Thread by @jaltucher

THE ULTIMATE GUIDE TO GOING BROKE (in 20 easy steps):

A) THINKING YOU ARE SMART: Every day I wake up and say, "I am stupid."
Some people call it "beginner's mind". As if to fool themselves.
But I know the truth. Whenever I think I'm smart, I lose money.
When I think I'm stupid, I get curious, I get help, I help others,

A1) Stupidity is a super power when used correctly.

B) VALUE:
Not understanding how to value something. Studying similar deals, similar sales, etc. Everything has a value. Even if it's intangible. Come up with a formula for valuing things. Even the time you spend.

B1) Never spend less time on something you love so you can spend more time on something you hate.

C) VOLATILITY.
Not understanding the volatility of income streams. Even a stable salary is not stable.
And business or investment income is filled with uncertainty.
And friendships and love can be volatile as well.
Stability is a myth,

D) LEAKS
Bad relationships, alcohol, addictions, need for validation, etc - these will always cost more time and money than one thinks.

Every day, today, I have to be aware of my leaks. Keep them in check. e.g. I spend too much time thinking about people who wrong me.

E) DELUSION.
Not knowing where your money is and where it's going (setting aside for taxes, etc.)

I used to be afraid to look at my bank account. Well, I still am. but I'm getting better.

F) SPENDING
People spend on big items: houses, college, car, etc. And then they try to save by not going to Starbucks.

Don't let the myths of society rule your spending.

G) NOT UNDERSTANDING RISK
Every investment and every bet must have an unfair advantage.

Good investors don't take risk. They mitigate risk. Good entrepreneurs don't take risk. They mitigate risk.
Success is about going where others PERCEIVE risk but you learn to reduce it.

H) DIVERSIFICATION.

Not just in stocks, but in all investments: stocks, private deals, loans, etc and even how you invest your time.
No diversification equals too much risk (see above). Even no
diversification of time takes too much risk of a bad life.

I) BEING A DICK

Every day help others make money or achieve their goals.

Even 1-2 "helps" a day adds up to 730 a year, adds up to a lot of people who want to give you unfair advantages back when you need it.

J) NOT LOOKING AT THE WORST CASE:

Divorce. Disease, Depression. Business failure. Economic cycles. A 1 year deal may turn into a 5 year deal. A trend might not work out.

In at least 80% of situations, the worst case will happen. But if you are ready, it can be the best case.

K) POSITION SIZE.

People don't believe me when I say this. But the less you invest, the more you will make.

The less energy you put into a situation at first, the better the situation will work.

Sleeping well, with less anxiety, is the best investment you can make.

K1) For me, the smaller I invest, the less I have to think about an investment.. Which means I can let it ride. The key to wealth is letting good investments ride for years.

But you can only do this if you start off very very small.

L) LONE WOLF -

Lone wolves are failures.

Thinking "If I do this deal on my own, without sharing it with others, I'll win bigger". You ALWAYS want to invest with more people and particularly people SMARTER than you.

M) LOSERS.
It took me 20 years of trial and error to learn the difference.
I'm 90% there but still learning every day.
This is an important rule. "Losers" will NEVER make money or have a good deal.
"Winners" make money over the long run. ONLY stick with the winners.

M1) The worst are sore losers. Show me a sore loser and I'll show you a loser.

N) LOSERS,PART II.
A loser is someone who blames others, is a "victim", blames the economy, blames a partner, has lots of bad relationships, shows you glimpses of poor integrity , gossips about others (because to others they are gossiping about you),....

N1) (continued)...Losers... doesn't know how to value risk, thinks entrepreneurship is about risk, has lots of "accidents" (car accidents, gets mugged, is late for meetings because of traffic, etc). Doesn't return calls.

O) LOSERS, PART III

Can a loser change? Yes.

I've always had some elements of "winner" and MANY elements of "loser".Losers get better when they provide value.

But here's the thing: losers can change but you can't change a loser. Dump them.

P) FOCUSING ON OUTCOMES IS PATHWAY TO FAILURE:

People say, "Make a goal and then go for it". This is BS advice.

As you get better at something you learn more.
Which means goals and outcomes change.

Focus on getting 1% better each day. The right outcome happens.

Q) ENVY.
Admire success so you learn its vocabulary.
When you compare, you despair.
I can count ten people right now who used to be close to me who now hate me.
It bothers me that they hate me. This is Reverse Envy. I have to get rid of that also. To move on.

R) FEAR VERSUS GROWTH:

Making FEAR decisions instead of GROWTH decisions. e.g. saying “yes” to something you don’t want to do because you are afraid you will lose an opportunity if you say “no”.

Always ask, "is this a growth decision?" If "no" then decide "no".

S) UNDERSTAND 'MONEY'.

People say "money buys freedom" but then they get more stressed the more money they have. Respect money. Look at the sky and take a deep breath. Think about nothing. Let money buy you peace.

If you don't respect money, it won't respect you.

T) I'm guilty of all of the above. And yeah, I regret all of the above. But a growth decision is doing what I'm doing right now and that's it.