Chapter 5 - Getting vs Staying wealthy Flashcards
What are the primary traits required for staying wealthy, according to the chapter?
The primary traits required for staying wealthy are frugality, paranoia, understanding of luck and risk, and a survival mentality.
How does the chapter differentiate between getting wealthy and staying wealthy?
Getting wealthy often requires taking risks, optimism, and stepping out of one’s comfort zone. Staying wealthy, however, requires understanding the role of luck and risk in success and acknowledging that past success doesn’t guarantee future fortune.
What is the significance of survival mentality in wealth management?
Survival mentality in wealth management is significant because it ensures the individual remains in the market long enough for compounding to take effect, increasing the odds of success over time.
Why is being “financially unbreakable” important according to this chapter?
Being “financially unbreakable” is important because it allows for long-term survival in the face of uncertainty and the ability to weather periods of economic downturn or personal financial strain.
What is meant by “sensible optimism” and why is it important for staying wealthy?
“Sensible optimism” is the belief that, despite temporary setbacks, things will generally improve over the long term. This mindset is important for staying wealthy as it encourages individuals to view downturns as temporary and to stay committed to long-term financial strategies.
