In his book Succeeding, author John Reed writes, “When you first start to study a field, it seems like you have to memorize a zillion things. You don’t. What you need is to identify the core principles – generally three to twelve of them – that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles.” (source: https://collabfund.com/blog/the-four-fundamental-skills-of-all-investing/) That’s why I reflect on the lessons I’ve gathered along the way. What follows is a collection of insights I’ve captured over the years.
- Let optimism be your default setting. Optimism isn’t naïve—it’s powerful. Edwin Land said, “Optimism is a moral duty.” Pessimism often sounds wise, but as Mark Twain wrote, “There is no sadder sight than a young pessimist.”
- A good strategy you can stick with usually beats a perfect one you can’t. Most people say they’re long-term investors—until the short term tests them. Markets don’t tend to fall in isolation; they tend to fall during broader chaos. As Morgan Housel wrote, “Returns do not come for free. They demand a price—paid in uncertainty, confusion, and fear.”
- Temperament usually beats intelligence. Buffett said, “What you need is the temperament to control the urges that get others into trouble.” In my opinion, knowing yourself and having emotional discipline is more important than a 230 IQ.
- Your experiences shape your risk tolerance. Risk isn’t just math—it’s memory. Those who’ve lived through crashes, bankruptcies, or recessions carry permanent emotional scars that shape how they invest.
- Simple beats complex. Fancy strategies sound smart when you are having cocktails, but according to Institutional Investor Magazine even elite endowments often trail a basic 60/40 portfolio according to the publication. Complexity can be the enemy of consistency.
- Fast, good, cheap—you only get two. If you want it fast and good, it won’t be cheap. If you want it good and cheap, it won’t be fast. If you want it fast and cheap, it won’t be good. In any spending or life decision, you can’t have all three, so choose the two that matter most to you.
- Delegation is strength, not weakness. Letting go shows confidence and prepares others to succeed.
- Spend money where love and experience overlap. Draw a Venn diagram. On one side write “people you love” and on the other side write “experiences.” If these two circles intersect with any financial decision, always consider spending the money.
- Don’t let the tax tail wag the life dog. Taxes matter, but they’re not everything. As Charlie Munger said, “Trying to minimize taxes too much is one of the great causes of really dumb mistakes.”
- Hindsight is always clear. Eisenhower drafted a letter assuming D-Day failed—proof that certainty only exists in retrospect. Give yourself grace for the things you didn’t foresee.
- There is no hack. Success comes from “doing the obvious thing for an uncommonly long period of time,” as Shane Parrish wrote.
- A 70% plan executed now beats a 100% plan too late. Accept imperfect information, act, and move forward. Waiting for perfect clarity is procrastination. Making no decision is a decision in and of itself.
- Destroy your own best ideas. Munger said, “I’m pleased when I can destroy an idea I’ve worked hard on.” Stay flexible. Adaptability is a competitive edge—even against AI. If you’re worried about AI taking over the world, my advice is simple: become someone AI would struggle to replicate. Cultivate a diverse set of perspectives, embrace unconventional ideas, and avoid becoming attached to any single belief or approach. As a general observation, the more adaptable and open-minded you are, the harder it is for AI to mimic your thinking.
- Be wary of billionaire advice. Their circumstances aren’t yours. Buffett and Munger are exceptions because they teach principles, not tactics.
- Rich and wealthy aren’t the same. Rich is about money; wealth is about freedom, relationships, and purpose. True wealth is living on your own terms.
- In my opinion, no one is immune from being humbled. In the Army we used to say competence breeds confidence. Confidence breeds complacency. Complacency breeds catastrophe.
- Age is a mindset. I’ve met 90-year-olds full of life and 40-year-olds who’ve already stopped growing. Keep learning and moving.
- Most decisions are reversible. Jeff Bezos distinguishes between two types of decisions: Type 1 and Type 2. He calls them one-way doors and two-way doors. Type 1 decisions are high-stakes, irreversible choices that require careful deliberation because they have significant consequences. Once made, they are difficult or impossible to reverse, like walking through a one-way door. These decisions demand a thorough approach since there’s no easy way back. Type 2 decisions, on the other hand, are more like revolving doors. They are low-stakes, reversible choices that can be quickly adjusted or undone if they don’t work out. The key is recognizing which kind of decision you’re facing. Almost every decision we face in life is a Type 2 decision or a two-way door. Don’t confuse the them.
- Money is personality leverage. It magnifies who you already are—for better or worse.
- Most people just want to know they’ll be okay. Regardless of the amount of zeros on the spreadsheet, that tends to be the real goal—peace of mind. The search for financial security isn’t really about the zeros in your bank account; it’s about the sense of peace those zeros represent.
Disclosures: The views expressed in this communication reflect the personal opinions of the author and may not necessarily represent the views of Howe & Rusling, Inc. The opinions expressed are for general informational purposes only and are not intended to provide—or should not be relied upon for—specific investment, accounting, legal, or tax advice. Nothing contained herein should be considered a guarantee of any particular outcome or investment result. Any references to personal beliefs, opinions, or experiences are solely those of the author. This material is not intended as a recommendation to invest in any particular strategy, security, or investment product. Discussions of investment philosophy, behavioral finance, or decision-making principles are illustrative in nature, based on the author’s personal experiences and observations, and may not be appropriate for all investors. Past performance is not indicative of future results. All investing involves risk, including the possible loss of principal. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment, strategy, or philosophy will be profitable or suitable for any investor. Forward-looking statements, including views on markets, risk, taxes, financial planning concepts, or general economic expectations, are based on current opinions and assumptions and are subject to change at any time without notice. Actual future results may differ materially. No reliance should be placed on any forward-looking statement or forecast. Any third-party quotations, references, or citations—including material attributed to John Reed, Edwin Land, Mark Twain, Warren Buffett, Charlie Munger, Morgan Housel, Shane Parrish, Jeff Bezos, or others—are provided solely for informational and educational purposes. Howe & Rusling, Inc. does not endorse and is not affiliated with the authors, publications, or organizations referenced. The reference to Institutional Investor Magazine and the link provided are used under fair-use principles for educational discussion. Howe & Rusling, Inc. does not guarantee the accuracy or completeness of third-party data, statistics, or publications. The author was not compensated by any third party for the opinions expressed, and Howe & Rusling, Inc. did not pay for placement in any media outlet, publication, or online platform where this material may appear. This content does not take into account the specific objectives, financial situation, or needs of any particular individual. Readers should consult a qualified financial professional before making any financial decisions. Howe & Rusling, Inc. (“H&R”) is an SEC-registered investment adviser. Registration with the SEC does not imply a certain level of skill or training.
