1. How Fortunes Are Lost

    If you’d asked me as a kid how rich people became poor, I’d have said by spending all their money. That’s how it happens in books and movies, because that’s the colorful way to do it. But in fact the way most fortunes are lost is not through excessive expenditure, but through bad investments.
     
    It’s hard to spend a fortune without noticing. Someone with ordinary tastes would find it hard to blow through more than a few tens of thousands of dollars without thinking “wow, I’m spending a lot of money.” Whereas if you start trading derivatives, you can lose a million dollars (as much as you want, really) in the blink of an eye.

    There are many types of bad investments. The worst kinds are those in yourself and those in the people you surround yourself with.

    http://www.paulgraham.com/selfindulgence.html

    2. 10 months ago