I’m convinced that about 90% of any profession can be learned within three years. It’s the remaining 10%—those rare, defining moments—that can take decades to fully understand. These 10% moments are the seeds of true experience and wisdom, and I make a point of trying to write them down.
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.” 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.
1. Let optimism be your default setting.
Today is better than yesterday, but not as good as tomorrow will be. Edwin Land, the founder of Polaroid, is credited with saying, “Optimism is a moral duty.” What an amazing character trait to possess. Writer and investor Morgan Housel tweeted, “Optimism often sounds like a sales pitch, pessimism sounds like someone trying to help you.” This is because optimism seems to imply unbridled risk taking while pessimism seems to imply risk avoidance. Since most people are generally optimistic, those who present a pessimistic view of the future are often assumed to possess special insights, which make them more believable or credible sounding. But optimists can elevate any room they walk into. Pessimism and “doom and gloom” masquerade themselves as wisdom, when in reality the opposite is true. Like Mark Twain said, “There is no sadder sight than a young pessimist.”
2. A good strategy that you can stick with through short-term moments of extreme uncertainty and fear is far better than a perfect strategy that you can’t maintain over the long-term horizon.
People always say they are long-term investors, but they consistently live in the short-term. While long-term results are what truly matter, reaching them requires navigating a series of short-term challenges. A good strategy that you can stick with during those short-term moments is far better than a perfect strategy that you can’t maintain. Our flaw is that as humans, when we visualize the future and stock market losses, we imagine ourselves in some hypothetical world where the only thing that has changed for the worse is the stock market. But stock market drawdowns do not exist in a vacuum. What we cannot visualize is the state of the world that causes that stock market downturn and how it feels to live through moments where the headlines are filled with World War III jargon, pandemics, inflation, and civil unrest.
3. The investing world is full of sunshine patriots.
A “sunshine patriot” is a term used to describe someone who shows support or loyalty to a cause only when it is easy or convenient, but abandons it when difficulties or challenges arise. In investing and financial planning, an above average ability to cope with misery is a core principle that will govern most of your long-term results. It is the most fundamental of all investment principles. Investor Morgan Housel writes, “Returns do not come for free. They demand a price, and they accept payment in uncertainty, confusion, short-term loss, surprise, nonsense, stretches of boredom, regret, anxiety, and fear. Most markets are efficient enough to not offer any coupons. You have to pay the bill.” As Kelly Hayes said, “Everything feels unprecedented when you haven’t engaged with history.”
4. Intelligence alone doesn’t ensure financial success.
As Warren Buffett once said, “Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.” I’ve encountered many highly educated individuals who struggle as investors. While they may be wonderful in the operating room or leading a team of engineers, their inability to control their own emotions and biases leads them down the road of sub-optimal results because they can’t help themselves from tinkering or trying to assert control. Emotional intelligence and knowing oneself are far more important than IQ or your previous accomplishments. As Tolstoy said, “The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows them already.”
5. Your lived experiences shape how you perceive risk.
The amount of risk you should take depends on your need, willingness, and ability to bear that risk. In other words, this comes down to things like your stage in life, time horizon, circumstances, and goals. However, your willingness to take risks is often driven more by your personal experiences than by math or rationality. If you worked at Enron and lost everything when it declared bankruptcy, or had your equity wiped out during the financial crisis or the crash in 1987 (or going back further, lived through the Great Depression and WWII), your appetite for risk is likely to be permanently affected.
6. Simple beats complex.
It’s never been easier to jam private equity, private credit, hedge funds, commodities, options, and other alternative or esoteric assets into a portfolio or plan. These things always sound amazing, and they’ll make you sound smart over cocktails, but simple beats complex. Just look at the returns of endowments and foundations whose billions of dollars get them entre into the most esoteric investment opportunities in the world. Yet they consistently trail a simple 60/40 portfolio over nearly any time period.
7. Fast, Good, Cheap. You pick 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.
8. Delegation is a sign of strength not weakness.
If you have been managing your portfolio for your entire life and have been effectively acting as the family CFO for the last 80 years, it is a sign of strength to let go of the reigns. Delegation is a sign of strength because it demonstrates confidence, trust, and a willingness to empower others. It shows that you are secure enough in your own abilities to acknowledge that you don’t need to do everything yourself. It also sets your heirs or spouse up for success sooner rather than later.
9. 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 spend the money.
My grandfather was a stone mason his entire life. His stonework is all over central New York. He probably never made more than $50,000 a year. It wasn’t his income, but his income-to-expense ratio. For my grandpa, $50,000 made him a rich man because he maybe spent $38,000 and it was enough to make him happy. It was enough for him to build a tiny cottage on the St. Lawrence River where he would duck hunt and fish and eventually host my siblings and I every summer of our childhood. One summer as a young kid I remember catching a very large Walleye. As I returned to the dock in our tiny rowboat the first words out of my grandpa’s mouth were, “We are going to get that fish mounted.” A few weeks later, going to pick the fish up from the taxidermist, I remember watching my grandpa fork over a check for $500. That was a ton of money for him…but he spent it. Even though he’s long passed, the Walleye is still on the wall of the tiny fishing cottage that he built. Now I bring my kids there. He chose to spend the money.
10. Don’t let the tax tail wag the life dog.
I’ve met clients who seem more willing to lose money than to pay taxes. While taxes are an important factor in financial decisions, they shouldn’t dominate your life. Sometimes, you just have to pay the tax and move on. Many people go to great lengths—and expense—trying to outsmart the tax system. They hire costly accountants and lawyers, chase deductions and credits, and overcomplicate their strategies with tax-deferral schemes. For some, the idea of paying taxes feels worse than actual investment losses. The irony is that these elaborate tax-avoidance efforts can backfire, often resulting in worse financial outcomes. As Charlie Munger wisely said, “Trying to minimize taxes too much is one of the great causes of really dumb mistakes in investing.”
11. Things are always clear in hindsight.
It’s almost impossible to remember how uncertain things were in the past when you know how the story ends. Trends, investments, cycles, historical events…these are all perfectly clear when put in a narrative format, but life doesn’t work like that. Just read Dwight Eisenhower’s draft letter informing the free world that the landings at Normandy on D-Day were a failure (obviously we know that D-Day was a success). He had no idea if the invasion would be successful. So, if you missed buying Apple at its IPO or Amazon in the trough of the Dot Com Bust, give yourself a little grace and move on. As Ian Wilson wrote, “No amount of sophistication is going to allay the fact that all your knowledge is about the past and all your decisions are about the future.”
12. Investing and growing wealth is hard.
In fact, anything worth doing is hard. There is no hack. Shane Parish wrote, “Ninety percent of success can be boiled down to consistently doing the obvious thing for an uncommonly long period of time without convincing yourself that you’re smarter than you are.” I’m convinced that the people who build wealth slowly over the course of their careers are far better equipped to handle money than those who come into it easily.
13. A 70% plan executed now is better than a 100% plan executed too late.
We do not have a crystal ball. Our world is filled with imperfect information. Accept that there are unknown unknowns and make the best decision possible. Making no decision is a decision in and of itself. I call this “analysis paralysis.” As writer Nick Maggiulli says: “This is how to not panic. You know history. You understand the risks. And, most importantly, you know yourself. Then you let the chips fall where they may. You don’t obsess over the headlines. You don’t try to predict the future. You enjoy your life. You go out with friends and family. You make cherished memories. You laugh. You cry. You remember that things like this happen. And you remember that they will happen again.” Remember waiting for perfection is really just procrastination.
14. Be prepared to destroy your own best-loved ideas.
Don’t be an idealogue. “Part of the reason I’ve been a little more successful than most people is I’m good at destroying my own best-loved ideas,” Charlie Munger told the Wall street Journal in 2019. “I knew early in life that that would be a useful knack and I’ve honed it all these years, so I’m pleased when I can destroy an idea that I’ve worked very hard on over a long period of time. And most people aren’t.” 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. The more adaptable and open-minded you are, the harder it is for AI to mimic your thinking.
15. Be wary of billionaire advice.
I believe you should tune out what most billionaires and legendary hedge fund managers think about the markets. These people don’t share your circumstances, time horizon, or risk profile. They don’t know your cash flow situation or family dynamics or financial plan. Why should you take investing advice from them? I’ll be the first to admit that these individuals are wildly fascinating and brilliant people. But holding onto every word that comes out of their mouths like investing gospel is a fruitless effort. I’ll make an exception here for Warren Buffett and Charlie Munger whose underlying principles and writing are wonderful guides (they also consider themselves teachers before investors). As Morgan Housel wrote, “A lot of financial mistakes come from trying to copy people who are different from you. So be careful who you seek advice from, be careful who you admire, and even be careful who you socialize with. When you do things quietly you’re less susceptible to people with different goals and personalities than you telling you you’re doing it wrong.”
16. Being rich and being wealthy are two very different things.
Being rich and being wealthy are two different things. I’ve known many people with substantial financial assets who are still deeply unhappy. On the other hand, I’ve met individuals who wouldn’t qualify as “rich” by traditional standards, yet they are extraordinarily wealthy in the ways that truly matter—rich in time, relationships, fulfillment, and a sense of purpose. Wealth is about more than just numbers on a balance sheet; it’s about living a life that aligns with your values and brings you joy. True wealth encompasses financial stability, but it also includes health, meaningful connections, and the freedom to live life on your terms.
17. No one is immune from being humbled.
There’s a strong temptation to believe that risk or catastrophic loss is something that happens to other people. It’s others who get unlucky, make poor decisions, or fall victim to the pull of greed and fear. But Me? No, we tell ourselves—we’re different. This false confidence only makes the inevitable reality all the more jarring. Remember, competence breeds confidence. Confidence breeds complacency. Complacency breeds catastrophe.
18. Age is a mindset.
At some point, your physical age and mental age may converge, but until then, age is truly what you make of it. I’ve met 90-year-olds who are vibrant and full of life—they’re lifelong learners who read, travel, socialize, and embrace new experiences. Their world remains open and expansive. Conversely, I’ve met 40-year-olds who have already become stagnant, with their horizons narrowing. The key is to keep learning and stay active. A body at rest tends to stay at rest, while a body in motion stays in motion.
19. Almost every decision we make is a two-way door.
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.
20. Money is personality leverage.
Money has an amplifying effect on who you are; it doesn’t fundamentally change your character but rather magnifies your existing traits and tendencies. If you’re generous, having more money gives you more opportunities to be philanthropic, to support causes you care about, and to help others in meaningful ways. If you’re cautious, wealth will likely make you even more risk-averse, focusing on protecting what you have rather than chasing new opportunities. If you’re ambitious, money can fuel bigger and bolder pursuits, offering the freedom to take risks and make bets that wouldn’t be possible otherwise. However, this leverage can cut both ways. For someone with bad habits or a problematic personality, more money can magnify those flaws. Recklessness can turn into destructive behavior, vanity can evolve into narcissism, and insecurity can morph into obsessive control. It’s why winning the lottery can sometimes ruin lives—it doesn’t change who someone is, but instead gives their impulses free rein.
21. It doesn’t matter how much money you have, people just want to know they are going to be okay.
It doesn’t matter how much money you have; at the end of the day, people just want to know they’re going to be okay. It’s the only question that truly matters. 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 opinions and reflections presented in this document are personal observations and are not intended as financial advice. The ideas shared are based on personal experiences and may not be applicable to every individual or situation. Investment strategies, risk tolerance, and financial planning should be based on each person’s unique circumstances and goals. This document does not constitute a recommendation or solicitation to buy or sell any securities or adopt any investment strategy. The concepts discussed are for informational purposes only and should not be used as a substitute for professional financial advice. Before making any financial decisions, you should consult a qualified financial professional to determine what is suitable for your personal situation. The quotes and references from third-party authors are provided for context and illustrative purposes. These references do not constitute an endorsement or recommendation by the author or any affiliated firm. While the information provided is believed to be accurate at the time of writing, it may become outdated or superseded by new information. Always verify current facts and market conditions before making any financial decisions. All investment strategies carry risk, including the potential loss of principal. Past performance is not indicative of future results. Financial markets are unpredictable, and there is no guarantee that any strategies discussed will achieve the desired outcomes. Please consider your own risk tolerance, time horizon, and financial goals before making investment decisions.
