⚡Over the years, I have developed a fixed habit: at the beginning of each year, I reread Charlie Munger——

I feel that when people are doing well, they are most likely to experience distorted judgment.

So, I must repeatedly remind myself during the clearest and most flag-raising time of the year——

I must deliberately stay away from the roots of long-term failures.

Munger summarizes it well:

Debt, drama, and fools; avoid these three, and you are already ahead of 90% of humanity!

1️⃣Debt is the leverage that accelerates your destruction.

The truly cruel part of the market is:

Losses happen far quicker than you expect, while recovery takes much longer than you imagine.

If you lose 50% of your capital, you need a 100% return to break even;

If you lose 75%, you need a 300% return;

If you lose 90%, you need a 900% return.

And debt will accelerate the development of this wrong direction.

Only those without debt have truly escaped the nature of slavery and will not easily head towards self-destruction.

2️⃣Drama, the silent wealth killer.

Any conflicts, entanglements, or chaos that consume your time and energy but produce no value belong to drama; you must stay away from it!

Bad partnerships, toxic relationships, lawsuits, family discord, office politics, etc., are all the same.

The most dangerous aspect of drama is not the waste of time, but that it will systematically destroy your judgment.

Whether it’s transactions or relationships, if you constantly need to manage and resolve conflicts, you must quickly, thoroughly, and decisively end it, and focus on things that can produce compound interest.

3️⃣Associating with fools will stifle your life.

You must distance yourself from the following people——

Those who are irrational, arrogant, and dishonest

Those who make bad decisions and expect you to save them

Those who do not learn from their mistakes

Those who mistake busywork for progress

Most people are driven by self-fear, jealousy, and greed.

They make decisions based on emotions and then use logic to justify them. If you spend too much time with these people, you will start doing the same.

And this is often the starting point of everything spiraling out of control!

Reading frequently and staying updated still requires a constant alarm!