Three Ways To Ruin Your Financial Life

One of the most powerful ways to think that I picked up from Charlie Munger was this: reverse engineer everything. There are generally two ways to do this: first, you determine the outcome you want, and then you break down the steps in reverse order that would be necessary to get you there—and voila!—you suddenly have a blueprint to fulfill a particular dream.

The other approach involves finding happiness by avoiding misery. This means that you identify the life outcomes that you want to avoid, and then you draw up a path that would lead to those undesirable outcomes, so that you can catch yourself if you find yourself drifting in that direction.

For instance, the three leading causes of bankruptcy are:

(1)   Divorce.

(2)   Job loss.

(3)   Health problems.

If you want to be financially miserable, those are three great ways to get you … Read the rest of this article!