December 2024
How I think about personal finance
I’ve been re-reading Kahneman’s Thinking Fast and Slow, and the gist is that the only defense against poor decisions is rules, processes and algorithms. So I’ve been thinking of three rules around personal finance. Don’t Lose Money Warren Buffett said that the first (and really only) rule of investing is don’t lose money. Studies by Kahneman and Tversky1 have shown that people hate losing $10 more than they like winning $102.
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