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TitleThe Geometry of Wealth: How to shape a life of money and meaning
LanguageEnglish
File Size2.6 MB
Total Pages204
Table of Contents
                            Contents
About the author
Introduction: A Story About Three Shapes
Taking Shape
1. Alone Together
2. Adaptive Simplicity
Purpose
3. The Places You Might Go
4. What Matters
5. Yes, Not Really, It Depends
Priorities
6. Setting Priorities
7. Making Decisions
Tactics
8. Gray Matter
9. Four Corners
Shapeless
10. You Are Here
The Geometry of Wealth: Recap
Acknowledgements
                        
Document Text Contents
Page 2

The Geometry of Wealth

How to Shape a Life of Money and Meaning

Brian Portnoy

Harriman House

Page 102

“lost.” But we don’t see them as money squandered. For small sums, we buy
peace of mind. Who doesn’t sleep a little bit better knowing that if such a
catastrophe happened, they’d still be able to put their life back together?
Pascal bought insurance on his soul and was, I’m sure, happy to pay the
premiums.
Investing. In one of the most important investing articles ever written,
“Winning the Loser’s Game,” money sage Charley Ellis argued that most
investors should win by not losing.129 He used the game of tennis to illustrate
his point. For novice tennis players (which is nearly everyone) victory
usually stems from avoiding errant shots and keeping the ball in play. We
patiently capitalize on a competitor’s mistakes; we let the game come to us.
Professional tennis players do something entirely different. They hit the ball
with power and pinpoint accuracy. In tennis, like investing, professionals
strive to be more right, while most others should focus on being less wrong.
Great investors naturally think about being less wrong. Legends like

Warren Buffett, Charlie Munger, Howard Marks, Paul Tudor Jones, George
Soros, and Seth Klarman never flip coins. They patiently wait until the odds
are so stacked in their favor it would be foolish not to bet. They make plenty
of mistakes along the way, but focus on minimizing the damage.
Summarizing the point nicely, George Soros said: “My approach works not
by making valid predictions but by allowing me to correct false ones.” Truly
skilled investors value flexibility, adaptability, and the ability to withstand
losses in order to fight the next day.
Debt. The less wrong mentality reveals a fresh view on why debt or
excessive borrowing is a problem. Yes, rule number one in most personal
finance checklists is: Don’t spend more than you make. We know that.
Nonetheless, many do not heed that advice.130 That’s a problem in the
obvious sense that we’ll have to find some way to come up with the money
to pay back our lenders. But indebtedness also has a ripple effect through our
lives in that it limits our flexibility. Much of our need to calibrate happiness
with our financial wherewithal requires us to adapt to changing or unforeseen
circumstances. By curtailing our ability to adapt, debt makes that dynamic
even harder than it already is. Debt not only puts us in the hole financially, it
also limits our choices and inhibits our ability to be less wrong. Especially
when debt compounds, it forces us to make decisions we wouldn’t have
made otherwise.

Page 103

In setting our main priorities for growing and staying wealthy, controlling risk
comes first. This isn’t the sexy part of money. That comes later. This is the hard
part because it involves a great deal of thought about how we should conduct our
affairs, how we want to risk what we have in order to get ahead.
It’s hard because the rewards for doing this right are almost never visible. At

the protect stage, the rewards are largely non-events, things that don’t happen.
There are no awards or accolades for controlling risk, no shiny new car in the
driveway for exercising prudence. Nonetheless, failure at this stage, failure to
plan for life’s inevitable accidents and mistakes, ensures that we will not be
wealthy, or at best consigns our fate to life’s randomness, where things
arbitrarily work out or they don’t.

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