Sublime

The theft had become a signal of the Mona Lisa’s worth. Surely, no one would steal a worthless painting. The crime brought long-term value to the Mona Lisa and the Louvre.

We overvalue what we own and what we might lose

As I write this Warren Buffett’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday. $81.5 billion came after he qualified for Social Security, in his mid-60s.

The core of John Kelly’s philosophy of risk can be stated without math. It is that even unlikely events must come to pass eventually. Therefore, anyone who accepts small risks of losing everything will lose everything, sooner or later. The ultimate compound return rate is acutely sensitive to fat tails.

It’s important to note that the children of affluent parents have (in today’s dollars) about a one-in-five chance of accumulating wealth in the seven figures during their lifetimes, while the average child in this country whose parents are not millionaires has about a one-in-thirty chance.

Recent statistics show that, Warren Buffett and Bill Gates notwithstanding, Americans making $50,000 to $100,000 give away two to six times as much of their money (in percentage terms) as people who make more than $10 million.59

There are a million ways to get wealthy, and plenty of books on how to do so. But there’s only one way to stay wealthy: some combination of frugality and paranoia.