How to Ruin Your Financial Life

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Road to Ruin: A Doctor’s Prescription for Poverty & Misery

This post is a tribute to the late, great Charlie Munger. Charlie was Warren Buffett’s right-hand man and friend for over sixty years. He passed away in 2023, just one month shy of his 100th birthday.

He often spoke about the value of acquiring and using “worldly wisdom.” Our thinking suffers from a lack of understanding of basic mental concepts.

He also preached the importance of thinking in a systematic, rational way. The German mathematician Carl Jacobi created one of Charlie’s favorite thinking tools.  Jacobi was famous for advising, “Man muss immer umkehren.” “Invert, always invert.”

Charlie gave an example to illustrate how this works. “What is the way to best help India’s economy?” Instead, he would ask, “What action would likely destroy India’s economy?”

“How do I take the smartest path?” becomes “What path would be foolish?”

You ask, “What’s the best way to end up rich and happy?” I ask, “What’s the best way to end up in poverty and misery?” From that, true wisdom and guidance will appear. If you avoid the worst paths, you will come way ahead.

Welcome to a unique journey through the land of financial mishaps! This tongue-in-cheek guide will explore how to sabotage your financial health expertly. Let’s turn sound financial advice on its head and see what happens. When you do everything wrong, you sabotage your financial health.

1. Envy: The Green-Eyed Monster in Finance

Envy makes you chase others’ financial shadows, leading to irrational decisions. Forget your own goals; always try to outdo your neighbor! Set up notifications on your phone for all social media accounts. This guarantees you can compare your miserable life with all the cool stuff others are doing. Comparing yourself to others gives you the drive to improve. Envy can serve as fuel.

2. Greed: More is Never Enough

Why settle for balanced investments when you can risk it all for immediate gains? Long-term planning is overrated when greed rules your wallet. Never be satisfied with what you have. Why should you be grateful for the pittance you have? There are big-time ballers out there with hundreds of millions of dollars. Don’t go home and relax with your family until you reach centamillionaire status. Greed is good.

3. Marry any Fun Hottie 

If you meet someone who is both fun and hot, marry them. What else could you want in a partner? They will look good, others will be jealous, and you will love coming home from work every day. You only live once.

4. Spend Your Earnings: The Fast Track to Empty Pockets

Live well beyond your means. Budgets are for the cautious, and you’re a financial daredevil!  Money is meant to be spent. So many people make themselves miserable in the present, trying to save for a future that may never exist. Don’t delay your gratification, especially since you could get cancer or die young. Believe that buying things brings lasting happiness. Ignore those saying that true financial joy comes from security. Shiny new gadgets cause joy.

5. Ignoring Catastrophic Risks: Playing with Fire

Why worry about emergencies? Ignore insurance and emergency funds. After all, what could go wrong? Even if something goes wrong, you cannot know what that will be or when. How could you predict the future? You can’t. Why turn over your hard-earned cash to insurance companies? Insurance is a dumb rip-off.

6. Saving Sporadically: A Recipe for Insecurity

Save when you remember or see extra money in your account. Consistency in savings is for the cautious. It is okay to set some money aside if there is a lot left over. But if not, don’t sweat it. You can save in the future. Or you will get an inheritance, rebate, lottery, etc. So why suffer and scrimp now? Enjoy Raises and Bonuses. Spend any extra income immediately. Saving or investing bonuses is too sensible.

7. Lack of Planning: Navigating Without a Map

Financial plans are for the unimaginative. Wing it and let fate decide your financial future. Nobody can predict the future. Yet fools keep trying to plan everything out. Don’t waste your time. Go to work today and do what you want. The future will work out somehow.

8. Overuse of Leverage: Drowning in Debt

Debt is your friend. Max out those credit cards and loans! More debt equals more fun, right? Debt is what created our entire modern society. You can’t buy a house, business, or car without debt. In business school, I learned about advanced techniques for boosting investment returns. They all involve “leverage” – the secret word for debt. More is better.

9. The Mansion Trap: Living in a Money Pit

Buy the biggest house you can’t afford. The financial strain is worth the envy of others. Your bank will ensure they don’t give you more mortgages than you can handle. They are experts, so you can rely on them when they say you can afford a bigger house.

10. Not Negotiating: Leaving Money on the Table

Never negotiate salaries or prices. Accept whatever is offered; assertiveness is overrated. We are educated professionals, not greasy salespeople. Arguing and hassle over every dollar on a price or contract is unbecoming. You will make plenty of money no matter what.

11. Speculation Over Investment: The Gamble

Forget informed investing. Speculate and hope for a financial miracle! Miracles do happen. Think if you bought Apple shares or Bitcoin years ago. How rich would you be? Pick something you think might go up and buy. Go big or go home.

12. Tax Negligence: The Unseen Erosion

Taxes are complicated. Ignore them and hope the taxman doesn’t notice. You can’t control them, so don’t worry about them.

13. Working Without Purpose: The Road to Burnout

Work for the paycheck. Finding purpose in your career is a waste of time. Work sucks, and that’s why they pay us to do it. Get over it.

14. Substance Misuse: Financial and Personal Ruin

Let substance abuse control your life and finances. Drink booze daily. It is the only way to cope in today’s stressful world. Try other drugs on weekends. Alternative experiences might open up your mind. If not, you will at least feel good for a few hours. Health and wellness are secondary to immediate pleasures.

15. Neglecting Self-Improvement and CME

Stop learning once you finish school. Personal growth and continuing education are unnecessary expenses. You know enough. The best knowledge is old knowledge.

16. Disregarding Honesty and Virtue

Ethics in finance? Ignore that. Cutting corners gets you ahead faster. Let’s face it: ethics is all subjective. Don’t follow old, antiquated rules from the Bible, Ben Franklin, or your grandma. That’s no way to get ahead. Liars and cheaters are everywhere. You can’t beat them, so join them.

17. Avoiding Real Estate: Missing a Key Asset Class

Stay away from real estate. Overlook its potential in diversifying your portfolio. Properties are expensive and sometimes crash in value. Who wants to deal with all the hassles and calls at 2 A.M.?

18. Neglecting Estate Planning: The Forgotten Future

Estate planning is for the future-minded. Live in the now and forget about legacy. Don’t worry about the future. Only the present exists. Who cares what happens after you’re dead anyway? That’s not your problem.

By now, you should have a masterclass in financial ruin. If this journey through fiscal folly made you cringe, it’s time to consider the opposite approach. Start making wise financial decisions and watch your wealth grow. The path to financial success is paved with prudence, planning, and common sense. Happy (responsible) spending!

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  1. Rikki Racela said:

    Dude, this is hilarious! We could’ve added #19: Trust Northwestern Mutual or any financial advisor as they always have your best interest in mind and buying whole life insurance from them is the best thing to meet your financial goals!

    December 31, 2023

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