Johnny Carson and Charlie Munger have both given memorable commencement speeches.

While most traditional commencement speeches take a stab at bestowing wisdom and sharing the keys to happiness and success, Johnny and Charlie took the inverse approach – they gave speeches on how to be miserable.

Johnny Carson gave the following prescriptions to be miserable:

• Ingest chemicals to alter your mood or perception
• Have envy
• Have resentment

A few years later in 1986 during his Harvard commencement speech, Charlie Munger added the following:

• Don’t be reliable
• Learn from only your mistakes
• Go down and stay down when you get your first, second, or third severe reverse in the battle of life.

With last week’s very normal market volatility, we could use this contribution to remind you that

a)the U.S. economy has experienced recessions approximately every six years since World War II

…and…

b) market corrections of 10% or more in the S&P 500 have occurred about every 1.9 years since 1950

… however…

inspired by Johnny & Charlie, we thought it timely to write about the best ways to torpedo your financial future.

Let’s dig in!

How to Destroy Your Wealth

1. Panic-Sell… EVERYTHING

The first rule of wealth destruction is to panic-sell the moment the market dips. When your investments start to lose value, sell them off immediately to lock in those losses. Ignore the fact that the market has historically rebounded after downturns; after all, who needs historical data when you have raw fear?

2. Obsessively Check Your Portfolio

To add a little more stress to your life, make sure you check your portfolio every hour. If you’re not glued to your investment app, how else will you ensure you make hasty, emotion-driven decisions? This behavior is guaranteed to cloud your judgment and push you toward the next item on our list.

3. Abandon Your Investment Plan

Who needs an investment plan when you’ve got animal spirits? Plans are for people who want to succeed. If you want to destroy your wealth, it’s crucial that you let short-term market fluctuations dictate your strategy. Who needs a long-term perspective when you can trend-chase the latest fad?

4. Overleverage Yourself

For those eager to fast-track their path to financial ruin, overleveraging is the ticket. Piling on debt to boost your investment potential looks genius when the market is soaring. However, when markets turn volatile, as they inevitably do, excessive leverage means even a small downturn can wipe out your equity and force you to sell assets at the worst possible time. Overleveraging ensures that when things go south, they go south in a hurry, magnifying your losses and potentially sinking your entire financial ship.

5. Put All Your Eggs in One Basket

To truly sabotage your financial future, it’s highly recommended that you put all your money into one stock, sector, or asset class. If it crashes, you can be sure that your entire portfolio will go down with it. Why spread risk when you can concentrate it for maximum destruction?

6. Time the Market

For those serious about wrecking their wealth, trying to time the market is a must. Predicting the exact moment to buy low and sell high is almost impossible, which makes it perfect for this list. By attempting to outsmart the market, you’ll likely buy high and sell low, ensuring that you lose money on both ends.

7. Neglect Your Emergency Fund

Why keep a safety net when you can throw it away on speculative bets? By neglecting your emergency fund, you’ll also ensure that if the unexpected emergency occurs, you can stack up even more financial pain by putting all expenses on a credit card.

8. Listen to the Noise

Finally, to completely destroy your wealth, let the media’s fear-mongering guide your financial decisions. Better yet, follow the advice of your cousin’s friend who swears they know the next big thing. Ignoring professional advice is key to making terrible financial choices.

Final Thoughts:

If you’re looking to obliterate your financial future, these steps are a great starting point.

But if you’re actually trying to build wealth and maintain it during volatile times, you might want to do the opposite.

Remember, the frequency of recessions (roughly every six years) and market corrections (about every 1.9 years) is a normal part of market cycles.

As Charlie Munger once said,

“The big money is not in the buying and selling, but in the waiting.”

Be patient, stay disciplined, and let time—and compound interest—do the heavy lifting