To succeed, avoid failure, Charlie Munger’s (Warren Buffet’s Partner) response wasn’t just for a laugh. In his direct way, he reminded us of an important lesson in investing and life alike: Before spending an ounce of energy on how you’ll succeed, focus first on avoiding ways to fail. You’ll never worry about how to get out of a sticky situation if you’re never in one. Munger also likes to say, “All I want to know is where I’m going to die, so I’ll never go there.”

Stay within your circle of competence and ensure there’s a margin of safety. By sifting out whatever you aren’t familiar with, and giving yourself room for error, you’ll reduce the odds of getting in trouble.


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