Is this strategy just counting on bankruptcy as a personal bailout in case you’re leveraged 3:1 and the stock market doesn’t go back up at least a bit after the pandemic?
No. All the forms of leverage advocated in the book (e.g., call options and buying stocks on margin) at worst take your portfolio to zero if there is a huge market downturn. The book of course advocates keeping a safe rainy-day fund for basic expenses, like everyone else. So you don’t ever require a bailout. The idea is that having your retirement fund go to zero in your early twenties is hardly catastrophic, and the older you get the less leveraged you should be.
Is this strategy just counting on bankruptcy as a personal bailout in case you’re leveraged 3:1 and the stock market doesn’t go back up at least a bit after the pandemic?
No. All the forms of leverage advocated in the book (e.g., call options and buying stocks on margin) at worst take your portfolio to zero if there is a huge market downturn. The book of course advocates keeping a safe rainy-day fund for basic expenses, like everyone else. So you don’t ever require a bailout. The idea is that having your retirement fund go to zero in your early twenties is hardly catastrophic, and the older you get the less leveraged you should be.