Leverage is the only way a smart person can go broke. You do smart things, you eventually get very rich. If you do smart things and use leverage and one bad thing happens—it all goes to zero.

Leverage is the only way a smart person can go broke. It's also the only way a person of modest means can become wealthy quickly — which is why it's so seductive and so dangerous. The solution is simple but not easy: never let a temporary setback become a permanent one.

The market can stay irrational longer than you can stay solvent, but the deeper truth is that most investors go broke not from bad timing but from borrowing money to express a correct opinion too early. Leverage transforms a right idea into a ruin.

Leverage is the ability to have non-linear output relative to your input. Without leverage, you're always just charging your hourly rate. But labor and capital are permissioned leverage — someone has to give them to you. Code and media are permissionless leverage — the robot army works for you while you sleep.

Leverage is the only way a smart person can go broke. You really can do smart things and have it end in disaster if you introduce time pressure and debt into the equation.

The best investment you can make is in yourself. But most people won't because it's not a leveraged bet, and you can't borrow money to do it.