The Psychology of Money: Two Mountains

The Two Mountains Before You

As an old captain who has long sailed the sea of investment, I always see two huge mountains before me.

Two mountains, one steep and flashy, the other gentle and long

The first mountain is a very steep and rugged peak called ‘The Path to Becoming Rich.’ Every camera in the world focuses on those climbing this mountain. Stories of young geniuses who became billionaires overnight and heroes who wrote legends through bold challenges excite our hearts and make us dream sweetly, “I can be like that too!”

But long ago, I started looking at the second mountain beside it, which is higher and harder to climb. This mountain is called ‘The Path to Staying Rich.’ It is not flashy. Even if you reach the summit, no one may applaud. Rather, it demands endless patience and humility—a path that can be somewhat boring and lonely.

Isn’t it strange? Many people conquer the first mountain and shed tears of joy, but only a handful reach the summit of the second mountain. Why is that? Because ‘becoming rich’ and ‘staying rich’ require completely different skills and mindsets. The former is a sprint; the latter is an endless marathon.

This story is a long conversation about that second mountain, ‘how to stay rich.’ I cannot give you a secret map to sudden wealth. Instead, I want to share realistic wisdom to help you protect, grow, and ultimately master your wealth to live a free life.

Chapter 1: The Most Powerful and Boring Magic in the World, Compound Interest

Warren Buffett famously said, “Compound interest is like rolling a snowball.” Imagine a small snowball rolling down a hill and growing huge—doesn’t that sound wonderful? But we often forget how big that snowball can get and how ‘boring’ the process is.

The Miracle of One Won, Our Misconception

Here is a very interesting proposal. You can choose one of two options:

Option A: Receive 1 billion won in cash right now.
Option B: Receive 1 won today, and every day for 30 days, receive double the amount you got the previous day.

Most people would probably choose 1 billion won without hesitation, thinking, “How could I ever gather 1 billion starting from 1 won?” But the result completely defies our imagination.

Graph of exponential growth, gentle at first then sharply rising at the end

Day 10: Only 512 won
Day 20: About 520,000 won
Day 30: About 5.37 billion won

Can you believe it? The insignificant 1 won turned into over 5.3 billion won in just one month. Even more surprising is that most of this amount was created in the last few days. This is the magic of compound interest. Our brains are used to steady additions, but compound interest replicates itself and grows explosively, making it hard to intuitively grasp.

Warren Buffett’s Real Secret

People call Warren Buffett an ‘investment genius’ and wonder about his secrets, but the real secret behind his wealth might be very simple: ’time.’

A young boy starting to roll a small snowball and an old man standing next to a huge snowball

He started investing in his teens and never left the market for over 80 years. Over 95% of his assets grew after age 65. If he had started in his 30s and retired in his 60s like others, we probably wouldn’t remember his name.

This teaches us an important fact: the key to successful investing is not the ‘highest return,’ but ‘surviving in the market long enough to let compound interest work.’

Why Can’t We Roll the Snowball?

The theory is perfect, so why don’t we enjoy the benefits of compound interest in reality?

Impatience: We want 5.3 billion in 3 days, not 30. We can’t endure slow early growth and seek more thrilling shortcuts.
Frequent trading: We want to sell when prices rise a little and panic sell when they fall a bit. This is like stopping the magic spell ourselves—constantly stopping the rolling snowball.
The illusion of a ‘big win’: We fall for whispers of “this time is different” and risk everything in dangerous places. It’s a risky gamble throwing a rolling snowball off a cliff.

To truly experience the magic of compound interest, we must learn to endure ‘waiting’ and ‘boredom.’ If you trust your good assets, just live your daily life quietly. While you sleep, your money will be multiplying itself, creating a huge snowball.

Chapter 2: The Path to Staying Rich, the Great Skill of Survival

There may be countless ways to become rich, but there is only one way to stay rich: ’not going bankrupt.’ This is not a passive meaning of simply not losing money. It means an active survival strategy to endure any storm and never miss the chance for the compound snowball to keep rolling.

The Tragedy of a Genius: Lessons from Jesse Livermore

Black and white photo of Wall Street during the 1929 Great Depression

In the early 20th century, Wall Street had a legendary genius trader named Jesse Livermore. He predicted the 1929 Great Depression and made a fortune. But his end was tragic. He lost all his money and ended his life with a gun.

What led this genius to ruin? It was ’leverage (debt)’ and ‘arrogance.’ He always bet everything and lost everything in a single failure. He knew how to become rich but did not know how to stay rich.

No matter how many times you earn 50% in a row, if you lose 100% once, everything becomes zero. Survival always comes before returns.

The Secret to Unshakable Comfort

So how can you survive? You need the wisdom to create a ‘buffer zone’ that can withstand unexpected misfortunes.

Hold cash: When the market is gripped by fear, cash is king. It is a magical ticket to buy good assets cheaply and a lifeline that prevents you from selling precious assets at a loss in tough times.
Diversify your eggs: No matter how certain it looks, never put everything in one place. A well-diversified portfolio is the best shield against sleepless nights.
Be humble: No one knows the future. Always keep open the possibility that you might be wrong and prepare for the worst. The most dangerous belief is “I will never go bankrupt.”

The path to staying rich is not a thrilling adventure. It is a path so calm it can be boring. Instead of dreaming of sudden wealth, choose the wisdom of sleeping peacefully at night. This is the core skill of staying rich.

Chapter 3: The Fate of Arrogant Geniuses Who Fight the Market

“This time is different.” In the investment world, there is no phrase more dangerous than this. The human instinct to predict the future sometimes leads us to ruin.

The Smart Fools: Lessons from LTCM

In 1994, Wall Street was excited about the hedge fund Long-Term Capital Management (LTCM), created by a ‘dream team’ including Nobel laureates. They analyzed the market with sophisticated mathematical models no one else could match and achieved an astonishing annual return of over 40%.

They believed their model was perfect and said the chance of big losses was “virtually zero.” But in 1998, an unexpected Russian debt default (a black swan) occurred, and their perfect model collapsed instantly. They were on the brink of bankruptcy within weeks, threatening the entire global financial system.

Even the smartest people in history were powerless against the market’s unpredictability. The price of arrogance thinking you can beat the market was enormous.

Dancing with the Moody Friend, ‘Mr. Market’

Investment sage Benjamin Graham compared the market to ‘Mr. Market,’ a bipolar patient. Some days he is insanely happy and urges you to buy stocks at absurdly high prices; other days he is despairing as if the world is ending and wants to sell stocks cheaply.

Our job is not to be swept away by his moods but to take advantage only when his offers are favorable to us. Yet most people cry and laugh with him, engaging in emotional battles.

Don’t try to beat the market; make the market’s whims work for you.

Regular investing (dollar-cost averaging): Investing steadily every month means buying less when prices are high and more when prices are low, naturally lowering your average purchase price.
Rebalancing: Regularly adjust your asset allocation. If stocks rise too much, sell some and buy bonds. This wise strategy naturally sells expensive assets and buys cheap ones.

When you stop the arrogant challenge to beat the market and adopt the humble surfer’s stance of riding the market waves, you can finally reach your destination.

Chapter 4: A Map of Wealth for Life’s Four Seasons

Money management is not a sprint but a long journey from birth to death. Just as the scenery changes with the seasons of life, the wealth strategies we need must also change.

Four split images showing spring, summer, autumn, and winter landscapes

Stage 1: 20s (Sowing) - The Most Powerful Weapon, Time 🌱

In your 20s, you have little money but the most powerful weapon: ’time.’

Best investment: Yourself. Increasing your value (income) is the best financial strategy.
Strategy: Don’t fear failure; invest aggressively. Develop a habit of regularly putting part of your salary into ETFs investing in global blue-chip companies.
Biggest enemies: ‘Bad debt’ and ‘spending habits.’ Always remember “save first, spend later.”

Stage 2: 30s-40s (Growth) - Growing the Tree Amid Temptations 🌳

Income rises and family life begins; many important life events occur.

Key task: Grow your seed money seriously and set concrete goals like buying a home and children’s education.
Strategy: Still focus on growth but gradually increase the proportion of stable assets (stocks 60–70%).
Watch out for: ‘Lifestyle inflation.’ Increasing spending as income rises will keep you a slave to money forever. Use increased income to raise your saving/investing ratio.

Stage 3: 50s-60s (Harvest) - Wisdom to Protect and Reap 🍂

Retirement is near. Now, protecting and spending wisely is more important than earning.

Key task: Safely preserve assets and focus on creating cash flow for retirement.
Strategy: Reduce risky assets (below 40%) and increase steady income assets like dividend stocks or rental properties.
Biggest risks: Children-related risks and financial scams. Retirement funds are the last fortress that must never be compromised.

A time to enjoy the fruits of lifelong effort and live peacefully.

Key task: Maintain a dignified life within a planned budget and prepare for a graceful ending.
Withdrawal strategy: Follow the “4% rule,” withdrawing about 4% of retirement funds annually to avoid depleting assets too quickly.
Beautiful ending: Prepare in advance how to share the wealth you have built, embedding your philosophy.

What Does Your ‘Wealth’ Look Like?

We have traveled the two mountains: ’the path to becoming rich’ and ’the path to staying rich.’ At the end of all this, the question we face is:

“What does money mean to you, and what kind of life do you want to live through money?”

For some, wealth is a symbol of success; for others, it is the freedom to spend time with loved ones. For others still, it may be a tool to change the world.

At the summit of ’the path to staying rich,’ there is not just money. There is ‘peace of mind’ earned through long patience, ‘self-discipline’ that overcame countless temptations, and ‘wisdom’ to humbly accept the future.

Now it is time to set your own ‘principles of wealth.’ Draw your own map according to the life your heart desires. Then walk that path steadily and quietly.

At the end of that path, you will meet true abundance that cannot be expressed in numbers. Imagine yourself as the master of your money, fully enjoying the greatest gift money can give: freedom.