Warren Buffett once spoke to a group of students about the perils of leverage. He referenced the collapse of Long-Term Capital Management, a group of brilliant investors who used excessive debt to juice returns but ultimately went bankrupt. Buffett’s message was simple yet profound: “You only have to get rich once.” Getting rich is one thing, but staying rich? That’s a whole different game.

The skills required to get rich often conflict with those needed to stay rich. The ambition, risk-taking, and confidence that propel you to wealth can clash with the caution, patience, and humility necessary to preserve it. This contradiction makes financial longevity a rare and underappreciated talent.

Muskoka Cottage - Watercolour by Jacoline Loewen

Bill Gates: A Case Study in Survival

In the 1970s, a young Bill Gates took what seemed like an enormous risk, dropping out of college to start Microsoft. But Gates had a safety net: his family’s support and his unrelenting focus on software’s potential. Despite the apparent gamble, Gates wasn’t reckless. He avoided over-leveraging and ensured he could adapt to changing markets. That blend of calculated risk-taking and long-term thinking is why he became one of the wealthiest people in history.

Jesse Livemore: Survival Over Intelligence

Jesse Livermore, one of the greatest stock traders of his era, epitomized the dangers of overconfidence. By 1929, he was worth an inflation-adjusted $100 million, yet he lost it all due to risky bets and lack of restraint. His story underscores what Andy Grove, former CEO of Intel, once said: “Only the paranoid survive.”

Survival isn’t about intelligence or insight—it’s about enduring. It’s about managing risk, preparing for uncertainty, and staying in the game long enough to reap the benefits of compounding. Livemore is a sad case.

The Counterintuitive Math of Compounding

Compounding is like planting an oak tree. The first few years show little progress, but give it decades, and it becomes extraordinary. The longer you stick around, the more compounding works its magic. However, compounding only works if you avoid ruin. Whether it’s excessive leverage, ill-advised investments, or emotional panic during market downturns, anything that forces you out of the game can derail decades of growth.

Lessons from Warren Buffett

Buffett’s success isn’t just about finding great investments; it’s about what he avoided. Over 80 years, he:

Steered clear of excessive debt.
Didn’t panic during recessions.
Avoided fads and stuck to his principles.
Preserved his reputation.

These actions allowed him to stay in the game and let compounding work its wonders. His financial longevity is his greatest asset.

Rick Guerin: A Cautionary Tale

Rick Guerin was once part of Buffett’s investing trio with Charlie Munger. Equally brilliant, Guerin’s downfall was impatience. He leveraged heavily and was wiped out during the 1973–74 market crash. Buffett later bought Guerin’s Berkshire Hathaway stock for under $40 a share. The lesson? Even brilliance can’t compensate for poor risk management.

Three Survival Mindsets for Wealth Preservation

Prioritize Resilience Over Returns Instead of chasing the highest returns, focus on being financially unbreakable. Holding cash during a bull market might seem conservative, but it provides the liquidity to avoid desperate, ill-timed decisions during downturns.
Plan for Plans to Fail Financial plans are essential, but reality rarely cooperates. Unexpected events—pandemics, market crashes, or personal emergencies—can derail even the best-laid plans. Build flexibility and redundancy into your strategy.
Longevity Beats Brilliance Compounding doesn’t require extraordinary returns, just steady ones over a long time. The ability to endure—through patience, discipline, and risk management—is the true key to staying rich.

Final Thoughts

In my career, I have been able to observe many different people and their long term success in growing and preserving their capital. Here’s my big takeaway: Getting rich requires skill, ambition, and sometimes a bit of luck. Staying rich demands humility, caution, and the willingness to play the long game. These are two very different skill sets.

As Buffett’s career shows, the real secret to wealth is survival. Those who endure, adapt, and avoid catastrophic mistakes are the ones who turn fleeting riches into enduring prosperity.