Mastering the Art of Spending Money - Morgan Housel

1. 0:00 – 6:28

   What Your Spending Habits Reveal About You

   1. CWChris Williamson0:00

      You are my favorite writer.

   2. MHMorgan Housel0:02

      Thank you.

   3. CWChris Williamson0:02

      You have the most insights per word of anybody that's writing stuff at the moment.

   4. MHMorgan Housel0:08

      Well, thanks. That, that means a lot to me. Thank you.

   5. CWChris Williamson0:10

      You could have chosen to write about anything. Why choose to write about spending money?

   6. MHMorgan Housel0:16

      Well, I'll, I'll, I'll take it back to the start of my career, which was like a lot of young men, particularly in the, in the mid-2000s, uh, the ultimate goal... Before tech really existed, the ultimate goal was be an investment banker on Wall Street. And it's hard to remember that era, 'cause now, if you're a young person at Stanford or whatever, your goal is, like, go work at Google. Go work at, uh, at, at OpenAI. Back then, it was all, "Go work at Goldman Sachs." And so what I- my, my sole kinda life aspiration when I was 20 was to be an investment banker or a hedge fund manager.

   7. CWChris Williamson0:47

      Mm.

   8. MHMorgan Housel0:47

      And I knew I, I loved investing. Even at that age, I used to go to Barnes & Noble and read investing books, and I, I loved it to begin with. I just l- I was fascinated with money. And then I haphazardly got a job as a writer, because I graduated in 2008. The economy was, uh, it was a wreck, and nobody was hiring. No banks were hiring. And so the only finance job that I could find was as a writer for The Motley Fool. Didn't wanna be a writer, hated writing, was embarrassed that I had dreams to be a powerful investment banker, and now I was a journalist? I was like, I, I hated that, but I actually, like, pretty quickly fell in love with it. And what I loved about it was I loved being an outsider who was not being influenced by the incentives of that career. And so if you are a hedge fund manager, you have a lot of incentives and biases based around that. If you are a financial advisor, there's a lot of just... You have to think a certain way to fit into that profession. And I felt like as a writer-- and I'm not a journalist.

   9. CWChris Williamson1:42

      Right.

   10. MHMorgan Housel1:43

       Uh, as a writer, I could just be on the outside looking in. I felt like I was just up in the bleachers looking down and be like, "Let me try to figure out what's going on down there."

   11. CWChris Williamson1:50

       Felling abuse of the players on the pitch.

   12. MHMorgan Housel1:51

       Yes, and then tell a story behind it. And to me, uh, money, I, I think I, I, I got lucky, because money, I, I, I think, has more fascinating social stories in it than almost any other field, where how you spend money and how you save money and your ambitions are such a window into who you are. And of course, there's a lot of other things in life that are more important than money, family and, and purpose and whatnot, but money is a very clear window into who you are. And so that, I, I, I feel like there's just an endless well of interesting stories to tell about it.

   13. CWChris Williamson2:21

       What can you tell about someone from the way that they spend money?

   14. MHMorgan Housel2:24

       So much of it is about your ambitions and who you think about yourself. I, I really, I, I'm not anti-materialistic at all, and I, I really don't judge other people. But when I see somebody driving a, a yellow Lamborghini, I'm like, there's a story there. There's a story there, and it's not a judging story, but there's-- that's a story of who you wanna be and what you wanna show off. Now, some people have expensive cars, 'cause they love the craftsmanship and the engineering and whatnot. They're truly doing it for, uh-

   15. CWChris Williamson2:49

       Which is still a story

   16. MHMorgan Housel2:50

       ... for, for- it's still a story. But whenever I see someone clearly peacocking, and there's a lot of it, you see it, there's a story in there. I found this headline from 1929, which was the peak, uh, just before the Great Depression, and it was such a good headline. It was in The Washington Post. It was, "The More You Are Snubbed While Poor, The More You Enjoy Displaying Being Rich." And I was like, there's-- it's almost like you don't even need to read the article. Like, that's, that's it. That's- it's so astute, and I think so true, that for a lot of people, not everybody, but for a lot of people, the more you are showing off or you just desire to show off, a lot of it is a wound that was inflicted upon you, and you're like, "I'm gonna get back." And so- and sometimes, too, you're not even showing off for other people. You're doing it for yours- you're doing it to prove to yourself.

   17. CWChris Williamson3:36

       Mm-hmm. I am-

   18. MHMorgan Housel3:36

       To signal to yourself that, "I did it." I remember talking to Anthony Scaramucci about this, and he said that, uh, he, he, he grew up, you know, in, in one social class, where the ultimate signal that you made it to yourself, that you overcame where you became, was the Lamborghini. That, that was it. And so he... So he, he said, he was like, I, I... He was like: I, I don't want it for other people. I wanna do it to show myself that that kid who grew up down there made it up here. So it's a signaling and a story either way, and that's why it's not judging. It's just... But it's an interesting window into who you are.

   19. CWChris Williamson4:09

       Like, retributive materialism is what it's making me think of, that I am going to get back at whatever that thing was from my past.

   20. MHMorgan Housel4:16

       Yeah, and we-

   21. CWChris Williamson4:17

       You see-

   22. MHMorgan Housel4:18

       Go ahead.

   23. CWChris Williamson4:18

       You see this across everything. You see this across people who spend a lot of time beautifying themselves, well, it's because they probably, at one point in their life, felt quite ugly.

   24. MHMorgan Housel4:27

       Yeah.

   25. CWChris Williamson4:27

       Somebody who spends a lot of time accumulating power, well, at one point, they probably felt pretty powerless.

   26. MHMorgan Housel4:33

       Yeah.

   27. CWChris Williamson4:34

       Somebody who tries to accumulate a lot of wealth, well, they felt like they maybe didn't have very much freedom, or they didn't have very much independence-

   28. MHMorgan Housel4:41

       Mm-hmm

   29. CWChris Williamson4:41

       ... or they were very poor. Uh, somebody who makes themselves very powerful and very strong and very big, well, at one point, they probably felt very weak. Like, it, [chuckles] it's not a wonderful lesson, because in the calling out of it, it sort of derogates the thing that most people are chasing, and everyone fucking hates that-

   30. MHMorgan Housel5:01

       Yeah
2. 6:28 – 10:22

   Will a Big House Make You Happy?

   1. CWChris Williamson6:28

      Will a big house make you happier?

   2. MHMorgan Housel6:30

      If you use it as a way to, uh, have better relationships with people. If you have a big house, so you can have 20 of your best buddies over every Friday night and have a great time, yes. If you have a big house because that's what you need for you and your spouse to have five kids, and that's your meaning and purpose in life, yes, absolutely. But I think i- i- if, if you're using it as, as a way of just, like, a, you know, because that's what you should want-

   3. CWChris Williamson6:55

      Mm-hmm

   4. MHMorgan Housel6:55

      ... kind of thing-

   5. CWChris Williamson6:56

      Mm-hmm

   6. MHMorgan Housel6:56

      ... then it can be pretty miserable. Very interesting, Harvey Firestone, who created Firestone tires, uh, he, he, he was, he was alive, uh, 120 years ago or some odd. He wrote a biography in the 1920s, and he pointed this out. He said every wealthy person that he knows, without exception, buys a gigantic house, and every single one of them, without exception, finds it to just be a tremendous burden. [laughing] And, and he was, and he was like... He was like: "Why? Why do we do it?" And he even said Henry Ford, who at the time was like a, a cheap miser kind of-

   7. CWChris Williamson7:27

      Mm.

   8. MHMorgan Housel7:27

      He was like, e- he was like, "Even Henry Ford has a gigantic house that he hates." But he's like, there... So he's like, "There has to be something in the human soul that just associates large property with success."

   9. CWChris Williamson7:38

      Big abode.

   10. MHMorgan Housel7:39

       Because... And I think a lot of people who have a big house know this. Like, a big house is a tremendous amount of upkeep.

   11. CWChris Williamson7:44

       Mm-hmm.

   12. MHMorgan Housel7:45

       And a lot of people who live in those giant homes will eventually basically seclude themselves to a small little corner of that house-

   13. CWChris Williamson7:52

       Yeah

   14. MHMorgan Housel7:52

       ... that feels homely.

   15. CWChris Williamson7:53

       I would love to see people who have homes over 10,000 square feet or whatever. I'd love to do one of those GPS tracking maps-

   16. MHMorgan Housel8:01

       Yes

   17. CWChris Williamson8:01

       ... you know, how they do with wolves?

   18. MHMorgan Housel8:01

       Where do you stay with wolves? [chuckles] Yeah, yeah.

   19. CWChris Williamson8:03

       And I'd want to see, "Oh, my God, you know, of the 10,000 square feet that your house is, you use the same 1,500 square feet."

   20. MHMorgan Housel8:12

       Right.

   21. CWChris Williamson8:12

       "And you would be able to purchase that in this location or however many of these, or you-- this is what you lived in. You use the size of house that you lived in when you were 22-"

   22. MHMorgan Housel8:22

       Yes.

   23. CWChris Williamson8:23

       "-and you're still living in that same house that's just slightly bigger surrounding."

   24. MHMorgan Housel8:26

       But even if you showed that person that, that information, or for myself, and you said, "Hey, you, you could actually only live in a house that's 1,500 square feet." "No. No, thanks, not interested." So that, that's what Harvey Firestone got right. He was like, "It's a burden, but you still do it, and you're still going to do it."

   25. CWChris Williamson8:40

       [chuckles]

   26. MHMorgan Housel8:41

       I, I have a friend whose parents ha- live in a 20,000-square-foot house, and he gave us a tour, and the tour was basically, "Yeah, down that hall, there's four bedrooms that nobody ever uses. Down this hall, there's a room. It was gonna be a gym, but we ne- but we actually put the gym downstairs. Nobody ever uses it." It was... He was giving us a tour of places that are never used, and just like I said, they basically secluded themselves to the kitchen, living room, bedroom, and that was it.

   27. CWChris Williamson9:03

       Behold, my obsolescence.

   28. MHMorgan Housel9:05

       [chuckles] Right, yes.

   29. CWChris Williamson9:05

       Look at how much-

   30. MHMorgan Housel9:06

       Yes
3. 10:22 – 21:35

   The Surprising Truth About Money and Happiness

   1. CWChris Williamson10:22

      funny. Uh, how do you define financial success then? After all of this time thinking about it, what does financial success come to mean?

   2. MHMorgan Housel10:31

      To me, it's independence to be who you wanna be, and who I wanna be is not who you wanna be. Is- e- everyone has their own very individualistic definition of that. It's waking up and saying, "I can do whatever I want today," and having the independence and the freedom to do that. And the distinction is: there are billionaires who have no control over their time-

   3. CWChris Williamson10:49

      Mm

   4. MHMorgan Housel10:49

      ... no control over their schedule, spend their entire day doing things that they don't wanna do, and there are people who make $50,000 a year, who are living their absolute best life and totally control their life, control where they live, where they work, who they spend their time with, doing the hobbies that they wanna do.

   5. CWChris Williamson11:04

      Mm-hmm.

   6. MHMorgan Housel11:05

      And so to me, that's really what wealth is, and I think, I think a lot of people can get this wrong in their ambitions, that if your sole financial ambition is, "I want the highest net worth," and, and the re- and the way in which you're gonna get that is to basically put on a performance of somebody that you're not and wake up every morning and do things that you don't enjoy doing.

   7. CWChris Williamson11:25

      Mm.

   8. MHMorgan Housel11:25

      And that's, that's, that's not to say hard work. I think, I think the vast majority of people get a big thrill and a lot of pleasure out of hard work. They like being productive, doing the thing that they wanna do. It's working hard on things that you genuinely don't enjoy solely because you're attracted to a bigger bank account.

   9. CWChris Williamson11:41

      Mm-hmm.

   10. MHMorgan Housel11:42

       And but then that's a very common thing. So I think, I think the definition of wealth is the ability, the pleasure of being who you wanna be, being independent, waking up every morning and saying, "What I'm gonna do today is the thing that I want to do."

   11. CWChris Williamson11:55

       Wealth without independence is a unique form of poverty.

   12. MHMorgan Housel11:59

       That's, that's what it is for a lot of wealthy people. This to, this to me, is one of the most fascinating things of meeting a lot of wealthy people. If you associate wealth with material, and you go, "Do they have a big house? Have a big car? Maybe have a plane?" And you associate, "Oh, this person is very wealthy." And for a lot of them, not all of them, but for a lot of them, if... when you-- if you get to know them-... they spend the vast majority of their day doing things that they don't wanna do. And that to me, that, that still might be appeal- be appealing to some people. Or if you're not at that, you might say, "Look, I understand you say that, but let me experience it for myself. Let, let me try to do that." That's always the appeal, so I get that. But it's-- of the very wealthy people I've met, some of them have truly amazing lives, and I wouldn't say jealous, but I look at them and be like, "I, I, I want to be you."

   13. CWChris Williamson12:41

       Yep.

   14. MHMorgan Housel12:42

       There's-- I think there's a greater number, though, that when you... if you get to know them, you're like, "Wow, that's, that's not what I thought it would be."

   15. CWChris Williamson12:48

       Well, a lot of people have to do things that they don't want to do, and many people who work super hard, two jobs, got the kids, all the rest of the stuff, would say, "Well, you know, good. They, they should do-- I have to work hard, and so should they." You go, "Yeah, but why do you think they made themselves wealthy?"

   16. MHMorgan Housel13:06

       Yeah.

   17. CWChris Williamson13:06

       "What would you do if you were... Well, if I was wealthy, I wouldn't have to work the second job." It's like, if you are the sort of person who is driven to make yourself into the kind of wealth that they have-

   18. MHMorgan Housel13:15

       Yes

   19. CWChris Williamson13:16

       ... you can't turn off the switch.

   20. MHMorgan Housel13:18

       You can't, you can't turn-- You're never gonna meet a, a billionaire, except on the very few people who, like, accidentally got rich. You're never gonna meet a self-made billionaire who has a kind of personality who can say, "That's enough. Let me put it all in muni bonds and go home."

   21. CWChris Williamson13:30

       Mm.

   22. MHMorgan Housel13:30

       It's, it's not, it's not there. The reason that they are successful is because they have the kind of personality where they cannot... Twenty-four hours a day, all they can think about is their business.

   23. CWChris Williamson13:38

       Mm.

   24. MHMorgan Housel13:39

       And the w- and that's, that's a m- and even if I would say, "I don't want that for myself," of course, I wanna be financially successful, and I enjoy the work that I do. I'm so grateful that those people exist. Like, the vast majority of the great technology and great medicine that we all enjoy in the world came from people who were maniacally obsessed about their job, even if it came at the expense of their health, their marriage, their relationship with their kids. They created something amazing, and that's why they got successful.

   25. CWChris Williamson14:05

       Human perpetual motion machines-

   26. MHMorgan Housel14:07

       Yes

   27. CWChris Williamson14:07

       ... they're just churning, uh, sucking in problems and spitting out solutions.

   28. MHMorgan Housel14:12

       Yeah, I think we should be almost the most grateful for people in society who created amazing technology and amazing things at the expense of their own happiness, that we all get to benefit from now.

   29. CWChris Williamson14:22

       Yeah, I mean, it should be a cautionary tale, but from the outside, everybody looks at it and thinks some version of, "That might be true for them, but it won't be true for me."

   30. MHMorgan Housel14:31

       Yeah.
4. 21:35 – 28:11

   Is Wealth a Real, Measurable Thing?

   1. MHMorgan Housel21:35

      bigger than yourself.

   2. CWChris Williamson21:36

      Talk to me about the relativity of wealth, the, the comparison and anchors.

   3. MHMorgan Housel21:42

      I think it's, uh, it's... You have to choose your words carefully when you say this, 'cause you can really offend a lot of people. But the average, ordinary, median, middle-class American today, earning $60,000, whatever, whatever the median income is, uh, lives a life that would be indistinguishable from magic to somebody 100 years ago. I mean, that's, that's true. Just the, the access to the simplest things that you and I never think about, Advil, sunscreen, let alone phones and the Internet and whatnot, would have seemed like magic to people. It is also true, and this is the important part, it's also true that nobody wakes up thinking about how magical Advil is-

   4. CWChris Williamson22:18

      Mm

   5. MHMorgan Housel22:18

      ... and how grateful we should be to live in a world that has Advil and penicillin and all this. Nobody-- the speed at which a luxury becomes a necessity is two seconds, and you can easily imagine a world in which our grandkids live in a world that if we could get a glimpse of it, had a time machine and could see how they're living in the world 2150, be like: "I can't... You, you guys must be wake up so happy."

   6. CWChris Williamson22:42

      Yeah.

   7. MHMorgan Housel22:42

      "We've cured cancer. W- w- what, what..." "You know, we've done all these things. We're, we're a multi-planetary species," whatever it might be, and they won't appreciate any of it because it'll just become a normal thing. And so that's always the case, that luxury becomes necessity-

   8. CWChris Williamson22:54

      Mm

   9. MHMorgan Housel22:54

      ... uh, very, very quickly. It's always been the case that there's no definition of wealth. There's no objective definition of wealth. The only definition that makes sense to people is relative to other people.

   10. CWChris Williamson23:06

       Mm.

   11. MHMorgan Housel23:06

       And so it doesn't matter how much money that I have; all that matters is that I have more than you.

   12. CWChris Williamson23:11

       Mm.

   13. MHMorgan Housel23:11

       That's always been the case. It is 100 times more potent now because of social media. So what I just said was true 100 years ago, it's true 1,000 years ago. You judge yourself relative to other people, but your comparison group now that you're comparing yourself to is a curated, algorithmic, highlighted reel of the top 1% of moments of the top 1% of people's lives.

   14. CWChris Williamson23:30

       Globally.

   15. MHMorgan Housel23:31

       Yes, globally. And so it's created this idea... Look, as an iron rule of math, half the population has to be below the median.

   16. CWChris Williamson23:38

       Yeah.

   17. MHMorgan Housel23:39

       That's just how it works. Half the population has to be below average. And when everybody, though, is being almost force-fed the top 1% of moments of the top 1% of people's lives, you create this situation where a lot of people are living good lives by any historical standard.

   18. CWChris Williamson23:56

       Yeah.

   19. MHMorgan Housel23:56

       But we've created a world where I think most people expect what is effectively a top 1% outcome.

   20. CWChris Williamson24:01

       Mm.

   21. MHMorgan Housel24:01

       And you see this a lot with, with, uh, college students, where a lot of people think that the... Look, the baseline norm of what they want in life is a bachelor's degree from a flagship university, a, a corporate job that pays low six figures to begin with, great health insurance, great retirement, uh, a 3,000-square-foot house with two SUVs. That's, that's become their baseline norm of, like, "That's the- that's just what I expect."

   22. CWChris Williamson24:25

       Anything short of that-

   23. MHMorgan Housel24:26

       Anything short of that is a failure.

   24. CWChris Williamson24:28

       Yeah.

   25. MHMorgan Housel24:29

       ... on one hand, I wanna live in a world that has rising expectations. That's what progress is. I wanna live in a world where my grandkids live in a world where, where cancer is cured, and they don't even think about it. That's the dream. Rising expectations are, is progress. That's what it is. But you also, also have to e- expect and understand that in that world, that growth individually and as a whole society is never gonna feel like you think it would be, because it just becomes the norm that you're expect.

   26. CWChris Williamson24:55

       Hmm. Yeah, uh, the median income is 83,000.

   27. MHMorgan Housel24:59

       For a household. Individually, it's, it's, it's, it's lower 'cause there's, there's more than one worker per household.

   28. CWChris Williamson25:04

       Whoa! That's per household?

   29. MHMorgan Housel25:05

       You know, there's, there's one and a half or whatever workers per household on average.

   30. CWChris Williamson25:08

       Oh, that's interesting. You're right, the median US household income.
5. 28:11 – 34:01

   Why We’re So Hard On Ourselves

   1. CWChris Williamson28:11

      thing. Uh, but yeah, uh, talk to me about that, that trajectory piece. What are your... Have you got any examples, any stories that speak to that, "I must be better not only than the people around me, but also than me yesterday?"

   2. MHMorgan Housel28:25

      I think it's, uh, you know, it, it, it was weird for me. I, I, I had been a full-time professional writer for 15 years before I wrote a book, and I was very comfortable in my position of where I was as, as a blogger, as an online writer. I felt like I had a great life, loved what I did, made enough money for my family to be totally happy and have some sense of independence. And then I wrote a book 15 years into it that I never expected to do anything, and the publisher didn't expect to do anything, but massively increased the trajectory of my career. And it felt great. It felt, it felt amazing for, I wanna say, a year, and then it became, "This is just where I'm at now." I think what... The reason happiness is a fleeting emotion, which it is, most people are never happy for more than a short period of time. It's a great emotion, but it's always fleeting, is because what makes you happy is surprise. It's experiencing something that you genuinely did not expect. And so when I had this bump in my career, there was a period of surprise. I never expected this to happen.

   3. CWChris Williamson29:25

      Mm.

   4. MHMorgan Housel29:26

      And then after a period of time, it was like, "Okay, I'm, now I'm used to this trajectory, and this is where we're at." So I think even when you're on a higher trajectory, you can get used to it very quickly.

   5. CWChris Williamson29:34

      The gradient continues to get steeper-

   6. MHMorgan Housel29:36

      Yeah

   7. CWChris Williamson29:36

      ... but the problem is, as the gradient gets steeper, there are fewer and fewer degrees that you can make it go more vertically.

   8. MHMorgan Housel29:41

      But even if you're on this, y- like, even if you're still... So there's a hedge fund called Renaissance Technologies. It's the most successful hedge fund that's ever existed.

   9. CWChris Williamson29:47

      No way! I've never even heard of it.

   10. MHMorgan Housel29:49

       The average... So it's, it's a, it's a, it's not open to outside investors. It's pretty much only employees get to invest in it, and it is in a universe of its own. [chuckles]

   11. CWChris Williamson29:56

       [chuckles]

   12. MHMorgan Housel29:56

       Uh, its average annual returns, going back, like, 30 years, are 66%.

   13. CWChris Williamson30:02

       Sure.

   14. MHMorgan Housel30:02

       Just at a complete... Which, if you don't know anything about finance, that is like Michael Jordan times 50. It's a com- different universe. And, uh, but look, when you've earned 66% every year-

   15. CWChris Williamson30:13

       For 30 [chuckles]

   16. MHMorgan Housel30:13

       ... for 30 years, and if you earn it next year, like you got richer, but you're like, "Yeah, that's just what this does."

   17. CWChris Williamson30:18

       Yeah.

   18. MHMorgan Housel30:19

       "That's just where I'm at."

   19. CWChris Williamson30:19

       Yeah, yeah, yeah.

   20. MHMorgan Housel30:20

       "That's, that's what I expect." And I imagine, like, when Taylor Swift makes a billion dollars on tour, she's like, "Yeah, that's, that's just, that's what I do."

   21. CWChris Williamson30:26

       And anything short of that is a failure.

   22. MHMorgan Housel30:28

       Anything short of that is a failure, right, right. I think that's always the case with anything that you do.

   23. CWChris Williamson30:32

       ... Great line in a, a Jon Bellion song. He says, "If the higher I climb is the further I fall, then why love anything at all?" He's talking about emotional connection and opening up your heart and then potentially it being broken. But [clears throat] the same thing is absolutely true when it comes to status and striving and money and success and accolade. Your, your last album got a Grammy nomination. Well, this year, it better get a nomination or win, or you better get two-

   24. MHMorgan Housel30:56

       Yeah

   25. CWChris Williamson30:57

       ... or else you're going backward. That's not very good.

   26. MHMorgan Housel30:59

       The one career profession I think is really interesting in here is President of the United States because you are the most powerful man in the world with anything at your fingertips. Uh, and by the beauty of democracy, it's a short-term job.

   27. CWChris Williamson31:12

       Yep.

   28. MHMorgan Housel31:12

       And after being the most powerful man in the world, one day you wake up, and you're just some guy named George Bush.

   29. CWChris Williamson31:18

       [laughing]

   30. MHMorgan Housel31:18

       And there's, there's very few careers that are like that, where you are absolutely tippity-top for a moment, but it's going to end. And yes, you, you can even have book deals and speaking deals and have good fortune, but you know there's gonna come a specific day where nobody cares about you anymore.
6. 34:01 – 39:59

   The Relationship Between Money and Status

   1. CWChris Williamson34:01

      at checkout. How much of modern dissatisfaction do you think comes from comparing ourselves to people that we don't actually want to be like? I think that that marries what we were talking about before, which is a lot of the richest, most powerful people on the planet are secretly or even kind of publicly miserable.

   2. MHMorgan Housel34:19

      Don't want to be.

   3. CWChris Williamson34:20

      Yeah.

   4. MHMorgan Housel34:20

      I think what's more important... Do you remember the show, the show MTV Cribs?

   5. CWChris Williamson34:24

      Of course.

   6. MHMorgan Housel34:24

      You're of that generation? I know you're young.

   7. CWChris Williamson34:25

      Yeah, yeah, yeah, yeah, yeah, yeah.

   8. MHMorgan Housel34:26

      That was, that was most people's view into how the other half lives.

   9. CWChris Williamson34:30

      Right.

   10. MHMorgan Housel34:30

       This is before social media and whatnot, and that was it. But it didn't really inflate your aspirations because you know that's not a peer. It's Jay-Z. It's Shaq.

   11. CWChris Williamson34:38

       Yeah.

   12. MHMorgan Housel34:39

       Of course, he has a bigger house than I do. What's- what social media did is it showed you people who ostensibly should be peers, or at least that's the, that's the idea.

   13. CWChris Williamson34:46

       They've got an Instagram login as well.

   14. MHMorgan Housel34:48

       Yeah.

   15. CWChris Williamson34:48

       They use the same platform that you do.

   16. MHMorgan Housel34:49

       That's just a normal-- that's not a celebrity. It's not Shaq. It's just a guy who looks like me, but he's obviously living a much better life than I do. So it created this idea that, like, I, that's, that's where I should be, and I think that's, that's the poison of what it is. It, it gives the impression that people who, A, are, are showing you a tiny little fraction of their life-

   17. CWChris Williamson35:07

       Mm.

   18. MHMorgan Housel35:08

       ... it gives you the impression that that's what you should be doing right now at this moment, too.

   19. CWChris Williamson35:12

       What is-- what, what have you come to learn about the relationship between money and status?

   20. MHMorgan Housel35:19

       You bring up our friend Jimmy Carr, who I, I admire, so I- I think he's so brilliant. I have a, such a fondness for comedians in general.

   21. CWChris Williamson35:25

       Have you got to speak to him?

   22. MHMorgan Housel35:26

       Uh, no, we've DM'd a couple times.

   23. CWChris Williamson35:28

       Oh.

   24. MHMorgan Housel35:28

       But that, but I, I love the guy. He's so great.

   25. CWChris Williamson35:30

       Yeah.

   26. MHMorgan Housel35:31

       Um, and I think what's great about comedians and, uh... is that i- if you have a favorite comedian, you don't know, and you don't care how much money they make. I saw Louis CK live a couple weeks ago, and this is part of who he is. He stumbles out on stage, and he's wearing, like, a, a shirt that's way too big for him and his dirty jeans, kind of, and people love him. They love every second of it. Because what you love them for is their comedy, uh, obviously. You just, you don't, you don't... It's a rare situation where I'm like, "What I value you for has nothing to do whatsoever with your financial success." And so-

   27. CWChris Williamson36:04

       Mm-hmm

   28. MHMorgan Housel36:04

       ... you ask, like, the relationship-

   29. CWChris Williamson36:05

       Mm

   30. MHMorgan Housel36:05

       ... between, uh, money and, and power. If you're talking about, like, a businessman or an entrepreneur, you might measure their success based off of their net worth. If you're talking about if, if your favorite athlete, uh, had, had a, had a gambling addiction and lost all their money, but they're still just so much fun to watch on the court-
7. 39:59 – 49:46

   Can You Train Yourself to Feel Financially Content?

   1. MHMorgan Housel39:59

      have more than you.

   2. CWChris Williamson40:00

      The happiest people I know are the most content, not necessarily the richest, healthiest, or most successful. Is it possible to train contentment?

   3. MHMorgan Housel40:09

      Pretty difficult, I think. I think there are a lot of things in behavioral finance that it's just who you are and that who you are was forged at conception, and there's not a lot you can do about it. Daniel Kahneman was a, a psychologist, won the Nobel Prize in Economics. He was basically the godfather of behavioral finance, uh, came up with the vast majority of the theories that we all talk about that dictate how we think about money and, and, and success, and we, we a- we asked him one time, like, "Has all of this research that he had done over the previous 70 years, has it made him better at making decisions?" And like, "No," without hesitation, "No."

   4. CWChris Williamson40:44

      [laughing]

   5. MHMorgan Housel40:45

      "No, no." And so you're like, if somebody like him, it hasn't necessarily helped him. So I think for a lot of this, the flaw that people make is seem like I, I, I can learn about the psychology of wealth, and money, and investing and then change myself and change my behavior, and I think a lot of it, a lot of the evidence is no, you can't. I think the best you can do is become more aware of who you are and accept it, and build a financial plan, and build goals that are around that. I remember... I'll, I'll, I'll give you an example of this. Jeff Bezos was talking about when he started Amazon in 1994, I think it was, and he used the, this is now famous, the regret minimization framework, and he said, "If I started Amazon, and it failed, I would not regret that, but if I didn't start it, I would regret that for the rest of my life."

   6. CWChris Williamson41:24

      Mm.

   7. MHMorgan Housel41:24

      And I remember hearing that and being like, "That's awesome. I love that, and that is so not me." If I put everything I had into a startup and raised money from my parents and worked 150 hours a week for five years, and it failed, I would be beside myself.

   8. CWChris Williamson41:38

      [laughing]

   9. MHMorgan Housel41:38

      And that's, and that's... But I'm so glad that he and other people exist.

   10. CWChris Williamson41:42

       Which is exactly why he's a billionaire, and you're not.

   11. MHMorgan Housel41:44

       It's not... Exactly, and, and never will be, and it's not... A- a- and so the, the idea that, like, you have to figure it out, what kind of person you are, and so back to like, I w- I should not train myself to be like, "How can I train myself to have the entrepreneur's mentality?" I don't. It's okay. It's not that big a deal. I should just create a life that maximizes who I am than try to be someone who I'm not.

   12. CWChris Williamson42:03

       What are the important things to learn about who you are in this context?

   13. MHMorgan Housel42:07

       I think so much of it is having goals that don't leave the roof of your own house, kind of just being very selfish in a positive way. I think a l- a lot of bad financial decisions happen when you are chasing a goal or doing something that is very right for another person but wrong for you, and it's the easiest trap to fall into because you're like, "Chris did that, and it worked for him, and he's really happy with it-

   14. CWChris Williamson42:30

       Mm.

   15. MHMorgan Housel42:31

       - so I should do it, too." And it's, a- and it's, it's one thing if you're chasing ideas that didn't work out for other people. Then, like, the writing was already on the wall, but if I try to do something that not only was successful but that you love-... then it's like, well, I, I, I, I should love this too. Without the, the acknowledgement that everybody is very d- is so incredibly different. There are a lot of things that I do with my money that other people, maybe you, would look at and be like, "I don't... It doesn't make any sense to me. I don't understand why you're doing that." And I'm- and 90% of the time, my answer would be like: Yeah, I, I understand it wouldn't work for you. You probably do things that would drive me crazy, too.

   16. CWChris Williamson43:05

       Mm.

   17. MHMorgan Housel43:05

       And then, that's, and it's fine, and people understand that very vividly if we're talking about our taste in food or music, that, like, everyone's different. Like, you like Italian food, I like Mexican. It doesn't matter. There's- nobody's right. It's all subjective. But when it comes to how you should manage your money and the lifestyle that you should live, it really bothers people. I think part of it is because there's obviously no right answers on how to do this. This is all very uncertain.

   18. CWChris Williamson43:28

       Mm.

   19. MHMorgan Housel43:28

       How to build wealth is uncertain-

   20. CWChris Williamson43:29

       Mm.

   21. MHMorgan Housel43:29

       -how to manage it, how to spend it, it's all uncertain, and so when you see somebody doing it differently than you are, uh, you, you take it as not like, "Oh, maybe that's a different way to do it." You take it as a threat to the, the, the decisions that you made.

   22. CWChris Williamson43:41

       So true. It's... This is everything.

   23. MHMorgan Housel43:43

       Yeah.

   24. CWChris Williamson43:43

       This isn't just wealth.

   25. MHMorgan Housel43:44

       This is why I think the rent versus buy argument gets so heated. Because if you've, like... Because i- honestly, it's, it's not, it's not obviously clear which is better, rent and buy. You, like, anybody can make the argument either way. But if you've... If you have a giant mortgage and you put your life savings into your house, and somebody tells you renting was better, you're like, "That's a threat."

   26. CWChris Williamson44:03

       Yep.

   27. MHMorgan Housel44:03

       "That's a threat to my identity, and I'm gonna respond viciously now."

   28. CWChris Williamson44:07

       What's that line of yours where you say, uh, "Most debating on the internet are just people with differing perspectives being unable to understand the others?"

   29. MHMorgan Housel44:15

       Talking over each other.

   30. CWChris Williamson44:16

       Yeah, people just speaking-
8. 49:46 – 54:13

   What Really Makes People Happy?

   1. CWChris Williamson49:46

      [whooshing] When, when you look at the happiest people that you've met, what, what did they have in common that money alone doesn't explain?

   2. MHMorgan Housel49:55

      I think they, they were very internally benchmark focused. Their benchmark for how well their life was doing was like health, marriage, kids, job. It was a very... It, it didn't, it didn't leave the confines of their roof. And you can, you can flip that around and say some of the, the least happy people you met are a purely external benchmark. How beautiful am I? How many followers do I have? How many other people do I think are looking at me? Is a very external benchmark focused. That's almost always the case.

   3. CWChris Williamson50:21

      Mm.

   4. MHMorgan Housel50:21

      The internal versus the external benchmark is everything with, in terms of contentment and money. And contentment is important because the, the emotion that people want to chase with money is happiness. I, I, I want to be happy. But as I said earlier, happiness is always fleeting. You experience happiness, and it's awesome, but no one's happy for more than usually a couple minutes at a time.

   5. CWChris Williamson50:42

      Mm.

   6. MHMorgan Housel50:42

      I use the example of happiness as like humor. Like if I tell you the best joke in the world, or if we listen to Jimmy Carr, let's say, and it's the funniest joke, you laugh for thirty seconds. You don't laugh for thirty years. This is, that is not how humor works.

   7. CWChris Williamson50:55

      Mm.

   8. MHMorgan Housel50:55

      And if I tell you the joke every day over and over again, you're like: "Stop! It's, it's lost all value at this point." And I think so happiness is that way. It's a great emotion. It's fleeting.

   9. CWChris Williamson51:03

      Mm.

   10. MHMorgan Housel51:03

       Contentment, though, is permanent.

   11. CWChris Williamson51:04

       Isn't it interesting that music is, is different? You can listen to your favorite song a thousand times-

   12. MHMorgan Housel51:09

       Yeah

   13. CWChris Williamson51:09

       ... and still love it on a thousand and one, but the same is not true with-

   14. MHMorgan Housel51:12

       Movies

   15. CWChris Williamson51:13

       ... with jokes. Movies.

   16. MHMorgan Housel51:14

       Derek Thompson of The Atlantic, used to be at, at The Atlantic, wrote about this, that, uh, if, if, if, if you watch a movie a hundred times, you want to blow your brains out. It's just, you hate it. But you listen to a song a thousand times, it can get better over time.

   17. CWChris Williamson51:27

       Yeah.

   18. MHMorgan Housel51:27

       It's a, it's a different part of your brain that's processing it.

   19. CWChris Williamson51:29

       Yeah.

   20. MHMorgan Housel51:30

       But I think that it, it tends to be the case. But being content, just waking up and being like, "I, I got everything I want, and I can live in the moment and just appreciate what I have. And yeah, there's a lot of people who have a lot more than me, but I don't focus on that. I, I got everything that I need right here." It's a unique mindset.

   21. CWChris Williamson51:45

       There's two elements that I thought about a lot last year to do with happiness. One is that happiness can only arise when uncertainty isn't present. Like, if you're highly uncertain, uh, and y- maybe you're uncertain about how the football game's going to go, and that's kind of exciting, but when we're talking about life, how- ambiguity, uh, is my job going to be around in three weeks' time?

   22. MHMorgan Housel52:09

       Yeah.

   23. CWChris Williamson52:09

       Or is my partner going to stay with me, or is my dog going to die, or is my kid gonna come home? Uncertainty is just cancerous to happiness. And the second one is from Naval, which is, uh, happiness can only arise when you don't want things to be different.

   24. MHMorgan Housel52:25

       Yeah.

   25. CWChris Williamson52:25

       Like, if things are uncertain or ambiguous or ambivalent, and you want the world to be different, that is... Those two things, and they cross over a lot, they're often intersected, uh, it, it becomes very difficult to be happy. So in as much as money is able to reduce uncertainty and allow you to want things to be different less-

   26. MHMorgan Housel52:52

       Yeah

   27. CWChris Williamson52:53

       ... I think that creates a nice foundation, 'cause that's kind of like a price that everybody has to pay. If you've got high uncertainty and you want lots of things to be different, w- to whatever extent money is able to reduce those things, I think that's a good, a, a good reason to gain more of it.

   28. MHMorgan Housel53:08

       And just using it as a tool for, for optionality. To say: Look, if we were to experience the second Great Depression, I'm, I'm gonna be okay, and, and my, and my kids are gonna be okay. If I want to change careers, I can do that. If I want to move, I can do that. If I want to work less, I can do that. Having the mere option to do it, even if you're not exercising that option, is tremendous for people. Of just waking up this morning and being like, "My life's in my control."

   29. CWChris Williamson53:31

       Thirty-five to forty percent of adults in the US say they couldn't cover a four hundred dollar emergency without borrowing or selling something.

   30. MHMorgan Housel53:39

       Shocking, right? And, and look, here's the thing. If you, if you had said that statistic to someone a hundred years ago, and it wasn't four hundred dollars, it was forty dollars, whatever, it'd be adjusted for inflation, people would be like: "Yeah, that's how, that's how life works. Life is fragile and brutal."
9. 54:13 – 1:04:59

   Is Inheritance a Hidden Burden?

   1. CWChris Williamson54:13

      What, what's your favorite historical example of the difference between being rich and having wealth? Because there is a difference between these two things.

   2. MHMorgan Housel54:25

      To me, the most interesting family of all the mega-rich families that existed, of all the, the robber baron families, the mega-rich, the, the Carnegies, the Rockefellers, and the J.P. Morgans did, did v- pretty good job managing their money. They lived good lives themselves. They left it to beneficial causes. Not perfect, but they did a pretty good job of it. The Vanderbilts, I think, by far did the worst, and it's such a fascinating example to dig into, the Vanderbilt family, of, uh... You know, when, when Cornelius Vanderbilt died, adjusted for inflation-... depending on metrics you use, he had something like three to $500 billion, adjust, billion dollars adjusted for inflation. And within several generations, three generations, not that long of a period, there was virtually nothing left. And not a tremendous amount went to charity either. Vanderbilt University was the kind of their, their big project, which didn't even cost that much money to fund it. Uh, but most of it was spent on three generations of Vanderbilt heirs who were just in a generational pissing contest to see who could spend it the fastest. And if you dig into their biographies, there have been several biographies written about them, it is, uh, it's telling, and it's kind of sad, 'cause true to the, the, the David Senna idea of like super successful people who you would never want to be, that's, that's the sense that you get reading the biography of the Vanderbilt heirs. They... The money told them who they could be. It told them where they could live, who they could marry, who they could socialize with, how they had to dress. They had no independence over their life at all. And a lot of them, it was like, it was almost like they were characters in a movie, like the movie was called the Vanderbilt Family.

   3. CWChris Williamson55:59

      Mm.

   4. MHMorgan Housel55:59

      And they were just reading from a script on who they could be. They had no independence on who they could be, and a lot of them were just miserable for it. And this is now a well-known thing, but one of the first Vanderbilt heirs f- who didn't get a trust fund when there was, like, no money left over, was Anderson Cooper.

   5. CWChris Williamson56:14

      Mm-hmm.

   6. MHMorgan Housel56:15

      And he's talked about this, about how, uh, it was... He was kind of the first Vanderbilt heir in 150 years who was allowed to be himself. Had to figure out who he was, create his own identity, make his own money, be his own person, and it was almost like he was the first person who was, like, relieved of the burden of the money controlling who they were.

   7. CWChris Williamson56:34

      Well, he, he inherited the genetics of somebody that was able to make $350 billion, but didn't have to deal with the gravity of managing it.

   8. MHMorgan Housel56:45

      Or, or, or, or just dictating who he was. He, he also had another element, which is that his last name is not Vanderbilt. His mother was Gloria Vanderbilt, and his father was a guy named Wyatt Cooper. And, uh, so, so he didn't have the name recognition of it that would follow him around for the rest of his life and change people's opinion of him.

   9. CWChris Williamson56:59

      Where did they spend the money on?

   10. MHMorgan Housel57:01

       The, the Vanderbilts?

   11. CWChris Williamson57:02

       Yeah.

   12. MHMorgan Housel57:02

       Most of it... Well, a lot of it was mansions, and parties, and yachts, and just a, a, a, the most ostentatious lifestyle that you could imagine. A lot of it was, you know, the, the, uh, some of the mansions that they made-- this goes back to the point of what people actually want is, like, a smaller house. And so some of the mansions that, that they made were so unbelievably huge that they didn't wanna spend any time in them. They were, they were, they were so big and so, uh, unhomely, that where they wanted to spend was the, the smaller apartment that they had in New York that felt much more like home to them-

   13. CWChris Williamson57:32

       Mm

   14. MHMorgan Housel57:32

       ... versus the other house, the gigantic mansion that they had, was a trophy. It was to show other people that you had, but nobody needs a house with 70 master bedrooms kind of thing.

   15. CWChris Williamson57:41

       Mm.

   16. MHMorgan Housel57:41

       It was just to show people what you had. And I think it... There's another element here when, which is when you don't make the money yourself, when it was inherited from somebody else, then the symbolism of what you've overcome doesn't exist. It's not there. If you made it yourself, then the giga- the gigantic mansion is a symbol to yourself of what you've done and what you've built and what you overcame in life, and you take tremendous pride and, and, and gratitude in that.

   17. CWChris Williamson58:06

       Do you know Eddie-

   18. MHMorgan Housel58:06

       You inherited it from someone else, you had none of that.

   19. CWChris Williamson58:08

       Do you know Eddie Hearn, boxing promoter?

   20. MHMorgan Housel58:10

       Sounds familiar.

   21. CWChris Williamson58:11

       British boxing promoter, big, big name in that world. And, uh, his dad created the organization that he now runs, and he was asked, "What, what do you regret about childhood? Or what, what do you wish had changed?" And he says, "No, it was... I, I really loved my life, loved my life, loved my dad, but I never got to do it first."

   22. MHMorgan Housel58:36

       Yeah. Yeah.

   23. CWChris Williamson58:38

       "I never got to do it first."

   24. MHMorgan Housel58:39

       And if your parents are unbelievably successful, you know there, there's no chance statistically that you'll ever exceed them.

   25. CWChris Williamson58:45

       Well, I mean, if you're someone who wants to become a writer, what's the likelihood that you can outstrip The Psy- The Psychology of Money? You, the guy who wrote it, can't outstrip The Psychology of Money.

   26. MHMorgan Housel58:55

       Right. And, and imagine if one of Elon Musk's children, uh, is an entrepreneur and creates a business that's worth a billion dollars.

   27. CWChris Williamson59:02

       That's cute.

   28. MHMorgan Housel59:04

       Right?

   29. CWChris Williamson59:04

       Isn't that cute?

   30. MHMorgan Housel59:05

       Imagine if they become self-made billionaires, one billionaires-
10. 1:04:59 – 1:12:03

    The Smartest (and Dumbest) Ways to Spend Your Money

    1. CWChris Williamson1:04:59

       Mm. What are the worst ways to spend money, then? Like, if, if someone wanted to guarantee dissatisfaction with their wealth, what would you tell them to adopt?

    2. MHMorgan Housel1:05:07

       I, I, I think you would anchor all of your expectations and all of your goals to the pa- the, uh, chasing the admiration of people who are not important in your life. I desperately want my wife and kids to admire me and love me and pay attention to me. After that, it drops off precipitously. And I think if you're the kind of person... And social media has really put a spotlight on a lot of these people, who are just desperate for the attention and the engagement of total strangers, and their life's purpose, like, their- the only thing that matters to them in their life, uh, is, is the engagement of strangers. And it's a, it's a very unhealthy way to go about things, and I think it's always gonna leave you empty.

    3. CWChris Williamson1:05:46

       Mm-hmm.

    4. MHMorgan Housel1:05:46

       So I think, I think, I think that's the biggest. I wanna be very ambitious, financially and career-wise, to benefit a very small number of people in my life, fewer than 10 people.

    5. CWChris Williamson1:05:56

       Mm.

    6. MHMorgan Housel1:05:57

       A family, a couple friends kind of thing.

    7. CWChris Williamson1:05:59

       Mm.

    8. MHMorgan Housel1:05:59

       And after that, I couldn't give two shits about what happens from there. I think that's, that's the goal of happiness, and everything around it, the opposite of that, of trying to impress people who aren't paying attention, is the source of the vast majority of financial misery.

    9. CWChris Williamson1:06:11

       Okay. Ultimately, you do end up needing to spend money, and if people get to the place that they want to, which is some kind of wealth escape velocity, where they can have more than they need, you're gonna end up spending it on some stuff that isn't the necessities. So what's the opposite? What are the best places for people to spend money?

    10. MHMorgan Housel1:06:31

        I think, uh, where a lot of people go astray with this, I'll, I'll, I'll, I'll, I'll definitely get to what works, but where they go astray is don't spend money on things, spend money on experiences. I think, I think a lot of things are awesome [chuckles] and a lot of experiences can leave you pretty empty. Particularly in the social media world, I think of a lot of people, I would venture to say most people, pick their next vacation based off of what's gonna make the best picture on social media.

    11. CWChris Williamson1:06:54

        Oh, that's interesting.

    12. MHMorgan Housel1:06:55

        And I've talked about this before. You know what my personal example of this is? This is very subjective. People can disagree with this. Bali.

    13. CWChris Williamson1:07:00

        Okay.

    14. MHMorgan Housel1:07:01

        You ever been to Bali?

    15. CWChris Williamson1:07:02

        I have twice. I came off a moped once.

    16. MHMorgan Housel1:07:03

        Do you like it?

    17. CWChris Williamson1:07:05

        Uh, yeah, I do, actually.

    18. MHMorgan Housel1:07:06

        Okay, so we might differ in this. I think Bali is-

    19. CWChris Williamson1:07:09

        ... super overrated? Not go back.

    20. MHMorgan Housel1:07:10

        Completely overrated!

    21. CWChris Williamson1:07:11

        Okay.

    22. MHMorgan Housel1:07:11

        We went there, and it's not bad, but I've been to so many other tropical places that were 10 times better.

    23. CWChris Williamson1:07:16

        Mm.

    24. MHMorgan Housel1:07:17

        But if you go to Bali, and you put- post a picture on Instagram or TikTok of you going to Bali, you think all these people are gonna be like, "Wow, you went to Bali. That's so cool. It's so exotic."

    25. CWChris Williamson1:07:25

        Super exotic.

    26. MHMorgan Housel1:07:26

        And so I, I, I think there's quite a bit of that, of like, the, the experience thing is, is a different, is-

    27. CWChris Williamson1:07:30

        What are the other... Other than ho- holidays, and what are some other experiences that you think people get the spend money on experiences, not things, thing inverted due to?

    28. MHMorgan Housel1:07:42

        The reason I think travel can be beneficial for a lot of people is sometimes it's not even the destination of where you're going or how beautiful the destination is, it's that you need to travel to kinda give yourself permission to detach from the rest of your life. And so if flying to Maui is the only chance that you can have totally uninterrupted time-

    29. CWChris Williamson1:08:01

        Mm

    30. MHMorgan Housel1:08:01

        ... with your spouse or your kids, you just can't do it at home. You're too distracted at home. Your kids are too distracted at home. You have to fly to Maui in order to sit there and spend hours with each other in each other's presence and company. Like, that's, that's the value of it.
11. 1:12:03 – 1:24:51

    The Transformative Power of Storytelling

    1. MHMorgan Housel1:12:03

       kind of stuff.

    2. CWChris Williamson1:12:03

       What are some of your favorite fiction books?

    3. MHMorgan Housel1:12:05

       Uh, you know, some of those... There, there's, there's one that was a historical fiction of the history of New York City, starting back before it had been populated, when it was truly just, just a, a, a forest inhabited by beavers and whatnot. And then it tracked a series of families, a Dutch family that originally colonized that, and then through the generations, ending up with 9/11.

    4. CWChris Williamson1:12:28

       No way!

    5. MHMorgan Housel1:12:29

       And, and, and tracked it. It's like 1,000-page book.

    6. CWChris Williamson1:12:31

       What's it called?

    7. MHMorgan Housel1:12:31

       Can I... Can you get this out?

    8. CWChris Williamson1:12:32

       Yeah, yeah, yeah, yeah.

    9. MHMorgan Housel1:12:33

       Look at it.

    10. CWChris Williamson1:12:33

        Yeah, get it. Dude, that sounds fucking awesome.

    11. MHMorgan Housel1:12:35

        Amazing.

    12. CWChris Williamson1:12:36

        'Cause when I think historical fiction, what I think is the fall of the Roman Empire or G- Game of Thrones, but without the dragons, and, uh, something that brings... Um, what's that? Man in the High Tower.

    13. MHMorgan Housel1:12:52

        Yeah.

    14. CWChris Williamson1:12:52

        That was kind of similar, right?

    15. MHMorgan Housel1:12:53

        Of if, if, if the Germans won.

    16. CWChris Williamson1:12:54

        Alternative history, but it's moderately modern history.

    17. MHMorgan Housel1:12:58

        Um, 'cause it has a unique name. No, it doesn't have a [chuckles] unique name. The book's name is New York. [chuckles]

    18. CWChris Williamson1:13:04

        Oh, and who's it by?

    19. MHMorgan Housel1:13:05

        Uh, guy's name is Edward Rutherford.

    20. CWChris Williamson1:13:07

        Okay.

    21. MHMorgan Housel1:13:07

        He's written-

    22. CWChris Williamson1:13:08

        I imagine he's lots of books.

    23. MHMorgan Housel1:13:08

        He's written s- he also wrote one on the history of London, and that has a unique name.

    24. CWChris Williamson1:13:12

        Same thing?

    25. MHMorgan Housel1:13:13

        Yes. Uh-... all made up of like-

    26. CWChris Williamson1:13:15

        This is such a cool-

    27. MHMorgan Housel1:13:17

        And, and the history of China.

    28. CWChris Williamson1:13:18

        This is such a cool way to do it. All that you do is take some interesting place and then make a-

    29. MHMorgan Housel1:13:24

        Make a story

    30. CWChris Williamson1:13:24

        ... fake story about-
12. 1:24:51 – 1:32:29

    Why Anger Makes You Feel Superior

    1. CWChris Williamson1:24:51

       crush it. On the, the point of we kind of don't necessarily know what it is that we want-

    2. MHMorgan Housel1:24:56

       Yeah

    3. CWChris Williamson1:24:56

       ... Have you heard the story about Jennie Jerome, Winston Churchill's mother?

    4. MHMorgan Housel1:24:59

       Yeah, Churchill's mom, yeah.

    5. CWChris Williamson1:25:00

       Yeah, so she dined with Prime Minister Benjamin Disraeli and his rival, William Gladstone, on consecutive nights. She was a bit of a sort of Hollywood, uh, socialite, and when asked about her impressions of the two men, she said, "When I left the dining room after sitting next to Gladstone, I thought he was the cleverest man in England. But when I sat next to Disraeli, I left feeling like I was the cleverest woman."

    6. MHMorgan Housel1:25:24

       Mm, that's good. Yeah.

    7. CWChris Williamson1:25:26

       And I think a lot of the time people believe that they want to be charismatic.

    8. MHMorgan Housel1:25:30

       ... you wanna make the other person feel good about themselves.

    9. CWChris Williamson1:25:33

       Bingo.

    10. MHMorgan Housel1:25:33

        Yes.

    11. CWChris Williamson1:25:34

        Some people are interesting, and some people make us feel interesting.

    12. MHMorgan Housel1:25:37

        I w- I w- I was telling someone earlier today about someone who we, we both know, a mutual friend, who when I met this person, I, I came away and I was like, "I think he really likes me. Like, he really seems interested in me." And then I had this moment, I'm like, I, I, I think actually he does that to everybody. I think he has that effect on every single person that he meets.

    13. CWChris Williamson1:25:53

        That's a great point from, uh, Matthew Hussey around dating, that people go on a first date with someone and feel this incredible spark and think that it's something special between them and the person, without realizing that that person is just sparky.

    14. MHMorgan Housel1:26:06

        Yeah.

    15. CWChris Williamson1:26:06

        They just have this effect-

    16. MHMorgan Housel1:26:07

        They do it to anybody

    17. CWChris Williamson1:26:08

        ... on everybody, yeah. But y- the reason that I love that story about Jenny Jerome is a lot of people believe that they want to be more charismatic because they want to walk into a room and for that aura to be electric and everyone to sort of turn and gasp and be so impressed. But when I reflected on the sort of friends that I liked spending the most time around, they weren't the ones that had this m- magnetic aura that was super impressive and dominant or formidable or whatever.

    18. MHMorgan Housel1:26:33

        Made you feel good about yourself.

    19. CWChris Williamson1:26:35

        They were just people that I wanted to hang around with because they made me feel good about myself.

    20. MHMorgan Housel1:26:37

        They make you feel good about-

    21. CWChris Williamson1:26:38

        They make me-

    22. MHMorgan Housel1:26:38

        I think this-

    23. CWChris Williamson1:26:39

        feel interesting

    24. MHMorgan Housel1:26:40

        ... and it's a great thing, what we were talking about earlier, of like, no one's thinking about you as much as you are.

    25. CWChris Williamson1:26:45

        Mm-hmm.

    26. MHMorgan Housel1:26:45

        And so no one's paying that much attention to your aura or your charisma, or if anything, they might find it gross and egotistical. But if that person makes you feel good about yourself and makes you feel good about the person who you are inside of your own head, people love that.

    27. CWChris Williamson1:27:01

        Mm.

    28. MHMorgan Housel1:27:01

        Politicians figured that out a long time ago-

    29. CWChris Williamson1:27:03

        How so?

    30. MHMorgan Housel1:27:03

        ... of making other people feel good about themselves. When you meet someone, it's less about look how powerful I am and more about, like, uh, liking themselves and m- making you feel good about yourself.
13. 1:32:29 – 1:37:28

    Why Men and Women Get Rich Differently

    1. CWChris Williamson1:32:29

       when it comes to finance, it must be really fascinating, and I know that there is a huge world of this, like, a, a financial advice for women.

    2. MHMorgan Housel1:32:36

       Yeah.

    3. CWChris Williamson1:32:36

       And I, I don't know what the split is of, of people who read your books, but it's the same fuel source and a similar outcome that both men and women are looking for when it comes to finance, but their motivations for getting there have to be very different. And the way that they think about money, I would imagine that there is a big sexed difference. Steve Stewart-Williams, who wrote the fantastic The Ape Who Understood the Universe, his new book is A Billion Years of Sex Differences. I can't wait.

    4. MHMorgan Housel1:33:02

       Yes, I, I've seen this. Yeah.

    5. CWChris Williamson1:33:03

       He's gonna be, he's gonna be so canceled, and it's gonna be so fucking brilliant. [chuckles]

    6. MHMorgan Housel1:33:06

       Yeah. Yeah. [chuckles]

    7. CWChris Williamson1:33:07

       And, um, I... There have to be some really interesting sex differences. Like, what is it that i- uh, driving women to accumulate wealth, and what are their fears? And what about men? Because we certainly know that women spend more money on beautification, and men spend more on cars and watches. Uh, men spend more on formidability. Women spend more on, uh, making themselves look younger. Okay, so what does that say about the, uh, the motivations and the dynamics if you start to lose... c- being number 100 in the world and then dropping down to 150-

    8. MHMorgan Housel1:33:41

       Yeah

    9. CWChris Williamson1:33:41

       ... how does that feel to a man, and how does that feel to a woman?

    10. MHMorgan Housel1:33:42

        Right.

    11. CWChris Williamson1:33:43

        So, you know, when you're talking about there is no one size fits all, even from the same culture, same family, same background, same industry, well, those two individual people-

    12. MHMorgan Housel1:33:51

        Yeah

    13. CWChris Williamson1:33:51

        ... if you just pick man versus woman-

    14. MHMorgan Housel1:33:53

        Yes, you get a totally different outcome.

    15. CWChris Williamson1:33:54

        Universes apart.

    16. MHMorgan Housel1:33:55

        I'm, I'm willing to bet, too, I don't have this data, I'm willing to bet if you were to sort through the most reckless Robinhood accounts of people who just blew themselves up-

    17. CWChris Williamson1:34:03

        Mm-hmm

    18. MHMorgan Housel1:34:03

        ... you know, they had a six-figure account balance and bet it all on this thing and lost everything, I'm willing to bet good money 98% of them would be men.

    19. CWChris Williamson1:34:10

        Of course.

    20. MHMorgan Housel1:34:10

        That's, that's just the, the mindset of it. Uh, but I also think, to that point, on the, on the getting rich versus staying rich spectrum-

    21. CWChris Williamson1:34:17

        Mm

    22. MHMorgan Housel1:34:18

        ... I think it tends to be the case that men are better at getting rich because they are willing to take unbelievable risks.

    23. CWChris Williamson1:34:23

        Yep.

    24. MHMorgan Housel1:34:24

        And women are better at staying rich because they have a more developed prefrontal cortex-

    25. CWChris Williamson1:34:27

        I wonder-

    26. MHMorgan Housel1:34:28

        ... who can, who can better size up the risk and issue. Yeah

    27. CWChris Williamson1:34:30

        Hey, I wo- I wonder if this is a really wonderful pro-marriage argument.

    28. MHMorgan Housel1:34:35

        You need both.

    29. CWChris Williamson1:34:35

        Yes.

    30. MHMorgan Housel1:34:36

        Yes.
14. 1:37:28 – 1:42:49

    The Biggest Financial Mistakes Parents Don’t Realise They’re Making

    1. CWChris Williamson1:37:29

       What are some of the biggest well-meaning mistakes that parents make when money enters the picture and it's related to their kids?

    2. MHMorgan Housel1:37:39

       I think a lot of wealthier parents, not super wealthy, but just parents of some low level of means-... have an idea, a very understandable idea of like, "I want to use my money to give my kids a better life, but I don't want them to be spoiled."

    3. CWChris Williamson1:37:54

       Mm-hmm.

    4. MHMorgan Housel1:37:54

       And the way that they go about that with very well-meaning intentions is being like, "Look, we have money to help this child, but they need to go do it themselves. They need to go earn themselves, and, and, you know, and, and suffer on their own and whatnot." And inadvertently, what often happens is the parent thinks that they are teaching the kid, uh, hard work and dedication and integrity, and the message that the kid actually hears is humiliation, that the parents could be helping them, but they're not, because I'm not worthy of their help.

    5. CWChris Williamson1:38:24

       Oh, oh, that's-

    6. MHMorgan Housel1:38:24

       And it's very-- And in the mind of the adult-

    7. CWChris Williamson1:38:26

       Yeah

    8. MHMorgan Housel1:38:26

       ... in the mind of the parent, that doesn't make a lot of sense. In the mind of a 14-year-old, that's all he can hear, is, "I'm not worthy of their help." And a lot-- And it, it goes astray. I've told this story before about a, a good friend of mine whose grandfather was very wealthy and didn't want his kids and grandkids to be spoiled, and so when they went skiing, his grandfather would say, "If you want me to buy you a lift ticket, you first have to hike up the hill. And if you do that and ski down, then I'll buy you a lift ticket. Show me that you are capable of hard work." And so my, my friend tells the story. He says, "The lesson that the grandfather wanted to teach us was hard work, and but the lessons that we actually learned was Grandpa's an asshole." That was the lesson that they actually heard from it, was humiliation from it, and I think there's a lot of, of, of, of versions of that. Another version of it is it's extremely difficult for anyone to demote their lifestyle, to be at one level and then have to tick down even a small amount. People can absolutely lose their minds-

    9. CWChris Williamson1:39:22

       Downsize the car, downsize the house

    10. MHMorgan Housel1:39:24

        ... if they're downsizing. And so if you are a parent of any kind of means or wealth, you have to be very diffic-- uh, careful picking your lifestyle, knowing that that will become the baseline barest of expectations for your child when they are adults.

    11. CWChris Williamson1:39:37

        If you're in a twenty-thousand-square-foot house, you've got-

    12. MHMorgan Housel1:39:40

        That's the baseline.

    13. CWChris Williamson1:39:41

        Yeah.

    14. MHMorgan Housel1:39:42

        That's not a mansion. To, to you, the parent, it's a mansion because you grew up in something smaller. To your kid, that is normal now. And you think about this. What if that child wants to be a kindergarten teacher, but they can't? They know that they can't live that lifestyle 'cause they got accustomed to something else, so now they have to try to become a lawyer or a doctor or an entrepreneur, even if they don't want to do it.

    15. CWChris Williamson1:40:00

        I wonder if this explains another element on top of the psychological and relational and all the rest of it, why divorce is so painful. Because if you're splitting the finances or even not-

    16. MHMorgan Housel1:40:14

        Everything's half, right!

    17. CWChris Williamson1:40:15

        With a prenup. Yeah, yeah, yeah, there's, there's half as much to go around-

    18. MHMorgan Housel1:40:17

        Yeah

    19. CWChris Williamson1:40:17

        ... which means you don't get the same house and put it in half. You get two houses that are less than half as shit.

    20. MHMorgan Housel1:40:26

        Yeah.

    21. CWChris Williamson1:40:26

        Like, you-

    22. MHMorgan Housel1:40:27

        Yeah

    23. CWChris Williamson1:40:27

        ... because y- you've got all of these additional costs that you need to pay now, and you've got to go between the two, and maybe you shared a car, but now you've got to have t- two cars, and that means that both cars are less than half as good.

    24. MHMorgan Housel1:40:37

        For sure. Right, right. I think a very core human feeling that feels incredible when you have it and is devastating when you don't is generational improvement. Is to say that I, I'm living a, a better life than my parents.

    25. CWChris Williamson1:40:48

        Yeah.

    26. MHMorgan Housel1:40:48

        And as parents, it feels so good when you look at your children and say, "They lived a better life than, than we did." That is a core thing, and if you don't have it, it's difficult to have a good life. If you say, "My parents raised me up here, and now a- as an adult, I'm down here," even if down here is still a great life-

    27. CWChris Williamson1:41:05

        Yeah

    28. MHMorgan Housel1:41:05

        ... it's very difficult to wrap your head around.

    29. CWChris Williamson1:41:07

        Have you looked at intergenerational competition theory, IGCT?

    30. MHMorgan Housel1:41:10

        No.
15. 1:42:49 – 1:52:25

    How the Housing Crisis Reshaped an Entire Generation

    1. CWChris Williamson1:42:49

       Uh, what's your... Give me-- You must have looked at this, sort of the, the financial state of Gen Z and of sort of modernity. What are some lesser-known or unpopular insights into the wealth of Gen Z and previous generations?

    2. MHMorgan Housel1:43:04

       Well, the-- look, by and large, there has been wage growth, real wage growth, uh, growth adjusted for inflation over the last several generations. On average, that's true. On a whole, that's true. The areas in which it is absolutely not true, that is just dramatically more expensive today than it was in any previous generation, is housing, and that's the most important thing to people. In terms of, like, box checking into adulthood, buying a house is near the top, to where if you can feel that you can do it, you feel like you're really making progress. "I'm an adult. I own my own house. I'm doing it." And if you can't do it, you feel like you're just kind of stuck down in some lower level that you'll, you'll never get out of. And so when people talk about the price of housing, they, they talk about it like, like it's a spreadsheet problem, like it's just, "Oh, we got to get down mortgage rates." It's a social problem, and I think almost every social problem today that we have in any country, in America or any other country that has expensive housing, is downstream of housing affordability. If you can't afford your house, you're less likely to get married, you're less likely to have kids, you're more likely to abu- use drugs, you're more likely to have poor mental health. It all stems down from lack of housing, and even something like, like, like drug addiction that you wouldn't think would be that attached to housing.

    3. CWChris Williamson1:44:14

       Mm-hmm.

    4. MHMorgan Housel1:44:15

       ... when housing is very expensive, almost by definition, uh, the bottom sliver of society becomes homeless. 'Cause there's, there's not- housing is expensive, 'cause there's not enough of it.

    5. CWChris Williamson1:44:23

       Mm-hmm.

    6. MHMorgan Housel1:44:24

       Almost definitionally, people become homeless.

    7. CWChris Williamson1:44:26

       Supply and demand.

    8. MHMorgan Housel1:44:26

       What do a lot of the, the, so many people do when they become homeless to gain a little bit of hope in their life?

    9. CWChris Williamson1:44:31

       Drugs.

    10. MHMorgan Housel1:44:31

        Heroin. And so I think it seems crazy, but you can- there's so many of those where you think housing affordability is a housing problem, and it is just a social problem all the way down.

    11. CWChris Williamson1:44:40

        Wow!

    12. MHMorgan Housel1:44:41

        We had a, a family friend, and she was in her, uh, late 20s, happily married, both of them have good jobs, uh, want to be parents, but can't afford a house where we live and are delaying, delaying, delaying trying to have kids until they can afford a house, which in many cities, including the city I live in, seems like a, like, good luck waiting kind of thing.

    13. CWChris Williamson1:45:00

        Yep.

    14. MHMorgan Housel1:45:01

        And so it's a, it's a huge... It's, it's, it's the biggest social problem I think that we have in America.

    15. CWChris Williamson1:45:06

        W- what is the relative-- Do you know the data on how actual wages, median wages, median house price at what... Is it because house prices have gone up an awful lot and wages haven't gone up in line with it? Is it because of interest rates? Is it... What, what, what is it?

    16. MHMorgan Housel1:45:22

        The thing that's so, I think should be agon- should make you angry about the housing issue, is that it's the easiest issue to identify why it's a problem, and it's the easiest thing to fix. We don't build enough houses. That's it. It's the easiest supply and demand thing, where we're probably five million houses short in America that we, that we should have built, then we didn't. Why didn't we build them? We have plenty of construction workers. We have plenty of capital. There's plenty of demand. Almost all the way down, it's a zoning issue. Whereas in most cities in America, where people want homes to be, it's illegal to build them. You can't get it properly zoned, or it takes too long for most developers to put up with it.

    17. CWChris Williamson1:46:03

        Okay.

    18. MHMorgan Housel1:46:04

        And so it's purely a... It's a choice. It's a choice to be in this situation that could end tomorrow-

    19. CWChris Williamson1:46:10

        Hang on

    20. MHMorgan Housel1:46:10

        ... if people, if people understood the problem enough.

    21. CWChris Williamson1:46:12

        Hang on. So, we have the money to build the houses?

    22. MHMorgan Housel1:46:19

        Of course.

    23. CWChris Williamson1:46:20

        And the people to be able to-

    24. MHMorgan Housel1:46:22

        The, the, the demand to do it.

    25. CWChris Williamson1:46:23

        The people to be able to build them-

    26. MHMorgan Housel1:46:24

        Right

    27. CWChris Williamson1:46:25

        ... and the materials to be able to make them-

    28. MHMorgan Housel1:46:26

        Of course

    29. CWChris Williamson1:46:26

        ... and the people to live in them-

    30. MHMorgan Housel1:46:28

        Yes
16. 1:52:25 – 1:59:34

    Why People are So Scared to Spend Money

    1. CWChris Williamson1:52:25

       Okay. Art of Spending Money talked about a million different ways that you can get spending money wrong. What about not spending money? Because there are the misers.

    2. MHMorgan Housel1:52:35

       Huge, yeah.

    3. CWChris Williamson1:52:35

       There's Ebenezer Scrooge on the other side. Bill Perkins' book, Die With Zero, is fucking fantastic.

    4. MHMorgan Housel1:52:40

       Fantastic, yeah.

    5. CWChris Williamson1:52:41

       Wonderful. Um, what is your perspective, or what is there to know about people who can't put their hand in their pocket as opposed to keep putting it in too frequently?

    6. MHMorgan Housel1:52:52

       I've two, two views on this. One is, uh, it's just as broken and detrimental to have a, a mentality of "I can't spend this money" to the person who can't spend it fast enough and runs himself over a cliff. It's, it's just as much of a mental illness in that situation, and if you talk to a lot of financial advisors, they will tell you the number one psychological ailment of their clients are baby boomers who have saved several million dollars, can af- easily afford to safely have a wonderful retirement and can't bring themselves to spend a penny of it because their financial identity is number goes up every year.

    7. CWChris Williamson1:53:26

       I'm a saver.

    8. MHMorgan Housel1:53:27

       I'm a saver-

    9. CWChris Williamson1:53:28

       Yeah

    10. MHMorgan Housel1:53:28

        ... and my net worth goes up every year, and the idea of, of starting to entrench that down is, is so painful to them. The other side of this, of why I think it's actually half rational, is we're fortunate to live in a world where if you retire at 60, there's a meaningful chance you're gonna live into your 90s. And so you're talking about it was not that long ago, I mean, 60 or 70 years ago, the idea of retirement by and large didn't exist for most people.

    11. CWChris Williamson1:53:52

        People just worked up until they-

    12. MHMorgan Housel1:53:53

        They, they worked until they died

    13. CWChris Williamson1:53:54

        ... couldn't work anymore?

    14. MHMorgan Housel1:53:54

        Your retirement party was also your funeral. That was, that was how it worked. And retirement was something that rich people could afford to do, but ordinary people, it didn't work at all. And then even if you go back to the 1980s, you retired at 60, you're probably gonna die at 68. So you're talking, you might need to fund a retirement for three, five, maybe 10 years. Now you're legitimately looking at people who might need to fund a retirement for 40 years. And the amount of money that you- so the idea that they are worried about spending too quickly, I mean, like, yeah, good worry. You should think about that. [chuckles]

    15. CWChris Williamson1:54:21

        Yeah, between, uh, some people getting to wealth escape velocity and longevity increasing lifespan, y- you could end up with... Well, I mean, even for your adult life, you're talking about only maybe about 50% of your time being spent working.

    16. MHMorgan Housel1:54:36

        Yeah.

    17. CWChris Williamson1:54:36

        If you live until you're 90, you-

    18. MHMorgan Housel1:54:38

        And you, and you retire at 65, you got... I mean, that's, that's, uh, that's a big-

    19. CWChris Williamson1:54:42

        Not far off

    20. MHMorgan Housel1:54:42

        ... and it's a period of time that you need to fund that would've been uh, just such a magical thing to my grandparents' generation, to our grandparents' generation. So the idea that people think about that longevity and don't want to overspend makes a lot of sense, and you can match that with people who still have a mental affliction of, "I can't bear seeing the numbers go down." I don't know if I'll do a good job with this, honestly.

    21. CWChris Williamson1:55:04

        Right.

    22. MHMorgan Housel1:55:04

        Now, I'm in wealth accumulation growth mode right now.

    23. CWChris Williamson1:55:07

        Yeah.

    24. MHMorgan Housel1:55:08

        When I'm 80, I don't know if I'll do a good job of it because I do feel like, in a way, that's probably not good.

    25. CWChris Williamson1:55:12

        You know what I think-

    26. MHMorgan Housel1:55:13

        Number go up is important to my identity.

    27. CWChris Williamson1:55:15

        Yeah, I think a good line from Bill Perkins' book about give your kids their inheritance when they're 30-

    28. MHMorgan Housel1:55:22

        Mm.

    29. CWChris Williamson1:55:23

        I think-

    30. MHMorgan Housel1:55:23

        That's my favorite takeaway from his book and changed profoundly how I think about inheritance for my children.
17. 1:59:34 – 2:00:07

    Where to Find Morgan

    1. CWChris Williamson1:59:34

       Morgan, you're the GOAT, dude. Episode eight or nine or whatever this is, you're so fantastic.

    2. MHMorgan Housel1:59:38

       Let's do it again. Can't wait.

    3. CWChris Williamson1:59:39

       I can't wait. Uh, what have you got out? Where should people go to get all of the things that you do?

    4. MHMorgan Housel1:59:44

       You know, the three books I've written, Psychology of Money, Same as Ever, The Art of Spending Money, every, every half-decent thought that's ever entered my head about money is in those three books.

    5. CWChris Williamson1:59:52

       Unreal. I appreciate you, man.

    6. MHMorgan Housel1:59:53

       Thanks, Chris.

    7. CWChris Williamson1:59:53

       Next time.

    8. MHMorgan Housel1:59:54

       Thank you. [upbeat music]

    9. CWChris Williamson1:59:55

       Thank you very much for tuning in. Congratulations for making it to the end of an entire episode. Uh, another one that I think you'll enjoy is right here.

Episode duration: 2:00:07