Harry Browne’s 16 Rules of Financial Safety (With My Commentary)
Timeless wisdom meets modern markets
One of my favorite books of all time is How I Found Freedom in an Unfree World by Harry Browne.
So naturally, I was intrigued when I discovered that he had also written extensively about money and investing. One of those books, Fail-Safe Investing: Lifelong Financial Security in 30 Minutes, contains practical principles about psychology, risk mitigation and wealth preservation.
Some of the rules have aged beautifully. Others I agree with only partially. A few, I think, are a little too conservative for my tastes. But all of them are worth thinking about.
Let’s dance with Harry Browne’s 16 Rules of Financial Safety with some commentary along the way.
Rule #1: Your career provides your wealth
Investments don’t make you wealthy; your primary earning power does. Don’t steal focus from your job or business to try to become a full-time market trader.
My commentary
I mostly agree.
For most people, their career or business is the engine that creates wealth initially. However, after your investments reach a certain size, they start carrying more and more of the load.
And yes, definitely don’t try to become a full-time active trader while you work on your business. You’ll probably lose a lot of money 😁.
A passive investing strategy using broad-based ETFs or index funds will likely give you excellent long-term returns while requiring minimal time if you invest in broad based ETFs/index funds and don't panic sell (see FIREDOM article for more info).
Rule #2: Don’t assume you can replace your wealth
Treat your accumulated wealth as completely irreplaceable.
My commentary
This sounds harsh, but I understand the point.
If you develop valuable skills and a strong mindset, I think you can become repeatedly “well-off” in most multiverse scenarios. But becoming genuinely rich or reaching FI in your 20s or early 30s? That requires some favorable external circumstances, timing, and luck that may not repeat themselves.
Protect what you’ve built.
