How to Destroy Your Wealth

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

Top 5 High-Leverage Strategies to Maximize Healthspan

In both health and finance, we are the sum of our daily habits.

While we can’t control our genetics any more than we can control the stock market, we can influence our future by focusing on the things within our control.

Just as smart financial decisions made consistently over time can build wealth, the right health practices can dramatically extend your lifespan and healthspan.

Healthspan refers to the period of a person’s life during which they are generally healthy and free from serious or chronic illness.

Unlike lifespan, which measures the total number of years a person lives, healthspan focuses on the quality of those years, emphasizing the time spent in good health without significant disease or disability.

The goal is to not only live longer but to live better, with a higher quality of life for as many years as possible.

While there’s an entire universe of fringe advice, devices, and unproven therapies that can supposedly improve your health, the benefits are usually overstated, and the solutions are overpriced.

When it comes to health and “controlling the controllable” – much of the highest leverage, scientifically backed advice could fit on a postcard.

We’ll highlight five of the most impactful health strategies to help you achieve a long, healthy, and prosperous life.

  1. Prioritize a Nutrient-Dense Diet

Consuming whole, minimally processed foods is like investing in low-cost, passively managed index funds. These foods provide essential nutrients, support longevity, and reduce the risk of chronic diseases. Talk about ROI!

On the otherhand, heavily processed foods are like high-expense ratio investments. Just as high fees can erode your financial returns, a diet heavy in processed foods can undermine your health.

  1. Avoid a Sedentary Lifestyle

Regular physical activity is essential for maintaining cardiovascular health, muscle mass, and overall vitality.

Just as your retirement savings get depleted over time, your physical strength and muscle mass naturally declines (i.e. known as sarcopenia) around age 30 and accelerates after age 60.

Just as starting with a large retirement fund and managing withdrawals carefully ensures financial stability in your later years, maintaining regular physical activity builds a larger base to draw from, ensuring you can maintain the lifestyle and activities you enjoy most.

  1. Get Sufficient, Quality Sleep

If there’s one thing that stands above all others in terms of health optimization, it’s sleep. Quality sleep is the foundation upon which all other health strategies rest.

It’s during sleep that your body repairs itself, balances hormones, consolidates memories, and strengthens your immune system.

Just as a solid financial plan relies on a strong foundation of savings and investments, your health depends on the quality of your sleep. Without sufficient sleep, the benefits of good nutrition, exercise, and stress management are severely compromised.

We’ve written about ways to improve your sleep.

  1. Manage Stress Effectively

Chronic stress is akin to carrying high-interest debt.

It drains your resources, both mental and physical, leading to burnout and a shorter healthspan.

Managing stress effectively allows you to “pay off” this debt, preventing long-term damage and freeing up energy and resilience for healthier pursuits.

  1. Cultivate Strong Social Connections

Just as a diversified investment portfolio protects and enhances your financial security, a rich tapestry of social connections strengthens your overall health.

Maybe it’s that friend who shares your passion for music, another who shares a love for one of your obscure hobbies, and yet another who offers a listening ear when life gets tough.

These varied relationships provide emotional support, mental stimulation, and a buffer against stress, all of which are crucial for long-term well-being.

These relationships, whether they offer laughter, wisdom, or companionship, contribute to a more resilient and fulfilled life, reducing the risk of loneliness and its associated health risks.

Final Thoughts

Maximizing your healthspan is about making smart, high-leverage choices—both in what you do and what you avoid.

Prioritize nutrient-dense foods, stay active, get enough sleep, manage stress, and cultivate strong social connections.

These are your best “investments” for a thriving, vibrant life