Every week, I try to share ways to increase your level of happiness and increase your financial independence. This week, I’m changing the formula: here is instead the recipe for a life of misery.
The idea is not mine, but was popularized by the American billionaire investor Charlie Munger, who will celebrate his 100e birthday in January.
“Reverse, always reverse!” he said in a speech a few years ago. This allowed a non-prodigious man like me to achieve prodigious results! »
Warren Buffett’s business partner, Munger says that instead of obsessing about making good moves in life, we should instead focus on avoiding mistakes.
The idea came to him at the age of 19, when he worked as a meteorologist for the U.S. Army during World War II. His role was to communicate his weather forecasts to pilots so that they could adjust their flight plan.
“The question I asked myself was, ‘How can I kill these pilots?’” Munger said. I wanted to know what would be the easiest way to kill them, so I could avoid it. »
He concluded that there were two ways to kill a pilot: send him flying into an area of freezing rain, or send him into an area where he would run out of fuel and be unable to return in time.
“So I became a real fanatic in avoiding those two dangers,” Munger said, adding that he later used this way of thinking often in business and in his personal life.
So here, so we can all avoid them, are some sure ways to live a miserable life.
Spending more than your income
To ensure a life filled with stress, let’s start with the simplest: spending more than your income. It doesn’t matter whether you are a dishwasher in a restaurant or president of the National Bank, living beyond your means will lead us into a dead end that is certain to poison our existence, in addition to reducing our lifestyle. in the long term and add years of compulsory work to our career. A great way to be miserable.
Not being reliable
We all know people who say “yes, yes, yes”, but who, in reality, end up saying “no, no, no”. Committing to doing something and ultimately not doing it raises a flag that is difficult to lower later. This attribute is easy to see in others, but difficult to detect in oneself. For what ? Because we observe the behavior of others from the outside, while within ourselves the justifications are available. For example, other drivers skip a mandatory stop and don’t let pedestrians cross because they are careless and don’t know how to drive. But I skip a mandatory stop and I don’t let pedestrians cross because I’m late. Going from excuse to excuse can only harm us in the long term.
Stress at the slightest problem
The other day, at the café, a customer in front of me was getting impatient and heaving huge sighs because the cashier had prepared his order incorrectly. The man’s face even turned red with anger as she tried to make things right. I couldn’t believe it: this man gave a simple order of coffee the power to control his mood and his physical reactions. In this case it was a coffee shop, but it could have been anything. For example, the weather or the news. Allowing your stress and anger levels to escalate quickly and frequently over all sorts of things beyond your control is a perfect way to live a life of misery.
Want more at all costs
Regularly, the news gives us examples of people who were successful in life, who were admired, respected, and who committed an illegal act and lost everything.
Ambition is a good thing. But always wanting more at all costs can undo everything. “It takes 20 years to build a reputation and 5 minutes to destroy it,” says Warren Buffett. If you think about it, you will do things differently. »
Being extremely ideological
Again, this is easier to spot in others than in yourself. Being extremely ideological leads us to believe that the solutions to problems are simple, and that only our side has them. “Extreme ideology turns the brain to mush,” Munger says. It’s easy to get lost in loyalty. When we start repeating the slogans of the ideology we adhere to, what we are really doing is driving them deeper into our own brain, which will gradually ruin it. We have to be very careful about ideologies. »
Favor social isolation
An American study carried out with nearly 30,000 participants showed that, well before income or lifestyle, what had the greatest influence on satisfaction expressed about life was the number of close friends.
To live a disappointing life, let’s cut ties, stop exchanges and physical activity to devote ourselves entirely to our work. When you combine this posture with the ability to spend more than your income, it forms a perfect storm in which you are certain to invite difficulties and maximize the risk of experiencing regret.
Invest based on the news
Is the Middle East on fire? Interest rates are unpredictable? Does the stock market seem shaky to you? No risk to take: let’s sell everything to find peace of mind. We will return to the markets when the news is calm and serene, and the headlines in the newspapers are zen and more reassuring than a good hot bath scented with eucalyptus… I feel that it is coming. It should happen, right? It’s probably a question of time…
As you will have understood, seeking comfort and security at all costs with your investments is an often verified way of obtaining disappointing returns. A great opportunity to ensure a life of misery.
Or, said in the more colorful words of Charlie Munger: “To get what you want, you have to earn what you want.” The world isn’t yet a crazy enough place to reward a whole bunch of people who don’t deserve it. »
Your snowball
I asked you last week if you benefited from the power of compound interest on your investments.
Francis writes: “The stock market streak from 2019 to 2022 was so exceptional that my index fund portfolio tripled in value, including my contributions. I should make $70,000 per year in returns on average, which means that my contribution now has less and less importance in the snowball. »
Alain writes: “From 0 to $100,000 in 15 years, we see nothing, only tremors. From $100,000 to $500,000 in 20 years, the beginnings are there, we can see that it will move a little more, but we are not yet sure. From $500,000 to over a million in five to seven years, I didn’t see anything, it happened very, very quickly. Then, you have to live without looking too much, be detached, rest your mind. »