Never lose your capital and why??

I always stress to tell my friend if you want to join and play the investment game, the first rule is never never lose your money. Once you can avoid to lose your money, then it is the great chance for you to make a huge wealth.

Why i said so?

Imagine now you have 100k, but now you lost your capital 50% to 50k, now how much is the return you have to make in order for you to get back your initial 100k??

The answer is 100%!! you have to make 100% return in order for you to recover back your losses from 50k to 100k. Can you catch the number? You are actually losing 50% only, but what you need to do is make 100% to get back your losses. That is two times!

The number even goes worst if you lose your capital more~
You have to make 150% in return for 60% loss of your capital
You have to make 233% in return for 70% loss,
You have to make 400% in return for 80% loss, and
You have to make 900% in return  for 90% loss!!

See the magic?? So always remember Warren Buffett's golden first rule which is never never loss your capital and second golden rule which is never never forget the first rule!!