2026-03-28 01:08:43

Charlie Munger once warned that there are three ways for smart people to go bankrupt: alcohol, women, and leverage.

In the investment market, common types of leverage include:
◦ Tool leverage: options / perpetual contracts, etc.
◦ Structural leverage: such as triple leveraged Nasdaq TQ
◦ Debt leverage: using mortgage loans / credit card cash-outs / private financing to invest
◦ Invisible leverage: buying a house with 30% down payment and a 30-year mortgage
◦ Portfolio leverage: having a mortgage, using years of savings to start a business, and when the money runs out, planning to get a bank loan to invest in entrepreneurship.
This last type of combined leverage is a real situation I saw from a classmate during the Spring Festival.
Most leverage is essentially overdrawing the error tolerance. Once the funds and timing are misaligned, it becomes very fragile.

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