Making Money Is One Skill, Keeping It Is Another
A producer who lost a hundred million dollars, an investor who went broke and others who came into money suddenly describe how fortunes disappear. They agree that protecting money takes different habits from earning it.
What is the central claim about making and keeping money? Show answer
They are different skills. Earning rewards talent, boldness and luck, while keeping rewards caution, a floor and a small circle.
How did Scott Storch lose about $100 million? Show answer
Through cocaine, cars, yachts and spending to impress others, living far beyond what he had.
What happened to Ray Dalio in 1982? Show answer
After a correct call on a debt crisis, he bet on a depression at the market bottom and lost everything.
What is Dalio's rule about risk? Show answer
You can scratch the car but not total it. Remove the outcomes you could not survive, then go for the upside.
What first practical step does Dalio recommend? Show answer
Calculate how many days, weeks, months or years you could live if no money came in.
What does Dalio call the most common investing mistake? Show answer
Thinking an investment that did well is a good one. What has done well has usually become expensive.
What saved Tony Hawk when skateboarding declined? Show answer
Property his father encouraged him to buy at 17, plus living cheaply and taking every job.
What was Hawk's best financial decision? Show answer
Keeping his video game royalties instead of accepting a half-million-dollar buyout.
How did John B. Allen lose money after his $62 million deal? Show answer
Through other people: contractors who took money without working, and betrayals by some relatives, friends and partners.
What order does John Paul DeJoria give for new money? Show answer
Pay off the house, keep six months of expenses in cash, set aside a base you never touch, then build.
What does Chamath Palihapitiya say wealth does to a person? Show answer
It makes people more of what they already were, so figure out how to be happy before the money comes.
What are the three ways money leaves in these stories? Show answer
Your own spending, other people, and a single concentrated bet. Each needs a different defence.