biggest alpha.
  16. One of the best investments you can make is paying for a solid prenup before getting married. Divorce, with kids involved, is crazy expensive and thus a very, very bad investment.
  17. Wall Street is the only place where people driving a Toyota Camry to advise people with Bentleys on how to manage their money.
  18. It’s natural that the longer any craftsman works in his trade, the less likely he is to enjoy or consume the thing he makes or deals with.
  19. He who cares least wins.
  20. The greater the degree of government involvement in the provision of a good or service the greater the price increases over time, e.g., hospital and medical costs, college tuition, and childcare with both large degrees of government funding/regulation
  21. Instead of money freeing them from concerns or anxieties, the rich have architected and decorated their prison with their wealth and they can’t escape for fear of losing it.
  22. Have core positions that you have held for years and hope to hold for many more years.
  23. When you look at the richest entrepreneurs in the world, you will quickly see a pattern: Their largest asset is the business they founded or company stock.