The Geometry of Wealth

"Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world."

- Charlie Munger

"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."

- Charlie Munger

Insight: Great investors like Charlie Munger never flip coins, they wait patiently until the odds are stacked so far in their favour, it would be foolish not to take action. Mistakes are made, but steps are taken to minimise the damage.

"Invert. Always invert."

- Charlie Munger

Principle: Think critically. Think differently, from the opposite point of view.

"We tend to buy things ... where we don’t know exactly what will happen, but the outcome will be decent."

- Charlie Munger

Principle: Accept that investments (and life) is uncertain, remain humble, do your best to ensure your decisions leave you in a decent spot.

"The first rule of compounding: Never interrupt it unnecessarily."

- Charlie Munger

Insight: Compounding applies to the good (wealth, exercise, healthy lifestyle) and the bad (debt, poor habits) - time will have an exponential impact.

• Definition: We prefer things simply because we own them.
• Insight: We tend to like and hold on to what we already own. This bias can lead to unbalanced investment types, where we stick with or overvalue what we already have and know.

"Nothing is enough for the man to whom enough is too little."

- Epictetus

"He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has"

- Epictetus

• Definition: "Human flourishing" - the realisation of the best version of one's self.
• Reference: Aristotle believed the Greek view that the highest human good is eudaimonia.
• Reference: Aristotle did not agree with the hedonistic definition of happiness, the pursuit of pleasure and avoidance of pain, as championed by Epicurus and others around the 4th century BCE. He believed that living a virtuous life was linked to true happiness.
• Reference: Daniel Kahneman: experienced happiness moulds our minds over time and is thus important to focus on.
• Reference: Marty Seligman: experienced and reflective happiness are both key to truly flourish.
• Insight: Eudaimonia is a response to the question "what is the best way to live?".
• Insight: From Aristotle's perspective, happiness is a action more than it is a feeling. Therefore happiness is a skill.
• Insight: Happiness from Aristotle's perspective requires reflection of whether one has lived up to their potential. A "good life" encompases virtuous pursuits.
• Insight: Experienced Happiness vs Reflective Happiness: Experienced happiness relates to our feelings - the hedonistic approach to happiness, through our System 1 fast brains; Reflective happiness is more in line with eudaimonia - the deeper sense of fulfillment that requires System 2 introspection.

• Insight: We grow accustomed to good and bad, and do so more quickly that we anticipate.
• Insight: Experienced happiness is often fleeting.
• Insight: Hedonic adaptation means that we are poor at making decisions about our future happiness.
• Insight: Experiences rather than things are more immune to hedonic adaptation - we can mentally revisit them in ways that we can't with material things.

• Definition: The weight of now.
• Example: We are comfortable with impulses because the perceived value of the future declines quickly.
• Insight: We value the future less than the present.
• Insight: Hyperbolic discounting is a key factor in why we are poor predictors of what will make us happy in the future.
• Reference: Dan Gilbert: we "stumble on happiness" because we don't know where to look for it.

• Insight: There is a limit to the finding that increased choice leads to increased happiness - there are diminishing returns to choice.
• Insight: There are tipping points where too much choice can undermine happiness.
• Reference: Psychologist Barry Schwartz: we crave more choices but the more we have the more unhappy we become.

• Definition: The Rule of 72 tells you how long it will take an investment to double, given a fixed compound interest rate.
• Example: Number of years for investment to double: 9 years at 8%.
• Insight: Money invested for a long time, even at a relatively low rate will produce huge gains over time.
• Insight: The rate of scaling accelerates over time.

"The miracle of mindfulness is, first of all, that you are here."

- Thich Nhat Hanh