Scientists have spent centuries unraveling the fundamental rules of the universe, and after all that work, they basically handed us three brutal truths:
1. You can’t win.
2. You can’t break even.
3. You can’t get out of the game.
This is thermodynamics in a nutshell—the laws governing energy, entropy, and why everything (including you) is slowly falling apart.
Now, what does that actually mean?
You can’t win → Energy can’t be created from nothing. You can convert energy (fuel into motion, calories into effort), but you don’t get more than you put in.
You can’t break even → Every energy transfer loses some efficiency. No machine is 100% perfect; some energy always turns into waste heat.
You can’t get out of the game → Absolute zero (zero energy, zero motion, zero chaos) is impossible to reach. There is no escape from entropy.
Sounds harsh? But, these exact same rules apply to your finances.
The Three Laws of Finance (Aka: The Market is Just a Giant Entropy Machine)
You can’t win: No Free Money
Just like you can’t create free energy, you can’t create free money. Markets are highly efficient, meaning prices already reflect available information—so opportunities for easy profits don’t last. Beating the market is possible, but only by taking on higher risk, and even then, success isn’t guaranteed. Even professionals struggle to stay ahead, because in an efficient system, every advantage comes at someone else’s expense. You don’t get extra return without taking on extra risk, and every trade has a counterparty who thinks they’re making the right move, too. Ultimately trying to beat the market is a zero sum game.
You can’t break even: Investing has frictions
Even if you match the market, fees, taxes, and inflation will erode your returns. Every financial system has friction—whether it’s your fund manager taking a cut, the government taxing your gains, or inflation silently siphoning your purchasing power. Maybe the biggest of all, advisor fees. It’s the financial equivalent of heat loss: unavoidable, but manageable if you pay attention.
You can’t get out of the game: Inflation, Risk, and the Cost of Inaction
Think holding cash will keep you safe? Inflation ensures that’s not a real escape—it just guarantees a slow decline. Sitting out of the market to avoid risk is, ironically, just another form of risk—the risk that your money won’t keep up with the cost of living. Risk and uncertainty are parts of investing we have to live with.
So, What’s the Lesson?
It isn’t all doom and gloom. You can function perfectly well within these rules (just look at the universe). Play it smart: take calculated risks, minimize waste (fees), and invest thoughtfully.
The universe and your portfolio follow the same rules—both punish inefficiency, both reward optimization, and neither offers a free lunch. And like it or not, you need to participate. But if you work with the system instead of against it, you can still meet your goals.
Because though you can't always "win", and there will always be headwinds to "breaking even", as long as you participate smartly you'll end up doing just fine.
About the Author
Carson McLean, CFP®, is the founder of Altruist Wealth Management, a flat-fee, fiduciary firm dedicated to helping clients optimize their finances without the inefficiencies of traditional advisory models. With over 15 years in the wealth and asset management industry, Carson tries to make complex topics enjoyable—whether it’s market efficiency, tax planning, or, apparently, physics for the nonprofessional.
Disclaimer: This content is for informational purposes only and is not intended as personalized financial, tax, or investment advice. While we strive to provide accurate and up-to-date information, all investments carry risk, and past performance is not indicative of future results. Any strategies or insights discussed may not be suitable for your specific situation. If you’d like to discuss how this applies to your financial plan, feel free to reach out.