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The INVESTING Expert: Do This To Get RICH and STAY Rich (It’s SIMPLE!) | Morgan Housel

Best-selling wealth expert and author Morgan Housel is a master in dissecting the intricacies of finance and human behavior. His international bestseller, "The Psychology of Money,"is a game-changer.

Morgan HouselguestGreat Minds Lewis Howeshost

Dec 13, 20231h 15mWatch on YouTube

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CHAPTERS

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Chapter summaries

Why Comparison Keeps Us Feeling Broke
After a brief intro, Lewis Howes asks why our brains keep us feeling broke. Morgan Housel says wealth is relative, so people who get richer alongside their peers feel like they went nowhere, and he gives examples such as median income and baseball salaries.
- •No objective measure of wealth exists; everything is relative to peers
- •Median income adjusted for inflation has doubled since our grandparents' generation, yet we don't feel better off
- •The bear joke illustrates the evolutionary roots of comparison
- •The Chris Rock joke about Bill Gates and Oprah's money, and the Major League Baseball minimum salary, show that even the rich compare themselves to those richer
Luck, Short-Termism and Tolerance for Pain
Asked for the top patterns that keep people broke versus make them rich, Housel names luck, short-termism and tolerance for pain. He illustrates endurance with MrBeast's advice, Navy SEALs, and his own 17 years and 3,500 blog posts before his book.
- •Extreme success always involves luck that wasn't planned
- •MrBeast tells people to make 100 videos; 99 give up before then
- •Investing and business pay you for tolerating uncertainty and pain
- •Housel wrote 3,500 blog posts over 17 years, and he thinks about 3,000 of them were bad
- •Patience versus stubbornness is often only clear in hindsight
Housel's Weakness and Regrets
Lewis asks about Housel's biggest weakness and regret. Housel describes being a worst-case-scenario thinker prone to stress and anxiety, and says his main regret is not being kinder or more helpful to people in his life.
- •He is a worst-case-scenario thinker who sometimes wakes at 2 AM fretting
- •He would tell his 20-year-old self that it will all work out
- •Some stress is useful as a motivator but can be overdone
- •His regrets are about not being more empathetic or helpful to friends
- •He is proudest of helping people, not of selling books or making money
Money as a Tool, Not a Scorecard
Lewis asks how to escape the trap of never having enough. Housel says society will never escape comparison, but individuals can ask whether money is a tool for a better life or a scorecard, and he offers the high-end Toyota versus entry-level BMW idea.
- •At the societal level, comparison never goes away
- •Strangers you try to impress aren't paying attention to you
- •Recognizing the game lowers your social aspirations
- •A high-end Toyota is a nicer car than an entry-level BMW because it brings real enjoyment rather than bragging rights
Does Money Make You Happier?
Housel says his success brought contentment and fewer anxious days but not more happiness. He says he and his wife kept their goalposts fixed, and that giving money away has been a new and rewarding experience.
- •Money removes anxiety and reduces bad days but doesn't add many great days
- •Contentment is different from happiness
- •He and his wife keep their lifestyle focused on family time, walks and kayaking
- •Lewis says his happiness comes from creating something and serving people
- •Giving money away feels great, because 10 grand is trivial to him but life-changing to someone else
A Fragile World: Save Like a Pessimist, Invest Like an Optimist
Asked why people stay stuck in scarcity, Housel says the world breaks about once every decade, so anxiety is accurate. He advises saving like a pessimist and investing like an optimist, and notes that bad news is fast while good news compounds slowly.
- •Events like 9/11, the financial crisis and COVID make the world feel dangerous
- •Save for a world where you might lose your job or face a recession
- •Since 2003 there has never been a day without 100 things going wrong, yet stocks are up fourfold
- •Bad news happens suddenly, while good news is slow compounding of about 5 to 10% a year
- •Looking back a decade shows how much progress we've made
Unpredictable History and Behaviors That Never Change
Housel explains that Same As Ever opens with how fragile history is, using Washington's escape at the Battle of Long Island. Since the future can't be predicted, he suggests focusing on behaviors that never change, such as responses to greed, fear and risk.
- •Wind direction at the Battle of Long Island may have decided whether the U.S. existed
- •Nobody can predict recessions or market falls
- •Greed, fear, risk, storytelling and tribalism have stayed constant
- •Past behavior is the best predictor of future behavior, including in a person's own life
FOMO, Status and Showing Off
Lewis asks what to worry about regarding money and other people. Housel names FOMO as the most dangerous trait, citing his time as a valet, and explains that people are wired for status rather than happiness. He talks about his own younger desires and why he doesn't need to show off.
- •Chasing others' fast gains is risky because those gains are unsustainable
- •People show their best side, so you may be chasing fakeness
- •People are wired for status, which is a competition for resources and mates
- •At 19, with little else to offer, wanting a Bentley is natural
- •His circle of people whose love he cares about is small, and renting a Porsche cured his curiosity
Luck, the Book's Surprise Success, and His Simple Investing
Housel says luck plays a larger role the greater the success, and that nobody, including him and his publisher, foresaw his book's success (first print run 5,000). His investing is unchanged: a house, cash, Vanguard index funds and Markel shares, and his spending has gone to things that improve life rather than show off.
- •Higher success involves more luck, approaching 90% luck and 10% skill
- •The first print run was 5,000 copies and nobody predicted four million sales
- •His net worth is a house, cash, Vanguard index funds and Markel shares
- •Spending tripled but stays on family, time and the inside of the house, not showing off
What Gets Worse: Fear of Losing It and Identity
Housel says the downside of success is worrying whether it can last, and he cites Will Smith's quote on fame. He explains that losing money or fame hurts because it is tied to identity, so identity should be formed before success, and he describes humility reminders such as Roman soldiers and his kids.
- •He worries about keeping success going, as authors are like athletes
- •Gaining money or fame feels better than having it
- •Losing wealth hurts because it threatens identity
- •Identity should be formed before success and not changed by it
- •Young kids and the Roman whisperer story keep people humble
Parenting, Values and Money
Housel explains he is still working out how to raise kids with money. A billionaire's child told him his parents succeeded by teaching values over spending, but Housel notes that kids differ and some need the fear of not making it.
- •A billionaire's child told him his parents taught him to judge people by kindness and intelligence, not square footage
- •Kids learn parents' values more than their spending habits
- •Spoiled kids result from poor values teaching, not just money
- •Some people need the fear of not making it to stay motivated
Getting Rich vs. Staying Rich
Housel argues that getting rich and staying rich are opposing skills, optimism and risk-taking versus paranoia and conservatism. He discusses billionaire turnover, Elon Musk, Jeff Bezos's regret minimization and Bill Gates as a rare combination, and says easily earned money is easier to lose.
- •Getting rich requires optimism; staying rich requires pessimism and paranoia
- •Forbes billionaire list has about 70% turnover per decade
- •Musk put nearly all his PayPal money into Tesla and SpaceX
- •Gates took huge risks while keeping a year of payroll in cash
- •Easy money, like house money in Vegas, is easier to lose than money earned through sweat
The Power of Storytelling and Getting to the Point
Housel says the best storyteller wins, not the one with the right answer, using politics and Ken Burns's Civil War documentary as examples. To tell better stories, he says to get to the point and make every line count.
- •The best story, not the most accurate one, wins in politics, business and media
- •Ken Burns's Civil War documentary drew more viewers than the Super Bowl that year
- •Burns even matches music beats to specific words
- •Make your point and be done, as Mark Twain said of kids
- •Brevity means every line is captivating, not that it's short
Competitive Advantages Fade and Skills That Got You Here
Housel explains that competitive advantages have shelf lives, using founders, Travis Kalanick at Uber and Steve Jobs versus Tim Cook as examples. He applies this to his own writing, where experimentation was easier before he had a brand.
- •Founder skills for building a product differ from those needed to run a large company
- •Uber needed Kalanick early but not later
- •Apple may have needed an operator like Tim Cook as it grew
- •What made you successful may need to be let go
- •With an established brand, experimentation can hurt, as with the Offspring
Quitting While Ahead and Identity Beyond Work
Housel admires people who leave on their own terms, like Seinfeld, Cameron Diaz and Friends, contrasting them with The Simpsons. He says his identity is father, husband and friend, and he may stop writing books, though his dad's retirement shows this could be harder than expected.
- •Jerry Seinfeld turned down $100 million for one more season
- •The Simpsons and Seinfeld contrast hanging on versus leaving on your terms
- •He expects not to write ten more books, and identifies as father, husband and friend
- •Childhood fame often harms people's later lives
- •Seven of the ten richest men have divorced, which he links to singular focus on work
- •Warren Buffett's line: success is when the people you want to love you do love you
Same As Ever's Core Lessons, Obituary and Closing Questions
Housel reiterates that behavior stays the same and gives the two takeaways of his books: humility and looking inward. After sharing where to find him and reflecting on his obligations to his family, he gives three truths and defines greatness as independence and autonomy.
- •Voltaire quote: history never repeats itself, but man always does
- •Humility about the future and looking inward at what's right for you are the two big takeaways
- •He worries he traveled and spoke too much last year and missed time with his kids
- •Buffett's advice to write your obituary and live up to it
- •Three truths: the luckier you are the nicer you should be; define your own game; keep people you don't want to disappoint
- •Greatness is waking up and doing what you want with whom you want

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