Leave Room for Error - Deepstash
Leave Room for Error

Leave Room for Error

The most important part of every plan is planning on your plan, not going according to plan.

Have room for error when estimating your future returns. For his own investments, Housel assumes the future returns he’ll earn in his lifetime will be ⅓ lower than the historic average. So, he saves more than he would if I assumed the future will resemble the past. It’s his margin of safety.

  • Avoid single points of failure. If many things rely on one thing working, and that thing breaks, you have a catastrophe.
  • The biggest single point of failure is a reliance on a paycheck to fund short-term spending.

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pipge

Total food specialist. Friendly webaholic. Coffee fan. Proud analyst. Tv expert. Explorer. Travel nerd. Incurable beer advocate.

The Psychology of Money is a collection of short stories exploring the strange ways people think about money and teaches you how to make better sense of it.

The idea is part of this collection:

The Psychology of Money

Learn more about moneyandinvestments with this collection

How to develop a healthy relationship with money

How to create a budget

The impact of emotions on financial decisions

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