21.05.2025

How smart men go broke: Liquor, Ladies, and Leverage

Charlie Munger once said smart men go broke three ways: liquor, ladies, and leverage. We unpacks this timeless warning with wit, real-life stories, and modern wisdom every gentleman needs.

Words: Johan Chua

James Bond: No Time to Die

Metro Goldwyn Mayer Pictures via AP

DISCLAIMER:
At GC, we honour the diverse values and beliefs of our global readers. The following article explores themes that include alcohol and certain lifestyle choices, referenced purely for financial, cultural, and cautionary insight. These references do not reflect an endorsement, and we encourage readers to interpret them within the context of their own principles and values.

If Charlie Munger - the late vice-chairman of Berkshire Hathaway and arguably one of the wisest investors of all time - drops a truth bomb, you’d be a fool not to listen. And one of his most infamous quips?

“Smart men go broke three ways: liquor, ladies, and leverage.”

It’s humorous. It’s sharp. And tragically, it’s true.

Let’s break this down, one dangerous indulgence at a time. Whether you’re in Kuala Lumpur’s rooftop bars, London’s Mayfair clubs, or Istanbul’s crypto lounges, these three Ls have been known to turn rising stars into cautionary tales. Here’s your stylish survival guide.

Rosewood Creative

1. Liquor: The Mirage of Liquid Courage

The Problem:
Hedonism is seductive. The scent of aged whisky, the clink of ice in a crystal tumbler, the buzz of a Friday night - what could go wrong? Just ask any former high-flyer whose liver (and wallet) both retired early.

There’s a difference between savoring a Negroni and needing six shots of tequila to function. The smart man drinks to celebrate, not to escape. But when drinking becomes a lifestyle rather than a leisure, that’s when the downfall begins.

Real Talk:
A former oil trader in Singapore - let’s call him ‘Zack’ - used to end every green day on the trading floor with champagne at Marina Bay Sands. Eventually, the bubbly became a daily necessity, even on red days. His cognitive sharpness dulled, his decision-making blurred, and his liver screamed for mercy. By the time Zack sobered up, he’d burned through $2.4 million in two years - and not a single bottle helped him recoup it.

The Gentleman’s Code:
Indulge, don’t depend. Learn to enjoy the ritual, not the rush. A true gentleman knows when to toast - and when to switch to sparkling water.

Cooper Hefner.

Getty Images for Playboy

2. Ladies: The High Price of Playboy Lifestyle

The Problem:
Let’s be clear: this isn’t an attack on women. This is a warning against the perilous path of the womanizer lifestyle - the type of man who treats relationships like poker hands: high stakes, little loyalty, and an expensive bluff.

Chasing love is human. Chasing validation through constant flings is financial suicide. From luxury gifts to legal settlements, from yacht parties to hush money - romantic recklessness has emptied more bank accounts than bad businesses ever did.

Case in Point:
One Malaysian Datuk with a taste for high fashion and higher drama fell into the trap. Between European jaunts with fashion influencers and hush-hush affairs with A-list models, his credit cards screamed louder than his PR team. The final bill? RM7.5 million in "lifestyle costs" over 24 months - none of which translated into actual happiness, let alone ROI.

The Gentleman’s Code:
Seek connection, not conquest. A gentleman builds a legacy, not a tabloid trail. Love isn’t measured in Birkin bags, but in how grounded you remain amidst the storm of desire.

Margin Call.

EBC Financial Group

3. Leverage: The Rocket Fuel That Burns Both Ways

The Problem:
Leverage - borrowing money to invest - can feel like financial alchemy. You put in $10, borrow $90, and if your asset goes up 10%, you double your money. But if it drops by just 10%? You’re wiped out faster than you can say “margin call.”

It’s Wall Street’s favorite temptation and crypto’s cruel mistress. And it’s how thousands of “smart” men have gone broke, staring at their Robinhood or Binance apps, wondering where their "Wen Lambo?" dreams went.

Recent Reality:
Remember the crypto bull run of 2021? Many in the U.S., Malaysia, and Europe leveraged up with "free money," betting big on altcoins, NFTs, and DeFi tokens. Then came the crash. Celsius, FTX, Luna—names that were once gospel now rhyme with grief.

Even seasoned traders like Three Arrows Capital’s founders were caught over-leveraged. Their empire crumbled, and they lost billions. The lesson? Even brilliance can’t bail you out when the market decides to humble you.

The Gentleman’s Code:
If you can’t sleep with your position open, you’re probably too leveraged. Always invest with money you can afford to lose - and preferably, money that doesn’t come with a 10% interest rate attached.

Tom Claeren.

Instagram

Final Word: Discipline is the New Smart

Liquor, ladies, and leverage aren’t inherently evil. They can all be part of a full, joyous life. But the modern gentleman isn’t seduced by the surface - he’s grounded by history and wisdom.

A gentleman in Paris sips Bordeaux, not bottle service. A KL tycoon romances one queen, not a dozen mistress. A New York investor diversifies, doesn’t double down on hope.

So next time someone quotes Munger and laughs, remember: it’s not just a quip - it’s a warning wrapped in wit.

And the best part? Avoiding these pitfalls doesn’t mean a boring life. It means a balanced, sustainable one. The kind where you can sip whisky without drowning, love deeply without debt, and invest wisely without gambling.

Because gentlemen don’t just dress well. They live well.

About the Contributor

Johan Chua is a long student of masculinity, culture and lifestyle and various other subjects. He is interested in how all these things come together to impact our world and us individually.

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How smart men go broke: Liquor, Ladies, and Leverage

Charlie Munger once said smart men go broke three ways: liquor, ladies, and leverage. We unpacks this timeless warning with wit, real-life stories, and modern wisdom every gentleman needs.

Words: Johan Chua

James Bond: No Time to Die

Metro Goldwyn Mayer Pictures via AP

If Charlie Munger - the late vice-chairman of Berkshire Hathaway and arguably one of the wisest investors of all time - drops a truth bomb, you’d be a fool not to listen. And one of his most infamous quips?

“Smart men go broke three ways: liquor, ladies, and leverage.”

It’s humorous. It’s sharp. And tragically, it’s true.

Let’s break this down, one dangerous indulgence at a time. Whether you’re in Kuala Lumpur’s rooftop bars, London’s Mayfair clubs, or Istanbul’s crypto lounges, these three Ls have been known to turn rising stars into cautionary tales. Here’s your stylish survival guide.

Rosewood Creative

1. Liquor: The Mirage of Liquid Courage

The Problem:Hedonism is seductive. The scent of aged whisky, the clink of ice in a crystal tumbler, the buzz of a Friday night - what could go wrong? Just ask any former high-flyer whose liver (and wallet) both retired early.

There’s a difference between savoring a Negroni and needing six shots of tequila to function. The smart man drinks to celebrate, not to escape. But when drinking becomes a lifestyle rather than a leisure, that’s when the downfall begins.

The Gentleman’s Code:Indulge, don’t depend. Learn to enjoy the ritual, not the rush. A true gentleman knows when to toast - and when to switch to sparkling water.

Cooper Hefner.

Getty Images for Playboy

2. Ladies: The High Price of Playboy Lifestyle

The Problem:Let’s be clear: this isn’t an attack on women. This is a warning against the perilous path of the womanizer lifestyle - the type of man who treats relationships like poker hands: high stakes, little loyalty, and an expensive bluff.

Chasing love is human. Chasing validation through constant flings is financial suicide. From luxury gifts to legal settlements, from yacht parties to hush money - romantic recklessness has emptied more bank accounts than bad businesses ever did.

The Gentleman’s Code:Seek connection, not conquest. A gentleman builds a legacy, not a tabloid trail. Love isn’t measured in Birkin bags, but in how grounded you remain amidst the storm of desire.

Margin Call.

EBC Financial Group

3. Leverage: The Rocket Fuel That Burns Both Ways

The Problem:Leverage - borrowing money to invest - can feel like financial alchemy. You put in $10, borrow $90, and if your asset goes up 10%, you double your money. But if it drops by just 10%? You’re wiped out faster than you can say “margin call.”

It’s Wall Street’s favorite temptation and crypto’s cruel mistress. And it’s how thousands of “smart” men have gone broke, staring at their Robinhood or Binance apps, wondering where their "Wen Lambo?" dreams went.

Recent Reality:Remember the crypto bull run of 2021? Many in the U.S., Malaysia, and Europe leveraged up with "free money," betting big on altcoins, NFTs, and DeFi tokens. Then came the crash. Celsius, FTX, Luna—names that were once gospel now rhyme with grief.

Even seasoned traders like Three Arrows Capital’s founders were caught over-leveraged. Their empire crumbled, and they lost billions. The lesson? Even brilliance can’t bail you out when the market decides to humble you.

The Gentleman’s Code:If you can’t sleep with your position open, you’re probably too leveraged. Always invest with money you can afford to lose - and preferably, money that doesn’t come with a 10% interest rate attached.

Tom Claeren.

Instagram

Final Word: Discipline is the New Smart

Liquor, ladies, and leverage aren’t inherently evil. They can all be part of a full, joyous life. But the modern gentleman isn’t seduced by the surface - he’s grounded by history and wisdom.

A gentleman in Paris sips Bordeaux, not bottle service. A KL tycoon romances one queen, not a dozen mistress. A New York investor diversifies, doesn’t double down on hope.

So next time someone quotes Munger and laughs, remember: it’s not just a quip - it’s a warning wrapped in wit.

And the best part? Avoiding these pitfalls doesn’t mean a boring life. It means a balanced, sustainable one. The kind where you can sip whisky without drowning, love deeply without debt, and invest wisely without gambling.

Because gentlemen don’t just dress well. They live well.

About the Contributor

Johan Chua is a long student of masculinity, culture and lifestyle and various other subjects. He is interested in how all these things come together to impact our world and us individually.

Related posts

The Problem:
Hedonism is seductive. The scent of aged whisky, the clink of ice in a crystal tumbler, the buzz of a Friday night - what could go wrong? Just ask any former high-flyer whose liver (and wallet) both retired early.

The Gentleman’s Code:
Indulge, don’t depend. Learn to enjoy the ritual, not the rush. A true gentleman knows when to toast - and when to switch to sparkling water.

The Problem:
Let’s be clear: this isn’t an attack on women. This is a warning against the perilous path of the womanizer lifestyle - the type of man who treats relationships like poker hands: high stakes, little loyalty, and an expensive bluff.

The Gentleman’s Code:
Seek connection, not conquest. A gentleman builds a legacy, not a tabloid trail. Love isn’t measured in Birkin bags, but in how grounded you remain amidst the storm of desire.

The Problem:
Leverage - borrowing money to invest - can feel like financial alchemy. You put in $10, borrow $90, and if your asset goes up 10%, you double your money. But if it drops by just 10%? You’re wiped out faster than you can say “margin call.”

Recent Reality:
Remember the crypto bull run of 2021? Many in the U.S., Malaysia, and Europe leveraged up with "free money," betting big on altcoins, NFTs, and DeFi tokens. Then came the crash. Celsius, FTX, Luna—names that were once gospel now rhyme with grief.

The Gentleman’s Code:
If you can’t sleep with your position open, you’re probably too leveraged. Always invest with money you can afford to lose - and preferably, money that doesn’t come with a 10% interest rate attached.