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The Morgan Housel Podcast

Business & Economics Podcasts

The Morgan Housel Podcast -- timeless lessons on wealth, greed, and happiness.


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The Morgan Housel Podcast -- timeless lessons on wealth, greed, and happiness.




Compounding Optimism

Let me share a little theory I have about optimism, and why progress is so easy to underestimate. I’ll explain it in four parts.


A Few Thoughts on Spending Money

Behavioral finance is now well documented. But most of the attention goes to how people invest. But the study of how you spend money might be far more interesting -- and practical. How you spend money can reveal an existential struggle of what you find valuable in life, who you want to spend time with, why you chose your career, and the kind of attention you want from other people. There is a science to spending money – how to find a bargain, how to make a budget, things like that. But there’s also an art to spending. A part that can’t be quantified and varies person to person.


Information That Would Get Your Attention

There’s obviously a hierarchy of information. It ranges from life-changing good to life-changing disastrous. That got me thinking: What would be the most interesting and useful information anyone could get their hands on? Years ago I asked that question to Yale economist Robert Shiller. “The exact role of luck in successful outcomes,” he answered. I loved that answer, because nobody will ever have that information. But if you did, your entire worldview would change. Who you admire would change. The traits you think are needed for success would change. You would find millions of lucky egomaniacs and millions of unlucky geniuses. The fact that it’s impossible to possess this information doesn’t make it useless – just thinking about how powerful it would be to have it forces you to ponder a topic that’s important but easy to ignore. Keeping the idea that the most interesting information doesn’t have to be realistic – it can be impossible-to-obtain, magical-wish thinking – here are three other things that would get your attention.


Active vs. Passive Learning

There are two big ways to learn: Active learning: Someone tells you what to learn, how to learn it, on a set schedule, on pre-selected standardized topics. Passive learning: You let your mind wander with no intended destination. You read and learn broadly, talk to people from various backgrounds, and stumble haphazardly across topics you had never considered but spark your curiosity, often because it’s the topic you happen to need at that specific time of your life. I can’t be alone in realizing that most of what I’ve learned in life has come from passive learning.


Respect Each Others’ Delusions

One sentence that knocked me off my feet when I read Will and Ariel Durant’s The Lessons of History was: "Learn enough from history to bear reality patiently, and respect one another’s delusions." I love that so much. The key here is accepting that everyone is deluded in their own unique way. You, me, all of us. When you realize that you – the good, noble, well-meaning, even-tempered, fact-driven person that you are – have views of how the world works that are sure to be incomplete if not completely wrong, you should have empathy for others whose deluded beliefs are obvious to you. I am such a fan of Daniel Kahneman’s observation that we are better at spotting other people’s flaws than our own. This episode shares three reasons why all of us become deluded in our own way.


The 10 Most Important Financial Skills

My wife recently bought me an old book. It's called The Mathematical Theory of Investment. It was written in 1913 and it's as dry and boring as it sounds (but the old weathered cover looks awesome on a bookshelf). I flipped through it and thought, "Does any of this matter?" These formulas, these charts, this data? Well, yes. But not nearly as much as the soft, behavioral side of investing. This episode shares 10 of what I think are the most critical financial skills -- none of which you'll find in a 100-year-old academic text.


Expiring vs. Permanent Skills

Expiring skills tend to get more attention. They’re more likely to be the cool new thing, and a key driver of an industry’s short-term performance. They’re what employers value and employees flaunt. Permanent skills are different. They’ve been around a long time, which makes them look stale and basic. They can be hard to define and quantify, which gives the impression of fortune-cookie wisdom vs. a hard skill. But permanent skills compound over time, which gives them quiet importance. When several previous generations have worked on a skill that’s directly relevant to you, you have a deep well of relevant examples to study. And when you can spend a lifetime perfecting one skill whose importance never wanes, the payoffs can be ridiculous. Anything that compounds over decades usually is. This episode discusses a few permanent skills that apply to many fields.


My New Book, Same As Ever: A Guide to What Never Changes

My new book, Same as Ever: A Guide to What Never Changes, is out today. Books are hard, a multi-year slog from start to finish. But I’m excited for you to read this. I think it’s the best writing I’ve ever done. And it was fun to write! My hope is that you enjoy reading it half as much as I enjoyed writing it. My first book, The Psychology of Money, was really about how you, the individual behave. Same As Ever is about how we, the collective, behave, and what we keep doing over and over. It’s 23 short stories about what never changes in a changing world. I’ve been thinking about this book for my entire career. I’ve always been skeptical of forecasts, because the world’s track record on predicting the next recession, the next election, or the next technology is so bad. That should draw you to the question: What’s never going to change? What do we know for certain is going to be part of our future?


Justifying Optimism

All optimistic beliefs can be dangerous because they’re so comforting, so easy to accept without asking further questions. Hope often masquerades as optimism when you think things will improve only because the alternative is too scary to contemplate. Every optimist needs to justify exactly why they're optimistic. In this episode, I offer my own three reasons.


Little Flaws

Daniel Kahneman says, "The long-term success of a relationship depends far more on avoiding the negative than on seeking the positive." It's like that in so many areas of life. Most people know what they're good at, or at least they think they do. Flaws, though, tend to be nuanced, and we're often blind to them. This episode shares dozens of little flaws I often think about -- ones that are easy to ignore, but can compound into disasters over time.


A Few Laws of Getting Rich

Measuring wealth is easy. You just count it up. Measuring some of the downsides of wealth is so much harder and more nuanced. They can be so nuanced and hard to measure that many people won’t even believe they exist. A downside to wealth? How could that possibly be? Let me propose that the absurdity of talking about the downside of wealth is part of why wealth doesn’t tend to make people as happy as they thought it would. When the benefits of money are so obvious but the downsides are so subtle, the downsides you didn’t anticipate can be more jarring than the benefits you expected. I want more money, of course. Almost everyone does, albeit for different reasons. This is not an anti-wealth list -- just a collection of subtle downsides that are easy to ignore, and so common you may as well call them the only true laws of getting rich.


Death, Taxes, and a Few Other Things

My new book, Same As Ever, comes out in a month. It's about things that never change -- what's always happened in the world, and will keep repeating again and again? This episode shares five examples.


Respect and Admiration

Just after my son was born I wrote a few things I thought he’d find helpful as an adult. One of them was: "You might think you want an expensive car, a fancy watch, and a huge house. But I’m telling you, you don’t. What you want is respect and admiration from other people, and you think having expensive stuff will bring it. It almost never does – especially from the people you want to respect and admire you." Eight years later I still believe this to be true, and I might even double down.


Trying Too Hard

A truth that applies to almost every field is that it’s possible to try too hard, and when doing so you can get worse results than those who knew less, cared less, and put in less effort than you did. There are mistakes that only an expert can make. Errors – often catastrophic – that novices aren’t smart enough to make because they lack the information and experience needed to try to exploit an opportunity that doesn’t exist.


The Lifecycle of Greed and Fear

All greed starts with an innocent idea: that you are right, deserve to be right, and are owed something for the efforts you put into establishing your beliefs and opinions. It’s a reasonable feeling. But it sets off a chain reaction that leads to an inevitable boom-and-bust cycle. This episode explores one of the most important topics in investing: the lifecycle of greed and fear, and why it cannot, and will not, ever go away.


Intelligence vs. Smarts

This episode is about the difference between intelligence and smarts, and why one is valued more than the other despite being less useful in the world. The core here is realizing that people are not spreadsheets. They are emotional, hormonal, misinformed, status-seeking, insecure creatures trying their best to make it through the day. So if you have to choose between understanding how the world should work in theory vs. how it actually works in practice, lean towards the latter. It’s like historian Will Durant once said: “Logic is an invention of man and may be ignored by the universe.” That is so smart.


Fluke -- A Story About How Fragile The World Can Be

This is a short personal story about a fluke event 16 years ago that changed everything in my life. You probably have a similar story, and there is so much to learn about how everything can change from an event you never saw coming.


A Few Ideas That Changed My Life

You spend years trying to learn tons of new stuff, but then look back and realize that just a few big ideas truly changed how you think and influenced most of what you believe. Let me share a couple that had a big impact on me.


Rich and Anonymous

I think there’s an “ideal” net worth for everyone, when money not only stops bringing pleasure but becomes a social liability. And that number is probably lower than most people think. A subtle problem with money is that assets are easy to measure but liabilities can be hidden. Measuring assets is simple. But how do you measure losing your privacy? Or the nagging doubt that some friends only like you for your money? That’s way harder. My theory is that the more money people have, the more social debt they tend to be burdened with.


The Spectrum of Wealth

Chris Rock joked that Bill Gates would jump out the window if he woke up with Oprah’s money. Like most comedy, it’s funny because it contains a nugget of truth. There is no objective level of wealth -- everything is just relative to something, or someone, else. That means a billionaire can feel poorer than someone with infinitely less money. This episode tries to create a spectrum of wealth based on the quality of your life, feelings, and social circles, versus measuring it on money alone.