$100KB. C. Even..."> Never lose money - W Buffett - 2million Personal Finance Blog, My Journey to Financial Freedom

Never lose money - W Buffett

"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." Warren Buffett

This quote is very powerful to me, here's why:
Question:If you have $100000 and in successive years, you are +20% and -20%, your end result is:
A. >$100K
B. <$100K
C. Even

Same scenario, but -20% and then +20%:
A. >$100K
B. <$100K
C. Even

It's easy after you do the math, but some find it surprising that in both cases, you end up with $96,000. You lose money in either scenario. Its a scary thought given the up and down annual returns of the stock market.

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I agree.

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A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,278,865


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