Don't lose set you to be a millionaire at least

The ultimate principle for all the invesors should be “Don’t lose your money”, however, it’s not easy.

Table of Contents

What is investment?

In his book “Where Are The Customers’ Yachts?” , Fred Schwed Jr. describes the difference between investors and speculators as:

“Speculation is an effort, probably unsuccessfully, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little.”

Fred Schweder’s definition is very straightforward: investing is getting more money back after a period of time based on the money you initially invested.

Note: “Where Are The Customers’ Yachts?” There is also an early version in Taiwan whose title was translated as “The Real Story of the Stock Market.” This is a stock investment book that I personally highly recommend.

Don’t lose: Buffett’s most well-known aphorisms

This quote from legendary billionaire investor Warren Buffett has become one of his most well-known aphorisms: “The first rule of an investment is don’t lose [money]. And the second rule of an investment is don’t forget the first rule. And that’s all the rules there are.“

What matters is permanent loss

David Iben said it best: “Volatility is not the risk we care about; what we care about is avoiding permanent loss of capital.”

In my post of “The larger the portfolio, the lower the return on investment will possibly be over time”, I mentioned: “Why do famous investors disappear later?” One of the main reasons is that “as long as there is a year’s portfolio return, The rate is extremely low, and it cannot be fully recovered the following year. Most cases will find it difficult to recover, or even never recover from it. “

Closing words

George Soros once said, “It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.”

Don’t lose money when investing. With the accumulation of compound interest over time, it is impossible not to become a millionaire.

Disclaimer

The content of this site is the author’s personal opinions and is for reference only. I am not responsible for the correctness, opinions, and immediacy of the content and information of the article. Readers must make their own judgments.
I shall not be liable for any damages or other legal liabilities for the direct or indirect losses caused by the readers’ direct or indirect reliance on and reference to the information on this site, or all the responsibilities arising therefrom, as a result of any investment behavior.