How to Ensure Financial Misery

One of Charlie Munger’s famous speeches is “How to Live a Life of Misery.” Rather than tell graduates how to live happily, he delivered the opposite message. Because if you avoid life’s surefire miseries, what’s left but happiness? Right!?

Munger was famous for quoting famous mathematician Carl Gustav Jacobi (as in, “Jacobians” in vector calculus) who said,

“Invert. Always invert.”

Jacobi

Some math problems, quite simply, are easier to solve if you turn them inside-out.

Today we’ll do the same, but for personal finance and investing. What follows are my best recommendations for living a poor (in every way) financial life.

Spend More Than You Earn

You want to go further into debt with every passing month. The surefire way to do so is by spending more than you earn. Slide further and further down that slippery slope.

Never Measure. Stay Blind.

Though, you shouldn’t be aware that you’re sliding into debt. Because you should never actually measure your personal finances.

Don’t track your income and spending. Don’t track your assets nor debts.

Stay blind.

Ignore Safety Nets

Never ask yourself, “What’s the worst that could happen?”

But if you do ask that question, don’t answer it. Or you can certainly ignore whatever answer you come up with.

Emergency funds, various types of insurance, retirement savings…ignore them all. Who needs a safety net if they stay perfectly balanced forever?

Poke Holes in The Bucket

If a bucket of water represents your financial life, you want to poke holes in it. Lots of holes. And big holes. You want water to drain from that bucket as soon as you fill it.

What kind of holes? Overspending. Large debt interest payments. Irresponsible investing. The less thought here, the better.

Side quest: can you carry a balance on 10+ credit cards simultaneously?!

Gamble. Preferably With Bad Odds.

I won’t stop you from gambling at the casino. You’ll definitely lose money in the long run. Good work!

But you can gamble in other ways, too. For example, you could try day-trading stocks. Very few people have the combination of temperament and intelligence to do it well. Perfect! I bet you’ll lose lots of money that way.

Concentrate!

Be careful of the double meaning here. Your brain, ideally, should not concentrate. Instead, remain as distracted as possible at all times.

But your assets should be very concentrated. Pick one thing – a single stock, a particular commodity, a digital “coin” of a dog – and throw all your money at it. If possible, borrow more money to invest (a.k.a. use leverage)

Think Short-Term

Zoom in! Watch lots of CNBC. What’s happening today, and what’s the biggest possible reaction you can have to that news? Forget long-term signal. Focus instead on short-term noise.

The more you focus on the short-term, the more likely you’ll bring your emotions into your decision-making. Excellent! Nobody has ever made a stupid decision while emotional.

Ignore Experts. Follow Charlatans.

This one, admittedly, grows harder by the day. Our modern world is a noisy place. How can I find a true charlatan, while ignoring those pesky experts?!

Here are some signs you’re dealing with a sure-fire charlatan who will lead you astray:

No credentials, an unverifiable background, and inflated titles Too good to be true, grand promises, and overconfidence Vague explanations, avoidance of questions Pressure sales tactics, emotional manipulation An overall lack of substance

Who has time for tried-and-true financial principles delivered in calm voices by academics or CFP and CFA professionals?!

My cousin’s bowling partner just posted a meme on Facebook. I’m listening to him instead!

Get Sad

I hope you’ll follow these tips to ensure your life of financial misery.

Or, instead, you could follow the steps of Munger, Jacobi, and, dare I say, Cramer: Invert. Always invert.

Take the laughs for what they are. But take my tips above and do the exact opposite.

Thank you for reading! If you enjoyed this article, join 8500+ subscribers who read my 2-minute weekly email, where I send you links to the smartest financial content I find online every week. You can read past newsletters before signing up.

-Jesse

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