My First Million
The best business ideas come from noticing what's working and doing it better, faster, or for a different audience.
“I've lost more money than most people have ever made”
What It Means
Having significant wealth allows for making bigger mistakes in absolute dollar terms, even if they're small percentage-wise
Why It Matters
Provides perspective on risk tolerance and the psychological impact of wealth on decision-making
When It's True
When someone has achieved significant wealth and made large absolute dollar mistakes through investing
When It's Risky
Could encourage reckless behavior or minimize the real impact of poor financial decisions
How to Apply
Remind yourself that mistakes are part of investing when you have sufficient wealth
Keep losses in perspective relative to total net worth
Use as reminder that even successful investors make costly mistakes
Example Scenario
“Investor loses $500K on a bad stock pick but realizes this is only 5% of their portfolio, helping them maintain perspective and not make emotional decisions.”
Related Knowledge
Wealth Preservation Framework
A conservative investment approach focused on maintaining purchasing power and reducing stress rather than maximizing returns, typically used after achieving a significant financial milestone.
Second Derivative Spending Rule
A cash management principle where you never spend business income directly, but only spend the investment returns generated from that business income.
Investment Thesis Litigation Framework
A systematic approach to evaluating competing investment or business theories by collecting multiple expert perspectives and weighing evidence like a legal case.
Systematically evaluate and optimize personal investment allocation through peer feedback
Clear understanding of current allocation, identification of blind spots, actionable feedback from trusted peers, and refined investment strategy aligned with goals.
Convert entrepreneurial success into sustainable long-term wealth
Financial independence where investment returns can fund lifestyle indefinitely without touching principal, plus continued income from new ventures.
Personal Capability as Safety Net
Viewing your own skills, knowledge, and earning ability as the primary financial safety net rather than relying solely on savings or investments.