Welcome to Wise & Wealthy: A weekly newsletter full of proven ideas to become smarter and wealthier. I send this every Monday and every other Thursday.
#20 – July 25, 2022
Note: My online class, Simple Investing, is open for registration now. Join here.
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When I wanted to try out something new, I would often search for its benefits. For example, when I first started running, I’d google, “what are the benefits of running every day?”
When you only search for the benefits of something, you risk overlooking the negatives, which can be costly.
The investor Charlie Munger has a different way of looking at things. He does that by thinking backward.
”The mental habit of thinking backward forces objectivity – because one of the ways you think a thing through backward is to take your initial assumption and say, ‘Let’s try and disprove it.’
We become aware of potential bad outcomes by “disproving” our own thoughts. One way to do that is to invert your questions. For example: Let’s say you want to get more things done.
You can ask the usual question: “How can I be more productive?” Then invert that to: “How am I currently wasting time and effort?”
This is a great mental model for looking at challenges, goals, and desires.
I’ve been an NBA fan since I was a child. One of the main ideas in basketball is that players sometimes can get a “hot hand.”
I also experienced this when I played basketball in high school. My scoring average was around 8 points a game. But I had one game when I scored 40 points! I just couldn’t miss.
But my hot hand was gone by the next game. The same thing happens in other areas of life as well.
When you invest during a bull market, you might experience a hot hand. You feel like a winner on every investment or trade. Nothing seems to go wrong.
As they say, during bull markets everybody is a genius… Until they’re not.
While hot streaks certainly happen, they never last. Relying on streaks is simply not sustainable if you want to build long-term wealth.
In my latest article, I share the 3 most important investing fallacies that every investor needs to know.
One interesting thing
Over the last few years, I’ve been getting questions from people who want to get started in the stock market.
Many don’t get started because they’re confused about the conflicting advice all over the internet. And the fear of losing money keeps them from investing. I understand because I’ve been there too.
That’s why I created my latest course, Simple Investing. With the right mindset and strategy, anyone —even if you have no prior experience — can build wealth by investing in stocks.
Learn more about the course here: members.dariusforoux.com/simple-investing/
Thanks for reading! I hope you found this edition of Wise & Wealthy useful.
All the best,
Join the 7-day Stay Centered challenge
I’ve created a one-week email course that you can do together with a group. It’s called Stay Centered, and it will help you to reclaim focus and live a meaningful life.
When you’re centered, nothing can hurt you. You will have inner peace no matter what happens.
How to unlock Stay Centered
You can join the challenge for free. Every day, you’ll receive a short email with a small challenge that inspires you to live better.
I highly recommend sharing it with your friends so you can go through the program together. I did it with my team, which was a lot of fun.
Join here: dariusforoux.com/stay-centered