How to go broke, fast

“Invert, always invert.” Charlie Munger

“All I want to know is where I’m going to die, so I’ll never go there.” Charlie Munger

Sometimes the best way to solve a problem is to invert it and study the opposite. We can apply this kind of thinking in the quest to become a billionaire. What are sure ways to lose money?

One of the best ways to go broke is to use leverage. Leverage is something that has existed for a long time, even though it appears in new forms over the years. It is a way to amplify results, but it is a double-edged sword. It amplifies them both on the way up and the way down. There are many examples of people (and companies) who wanted to get rich quickly and used leverage only to end up broke.

Another way is to invest in the next new great idea. New and hot areas attract ‘investors’ who want to be part of the next big thing. These areas are easy to find because they are in the news and you always hear stories of people getting rich quickly by investing in this new thing. An extra benefit in this area is to be young. Older people usually ‘do not get it’ and can not see how this new idea will change the world and make people rich in the process.

What also works is to chase investments that guarantee a huge return over a short period of time. There are many versions of how to make money fast. The better it sounds the better it is.

If the above three ideas do not seem to work for you, there is always the vast knowledge of the internet. You can find great investment ideas on websites. Just look for opportunities that have many and loud promoters. The more people talk about it, the better it is.

It helps a lot to be in denial. If signs show that your investment has gone wrong, just ignore them. You should not just change your mind. You have put all this money and effort in this. Do not back down now. Surely whatever looks wrong will just go away. Maybe this is the time to put in more.

Always remember Aesop’s advice, “Two birds in the bush are worth more than a bird in your hand.” Especially if it is a new kind of bush that is guaranteed to have plenty of birds and a promoter sits in front of it.