Speculation: A Game You Can’t Win

In the end, a healthy relationship with money stems from how grateful you are for what you have. The constant pursuit for “the next big thing” is a clear indicator that what you have isn’t enough, and it’s worth considering if any amount ever will be.

Speculation is the antithesis of that statement.

As I’ve said before, financial freedom isn’t about money, it’s about attention. The less you have to think about money, the more free you actually are.

It is for this reason that speculation is a game you can’t win. On one hand, there’s the burden of regret resulting from selling too early (or from selling too late at a realized loss). On the other, there’s the schadenfreude you embody by selling right on time. Whichever path the asset ends up taking, there’s a mental tax to be paid on top of any ... See more

To be happy that you made money on something that crashes is a form of schadenfreude : a German word for taking pleasure at another’s misfortunes. It’s arguably the lowest of all human emotions, especially if it’s directed toward people that just want better lives. Yet schadenfreude is exactly what we’re embodying when we’re elated that our 10x ret... See more

The thing we often forget is that when an asset or stock price crashes, a ton of people are losing a ton of money . Savings are decimated, jobs are lost, and futures are thrown into question. There are countless stories unfolding as a price chart bends toward zero, and you can assume that most of them aren’t too pleasant.

Well, not really. If you think about it, it’s actually quite sad.

In this case, you’d likely be elated. You really did predict the top, and got out at exactly the right time. That’s cause for celebration, right?

Once again, you buy an asset for $1,000 and then sell it for $10,000, making a 10x return. But what if a few months later, you see that the asset crashes and plummets down to $1?