$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.

Related in General:

Save Money on Overhead Garage Storage (Aug 28, 2012) With the upcoming expansion of our family, my wife and I have been discussing the space in our home. While we have a good size home (~2,600 sq ft), its currently laid out with 3 bedrooms and 1 bonus room...

When is a SmartPhone the Right Financial Decision? (May 14, 2012) I last purchased a typical cell phone back in October 2008 with a 2 year contract when we returned from China. My old cell phone broke while we were on assignment in China and I needed something once we...

Black Friday Shopping Highlights (Nov 27, 2011) I have little interest in going out and standing in long lines to pick up a few deals on Black Friday. However we did pick up a few deals over the weekend mostly online: $159 GE Front Loading Washer @...

Comments (1)


I agree.

Post a comment

(Comment moderation enabled.)

About 2millionblog.com

A personal finance weblog of my journey to reach my goal of $2 million + the value of my primary residence.
Current Net Worth: $1,938,393

Sponsors

New Personal Finance Articles




PF Blogs