Morgan Housel — Contrarian Money and Writing Advice, Three Simple Goals to Guide Your Life, and More

1. 0:00 – 1:29

   Intro

   1. TFTim Ferriss0:00

      [upbeat music] Hello, boys and girls, ladies and germs. This is Tim Ferriss. Welcome to another episode of The Tim Ferriss Show. Today we have a repeat guest, and good Lord, did his last episode do well. It did spectacularly well. You guys loved it. So back by popular demand is Morgan Housel. You can find him on Twitter at Morgan Housel, H-O-U-S-E-L. He is a partner at The Collaborative Fund. His book, The Psychology of Money, which we really dug into in depth last time, has sold more than three million copies and has been translated into 53 languages. Didn't even know there were that many languages. I'm kidding, of course. He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers, and winner of The New York Times Sidney Award. I might be jealous, I might be jealous. In 2022 [laughs] MarketWatch named him one of the 50 most influential people in markets. Good friend to have. He serves on the board of directors at Markel. Morgan's new book is Same As Ever, subtitle: A Guide to What Never Changes. You can find my first, and as I mentioned before, widely popular interview and very tactically dense interview with Morgan at tim.blog/morganhousel. And without further ado, morganhousel.com and Morgan himself. Nice to see you again.

   2. MHMorgan Housel1:26

      Nice to see you, Tim. Happy to be back. Thanks for having me.

2. 1:29 – 6:38

   Buffett's Snickers.

   1. TFTim Ferriss1:29

      Absolutely. So let's start with a cryptic prompt, and I'll let you run with it, which is Buffett Snickers. Where should we go with that?

   2. MHMorgan Housel1:38

      So after Psychology of Money, I was really debating what to write next for, for my next book. I'd thrown around all these different topics and I, I had some good ideas, but it really hadn't hit me what I wanted to write about. And I was at a retreat with a group of investors about three years ago, and one of the investors, w- he was, he was, he was actually a CEO of a large public company, and he's pretty good friends with Warren Buffett. And he told this story that I had never heard before about Buffett, and it's, it's pretty rare to have a story about Buffett that I've never heard, that no one's ev- Like, everybody knows every Buffett story, but this was a new one. And he said, the CEO said that in 2009, during kinda the peak of the Great Recession when the economy was in pieces, he was driving around Omaha with Warren Buffett. Buffett was driving, he was the passenger. And the CEO said to Warren, and they're driving past, like, closed up shops during the Great Recession, like the, like the whole country's in tatters. And the CEO said, "Warren, how are we ever gonna pull out of this? Like, the country's never gonna be the same after this." And Warren said... Let's call this guy Jim. That's not his real name. But he said, "Jim, do you know what the best-selling candy bar was in 1962?" And Jim said, "No." And Warren said, "Snickers." And Warren said, "Do you know what the best-selling candy bar is today?" And Jim said, "No." And Warren said, "Snickers."

   3. TFTim Ferriss2:52

      [laughs]

   4. MHMorgan Housel2:52

      And that was the end of the conversation. He just stopped right there. And that was his answer to, is the country ever gonna be the same? And I think if you look at Warren Buffett's success, he has been betting on things that stay the same forever.

   5. TFTim Ferriss3:05

      Mm-hmm.

   6. MHMorgan Housel3:06

      And it really hit me w- in that moment that this was the book that I wanted to write, because for my entire career as a writer, I had been, cynical is probably the right word, a- and just astounded at how bad people are at forecasting. Not just in finance and the stock market and the economy, but in politics, and it's, it's been like that forever. Like, the most famous expert's ability to predict what's gonna happen next is atrocious.

   7. TFTim Ferriss3:29

      [laughs]

   8. MHMorgan Housel3:29

      And it's always been atrocious. A- again, that, that just made me cynical. It was just like the whole pundit industry is a scam. That was kinda my view. And then it was like, okay, is there a positive spin to this? Like, h- how can I use knowing how bad we are at forecasting to try to, like, do better at, at my ability to look forward in the future? And I think what I, what I settled on is people are so bad at predicting the future because they're always trying to predict what's gonna change.

   9. TFTim Ferriss3:55

      Mm.

   10. MHMorgan Housel3:55

       They're always trying to predict what's the next new technology, who's gonna win the next election, when's the next recession gonna come. And our ability to do that is, is zero. It's virtually zero.

   11. TFTim Ferriss4:04

       [laughs]

   12. MHMorgan Housel4:05

       But for the people like Buffett who focus on what's not going to change, their ability to understand the future is actually pretty good.

   13. TFTim Ferriss4:11

       Mm.

   14. MHMorgan Housel4:12

       And so they're focusing on parts of human behavior that have never changed, that were true 500 years ago, that will be true 500 years from now.

   15. TFTim Ferriss4:19

       Mm.

   16. MHMorgan Housel4:19

       And so I have no idea when the next recession's gonna come, but I know exactly how people are gonna respond to greed and fear, 'cause that's never changed. There's a great quote from Naval where he says, "If your life played out 1,000 times, 1,000 different iterations of your life, what would be true in 999 of them?" And those are the things that you wanna focus on in life, because those are not things that are guided by luck or chance or, you know, just the quirky ways of the world. I love that framing. And it also occurred to me that a lot of what I had been writing about for the previous 15 years were things that never change. I think in many ways Psychology of Money is the psychology of you, the individual. It's like, what's going through your head? And Same As Ever is the psychology of us as a collective. It's just what do we keep doing as a society, as a group over and over and over again? O- one other thing that, that really struck me here that was kinda influential to this book for me was one of my favorite books is a book called The Great Depression: A Diary.

   17. TFTim Ferriss5:16

       Mm-hmm.

   18. MHMorgan Housel5:17

       It's written by a lawyer named Benjamin Roth, who during the Great Depression kept a very detailed diary about what he saw all over his town in Ohio that his son published. And it's like, it's the best economics book ever written. And during that diary, there's one diary entry from I think 1932, where he says, "What I see around the Great Depression of 1932, it reminds me exactly of what happened in 1920 and in 1878 and in 1865." And he's like, "It's the same forces happening over and over and over again." And I thought, "Oh, that's really interesting." And then a couple pages later it dawned on me that what he was writing in 1932 is exactly what happened in 2008.

   19. TFTim Ferriss5:59

       Mm.

   20. MHMorgan Housel5:59

       The way that people were dealing with uncertainty and greed and fear, it never changes. It's the same movie over and over and over again. And so if you focus on those things that never change, I think it's our only ability to really understand the future, your future, society's future, the economy's future.

   21. TFTim Ferriss6:15

       Hmm.

   22. MHMorgan Housel6:16

       But it's, it's just not as exciting as focusing on what is going to change. Like, all of the attention in the media focuses on what's the next big technology, what is gonna change.

   23. TFTim Ferriss6:24

       Hence the news.

   24. MHMorgan Housel6:24

       And so the premise of this book is just like... [laughs] Exactly. It's because that's exciting and it's fun. So the premise of this book is like let's stop doing that. Let's focus on what we know with certainty is gonna be a part of your future, and that's the best that we can do to see the future.

3. 6:38 – 12:14

   What prompted Morgan to write Same As Ever?

   1. TFTim Ferriss6:38

      I've been excited to have this conversation for a couple of reasons, and I'll sort of edge into those by way of maybe a few anecdotes. So one, I'm not gonna get the attribution right and I'm not gonna get the phrasing totally on point, but there was an announcement, I, I think it might've been Donald Knuth, K-N-U-T-H, but there's a blog post that I wrote some time ago which was looking for decisions that remove a thousand decisions, and he made an announcement when he stopped using email. Now, I'd be curious to know how well that's held up over time. However, [laughs] he said, in effect, "I realize that I no longer want to stay on top of things. I want to get to the bottom of things." So that phrasing that has really stuck with me, and maybe we'll come back to stories, and that's... His entire email was maybe a mini story [laughs] and had an arc, and that has stuck with me for years now. The second is in the last few weeks I've become very interested in ancient Sumer and [laughs] the dynasties of, in Ur and Uruk in modern-day Iraq, and looking at the birth of writing as we understand it in cuneiform, which I never knew was cuneiform instead of, uh, [laughs] a different pronunciation. In any case, the stories as you listen to them in these various podcasts, if you did a search and replace with a handful of names, this is true for Letters From a Stoic or The Moral Letters to Lucilius as well from Seneca the Younger, if you just did a search replace with some names, it's the same set of dynamics. It's the same foibles of human nature. It's the same consequences of fear, greed, wrath, fill in the blank. And my question for you is, given how much you've thought about writing, given how much you have written, I mean, you've written I would imagine hundreds, thousands of pieces, and we spoke quite a bit about writing in our last conversation. And the fact that writing is on some level or, or good writing, at least the type of writing that we do, is sort of intrinsically selfish, right? We're writing for at least an audience of one, and that I'm just gonna do a quick recap on some of the things that stuck with me from our last conversation which have proven to be true again and again and again. For instance, and please fact check me, but good writing i- is easy, bad writing is hard, right? If you're just like struggling through word by word this slog of a piece, chances are it's just not gonna be good. [laughs]

   2. MHMorgan Housel9:08

      Yeah.

   3. TFTim Ferriss9:08

      Also, if you have writer's block, there's a damn good chance it's just a shitty idea or a mediocre idea-

   4. MHMorgan Housel9:14

      Yeah

   5. TFTim Ferriss9:14

      ... that you're trying to force into s- some existence. Of all the things that you could write about, how did you choose to do this, especially after the success of your last book?

   6. MHMorgan Housel9:26

      I was told many years ago by Jason Zweig, a great friend and mentor of mine from The Wall Street Journal, that you should only write a book if in your brain you have to do it. Not like, "Oh, I should do it," or like, "Oh, that's a lot of money that I could get for doing it." Only doing it if you're like, "I can't sleep until I get these ideas on paper." And even in blog form, for my entire career, that's always been the case. I'm not a, you know, sit down at my desk at 9:00 and publish by 4:00 kind of person. I've always been I'm just gonna toss around a bunch of ideas in my head, and I'm only gonna sit down and write when I, I can't do anything else until I get this done. The idea is so fresh and it's just spilling out of me. And there's been plenty of times when we'll be like grocery shopping with my wife and kids and I'm basically just like, "I, I have to go. I need to go sit down at the computer and write this out." And the opposite of that, if I'm like, "Oh, I should probably write something this week. Let's force out the words," it's garbage every single time.

   7. TFTim Ferriss10:18

      [laughs]

   8. MHMorgan Housel10:19

      And so I feel like I didn't necessarily choose to write this book. I think I would've been really happy just stop, just stopping at Psychology of Money and saying, "That's great. I'm just gonna quit while I'm ahead," which is a general idea that I really admire. But I think it got to the point where I was like, "I really, I have to do this." And it struck me around, it was kinda the early days of COVID when this really struck me. I was writing almost every week, almost every day about things that never change and putting a lot of thought into it, and it really became like a philosophy that guides my entire life. And I think to, to tell you the truth, it relieved a lot of anxiety from my life once I kind of internalized a lot of these ideas. Anxiety about the future. What's my future hold? What's the economy gonna do next? During the early days of COVID, what's COVID gonna do next? Once you admit that we have no idea, we have no clue, we have no clue what's gonna happen, but that doesn't mean that you're giving up or just becoming a fatalist. It's just like let's shift our attention to what we know is gonna be true. And I, I, I honestly think I became happier and calmer and like my life improved once I got to that point.

   9. TFTim Ferriss11:19

      So in a sense, is that a serenity prayer [laughs] applied to your life through the lens of [laughs] human nature over time? I mean, in a sense. I mean, separating the things that you can change from the things that you cannot, the things that you can predict with some certainty versus the many things that you cannot. Is that what reduced the anxiety?

   10. MHMorgan Housel11:42

       I think so. And of course, this is not an idea I came up with. That's kind of the core of stoicism. It's been around for 2,000 years.

   11. TFTim Ferriss11:48

       Sure. Mm-hmm.

   12. MHMorgan Housel11:48

       It's like what can you control and what can you not? Just you, you really need to be able to figure out how to s- to separate those. So I'm not claiming at all that I came up with these ideas. But once it became crystallised for me-

   13. TFTim Ferriss11:56

       Wait a second. You created Buddhism and stoicism? [laughs]

   14. MHMorgan Housel11:59

       [laughs] Exactly.

   15. TFTim Ferriss12:00

       Good for you.

   16. MHMorgan Housel12:01

       In, in, in 2020. It was amazing.

   17. TFTim Ferriss12:03

       Exactly. [laughs]

   18. MHMorgan Housel12:03

       It was a very productive year. But once I kind of crystallized them and c- and I could contextualize that in a way that made a lot of sense to me

   19. TFTim Ferriss12:11

       Mm-hmm

   20. MHMorgan Housel12:11

       I honestly think it improved my life in a, in a pretty profound

4. 12:14 – 16:24

   Morgan's worst advice for aspiring writers is what works for him.

   1. MHMorgan Housel12:14

      way.

   2. TFTim Ferriss12:15

      So we're gonna come back to that, and we're gonna come back to it quickly, but since I am getting back into writing, and I've been experimenting with fiction largely, but I'd like to actually write some non-fiction blog posts in the, in the old style. [laughs] Back when there were blog rolls. I wanna f- really rewind the clock and go retro with some of my writing, because I do have some ideas that, that are, are so persistent that I feel like it would be beneficial for me to write in order to think about them more clearly. And what we didn't cover in our last conversation was how you draft your first drafts or your rough drafts. Because you have these ideas, you're at the grocery store, you're out on a walk, you're in the shower, whatever it might be. What does it look like when you put first words on paper or screen? Because that is where I often procrastinate, is facing the empty screen, the blinking cursor. What's your move there?

   3. MHMorgan Housel13:15

      I first need to disclose that what I'm about to say is probably the worst writing advice you could give someone, so if you are a new writer or an aspiring writer, like, plug your ears and fast-forward this.

   4. TFTim Ferriss13:23

      That'll be the headline-

   5. MHMorgan Housel13:24

      But I've always been-

   6. TFTim Ferriss13:25

      "Including the worst advice-" [laughs]

   7. MHMorgan Housel13:27

      I've always been-

   8. TFTim Ferriss13:27

      "... for writers."

   9. MHMorgan Housel13:28

      I've always been like this, and I, I don't think it's, it's a good strategy, but it's been my strategy. I'm kind of a first draft and publish writer.

   10. TFTim Ferriss13:37

       [laughs]

   11. MHMorgan Housel13:37

       I think the best way to write is to write a shitty first draft, get it done, and then go back and edit and clean up and rewrite and whatnot. I've always been one sentence at a time, and when I'm done with that sentence, it's final.

   12. TFTim Ferriss13:49

       Hmm.

   13. MHMorgan Housel13:49

       So by the time I get to the bottom of the article or the bottom of a, of a chapter, it's pretty much done. But that's not because I can write a perfect first draft, it's because I'm not gonna leave this sentence that I'm writing until it's perfect. I'm not gonna move on to the next sentence until every word is perfect. That's always how I've been.

   14. TFTim Ferriss14:07

       I believe Kurt Vonnegut talked about swoopers and plotters. I may be getting the, the wording wrong, but swoopers are the vomit a first draft, refine, refine into a diamond, and then the plotters are the line at a time, one small facet at a time, and then they're kind of done. I tend to err on the side of being closer to that myself, however-

   15. MHMorgan Housel14:30

       Yeah

   16. TFTim Ferriss14:30

       ... that doesn't seem to work unless you have s- a clear idea of what your structure's gonna look like, or at least of where you're gonna start, so that you're not then endlessly swapping things around or scrapping the first half, in which case you're edging more towards that refine, refine, refine. So how do you figure out the structure of a piece or what your lead is gonna be?

   17. MHMorgan Housel14:53

       When I start an article or a chapter even, I have no idea where it's gonna go. It's not like all the ideas are in my head and I just need to put them out on paper, and I feel like the process of writing is the research process for me.

   18. TFTim Ferriss15:06

       Mm-hmm.

   19. MHMorgan Housel15:06

       And so that's kinda where the plotter style comes in, which is I write one sentence and I sit there and stare at it, and it's like, "Oh, that reminds me of this. Oh, oh, like, that prompts another thought that I had. This, that paragraph I just wrote reminds me of something else I can pull in." That's, that's really where it comes from. So coming up with a, with an idea, honestly, I think most blog posts I start with a headline, and I'm like, "I wanna write an article called Everything is Cyclical," whatever it might be, and let's just run with that. Like, that idea, like, 'cause everything is cyclical, and I'm sure I could put together a story about why that is and a couple examples of that, so let's just start there and see what happens. And then I just start throwing things on, on the page. And usually within the process of a blog post or a book chapter, I'll go for three walks around my neighborhood, and during that walk I'm 100% focused on what I'm writing and thinking about, "What did I just write? Is that, is that true? Oh, and actually that reminds me of something else." So that's always the process. If I'm sitting at my desk, I really can't get my brain to work as well as it is as when I'm getting up and walking around.

   20. TFTim Ferriss16:06

       Mm.

   21. MHMorgan Housel16:06

       So very often too, if the weather's bad outside, in the middle of writing I'll, like, get up and fold the laundry or get up and do the dishes, get up and just walk around the hou- It's just like I think movement is really critical to forming new thoughts and moving the piece along, which is so critical when you don't know where it's gonna go when you started writing it.

   22. TFTim Ferriss16:23

       Mm-hmm.

5. 16:24 – 19:56

   The upsides of being rich and anonymous.

   1. TFTim Ferriss16:25

      So let's look at a post of yours, and I read three in prepping for this conversation. Respect and Admiration, Rich and Anonymous, and then Expectation Debt. How did you decide to write Rich and Anonymous? And maybe that's a way to move into discussing some of the content, some of the, some of the messages, some of the stories in that piece, but how did that come to be?

   2. MHMorgan Housel16:53

      Rich and Anonymous came to be because, this was probably about two years ago, I did a consulting session with a group of NBA athletes. Most of them were NBA rookies. And the topic of conversation was everybody knows that NBA athletes, all pro athletes, have a very high rate of going bankrupt. They have a three to five-year career where they make tens of millions of dollars, they blow it all, and then they're done. Everyone knows the story. So the topic of conversation was like, how do we prevent that? And one of the athletes, who's 19, from the NBA, he had, he had very recently been drafted to a deca-million dollar contract. Massive amount of money. He brought up this fact that I thought was so astute, particularly for a 19-year-old, and he said, "When you grow up in inner city poverty and then you, you make tens of millions of dollars at age 19, that's not your money. That is mom's money, dad's money, cousin's money, brother's money, neighbor's money, grandma's money. You can't just tell all of them, 'I got my money, like, good luck to you all back in inner city poverty.'" It doesn't work like that. And he said, "The biggest reason that athletes go bankrupt is not because they bought themselves a mansion, it's because they bought their fifth cousin a modest house, and they felt so much obligation to help them."

   3. TFTim Ferriss18:01

      Mm.

   4. MHMorgan Housel18:01

      So that was this idea that I came up... I don't know if I came up with it, but I, I called it social debt. And I think with every dollar, uh, that you earn comes some amount of social debt. And for somebody like an athlete or a movie star, there's a ton of social... For every dollar that they earn, there's probably $4 of social debt that comes on top of it. And it's very easy to track your net worth. It's incredibly difficult to track your social debt. It's this obscure-

   5. TFTim Ferriss18:25

      Mm-hmm

   6. MHMorgan Housel18:25

      ... figure, but it's always there. And even if we're not talking about athlete, you know, deca-million-dollar athletes, I think for the average person who gets a raise, you know, their salary goes from 50,000 to 55,000. With that even comes an increase in expectations of now they expect to live in a bigger apartment, to wear nicer clothes, to eat out more, and just their expectation increase that comes with that is a form of social debt that came with it. And so that is this idea, I'm pretty sure that Naval came up with this phrasing too, that the best spot you wanna be in in life is rich and anonymous.

   7. TFTim Ferriss18:56

      Mm.

   8. MHMorgan Housel18:56

      The worst is poor and famous, which was maybe like Monica Lewinsky or som- something. Like very famous and no money. That's the worst position you can be in. Rich and anonymous is the best. I spent some time with a family two or three years ago. The family is worth eight billion dollars, and if you Google their name, nothing comes up. They are completely anonymous. They're not on any Forbes list. They've not done any interviews. They donate their money anonymously, and that's all very intentional. And so this family has, is worth eight billion dollars, and they have virtually no social debt. Like, they could just walk down the street. They can go to any cheap restaurant. Nobody knows who they are, and they've been very cognizant of doing that. And I, when I see how happy they are and how well-balanced they are, how well-balanced their children were, it was like, that's the spot that everyone wants to be in. So even if you're not, uh, worth eight billion dollars like that, realizing that every dollar of net worth that you gain comes with probably at least a couple pennies of social debt, I think is a really important thing to think about

6. 19:56 – 28:22

   Tips for raising unspoiled kids.

   1. MHMorgan Housel19:56

      and contemplate.

   2. TFTim Ferriss19:57

      So let me ask you more about this family. All right. Eight billion. That's non-trivial. So you would think that this family would be on many radars, many lists, whether they want to appear there or not, and I think it's probably sector dependent. I don't want you to share anything you don't want to share, but there may be some sectors, there are more sectors that are prone to being publicly exposed or of public interest than others, right? If you're a defense contractor, maybe the people who read People magazine are not as interested as if you are a movie star or fill in the blank, right? But what are some of the decisions outside of anonymous donations that you think were critical for them or might have been part of this plan? And then I have, I have some other questions related to their kids and the happiness of their kids because last time we spoke about, I'm blanking on the name of the book, but the, I think it was the Vanderbilt-

   3. MHMorgan Housel20:57

      Yep

   4. TFTim Ferriss20:58

      ... fortune-

   5. MHMorgan Housel20:59

      Yeah

   6. TFTim Ferriss20:59

      ... and how almost uniformly miserable everyone was-

   7. MHMorgan Housel21:03

      Yeah

   8. TFTim Ferriss21:03

      ... downstream of the inflation adjusted whatever crazy number it was, $400 billion or something like that.

   9. MHMorgan Housel21:10

      Yeah.

   10. TFTim Ferriss21:10

       So coming back to the, the question that I, I led with, what were some of the, the decisions or types of decisions they made that contributed to that outcome?

   11. MHMorgan Housel21:22

       What's so interesting about this family, and of course I'm not gonna give any details to disclose who they were, but they made their money in a very ethical way. It's not like they're trying to hide the fact that, of how they made their money. And what's also interesting is that if I told you the name of the company, you would know it.

   12. TFTim Ferriss21:34

       Hmm.

   13. MHMorgan Housel21:34

       It's not this hidden, obscure business. You would know what it is. But they've, again, they've been very intentional about doing everything anonymously, not being part of any fundraiser gala, not, y- living... Actually, they live a fairly good life.

   14. TFTim Ferriss21:48

       I would hope so. [laughs]

   15. MHMorgan Housel21:50

       [laughs] But it was based around this idea of how do we not ruin our children? I think that was really it. How do we raise children who are well-balanced and understand the world and are not treated differently than anyone else? Back to the Vanderbilts, which is such a crazy story. There is this anecdote in one of the books where one of the Vanderbilt grandchildren wants to learn how to play soccer. So they gather up all the servants in the mansion that they live in-

   16. TFTim Ferriss22:14

       [laughs]

   17. MHMorgan Housel22:14

       ... and they're like, "Go play soccer with our kid." And they're watching it, and the servants who are adults-

   18. TFTim Ferriss22:19

       [laughs] I, I have to imagine where this is going. [laughs]

   19. MHMorgan Housel22:22

       The servants are all just getting their ass kicked by this eight-year-old. They let every goal go through.

   20. TFTim Ferriss22:26

       [laughs]

   21. MHMorgan Housel22:26

       No one is gonna try to take the ball from him.

   22. TFTim Ferriss22:28

       I knew it.

   23. MHMorgan Housel22:29

       You know?

   24. TFTim Ferriss22:29

       Yeah. [laughs]

   25. MHMorgan Housel22:30

       And of course, the eight-year-old is like, "I'm so good. I'm so good at soccer." So as soon as people know who you are and what your last name it is, how much... They treat you differently. And that's not good. That is a terrible thing.

   26. TFTim Ferriss22:40

       Yeah. Laugh at all your dumb jokes.

   27. MHMorgan Housel22:42

       Exactly.

   28. TFTim Ferriss22:42

       Endorse all your dumb ideas. [laughs]

   29. MHMorgan Housel22:44

       I don't think I've ever talked about this before, but I've told my wife this. In my tenure at The Collaborative Fund, there was a period early on when I was doing deals and I was meeting with entrepreneurs, entrepreneurs who were trying to raise money from The Collaborative Fund, and it was astounding that when I was talking to an entrepreneur who wanted to raise money, every joke that I said was so funny.

   30. TFTim Ferriss23:03

       [laughs]
7. 28:22 – 30:54

   Should families avoid passing along dynastic wealth?

   1. MHMorgan Housel28:22

      'em down.

   2. TFTim Ferriss28:23

      I'm gonna hijack this for my own selfish purposes for a second. I find it very frustrating, I have found it very frustrating over the last, say, five to 10 years when speaking to very ultra high net worth people from a philanthropic standpoint. If I'm fundraising for something that is clearly high leverage, clearly capital efficient with good operators, but in the nonprofit space, how many demure or push back with some argument along the lines of, and they wouldn't word it this way, but compounding more into dynastic wealth, I'll do more good later. Often, the subtext of that is they want to give this dynastic wealth to their kids. They will not say that ex- explicitly, but there's a, there's a protecting of the nest egg, so to speak, in their response. And what I'm curious to hear from you, because you've spent a lot of time around very, very, very wealthy people, if you had a billion dollars of net worth... And how many kids do you have?

   3. MHMorgan Housel29:30

      Two.

   4. TFTim Ferriss29:30

      Two. All right. How much would you give to your kids versus, versus give away before you die versus something else? What would you do with that?

   5. MHMorgan Housel29:39

      Such a good question. And of course, we don't have a billion dollars, so this is all, it's, it's great that this is purely hypothetical.

   6. TFTim Ferriss29:43

      [laughs] I mean, it might be greater if you had a billion dollars. I don't know. [laughs] But yeah, it's hypothetical, so it's easy to talk about, yeah. [laughs]

   7. MHMorgan Housel29:50

      And this is, is what we plan to do now. Of course, our kids would get the best education. They would always have healthcare no matter what decisions they make in life. We'd probably, you know, pay for a, a great wedding and some great family vacations. If we were billionaires, we might say, "We'll buy you a house," and that's pretty much it.

   8. TFTim Ferriss30:07

      Mm-hmm.

   9. MHMorgan Housel30:07

      I think that's, that's pretty much it. I, I love the idea from the book Die With Zero, that if you're gonna give-

   10. TFTim Ferriss30:13

       I was just gonna mention it

   11. MHMorgan Housel30:13

       ... it's such a good book. It's a wonderful book everyone should read. And a lot of the premise is, uh, is if you're gonna give your kids money, don't wait until you die at age 97 to do it. Give your kids money when they need it in their 30s and 40s. And so my wife and I think our, our kids are four and seven, but I think about that now, and thankfully my, my kids won't listen to this episode, uh, for, for many more years, hopefully.

   12. TFTim Ferriss30:36

       [laughs] Part of my exploding seven-year-old demographic. [laughs] Start 'em young on the Tim Ferriss Show.

   13. MHMorgan Housel30:43

       Exactly. We don't plan to leave them much of any death inheritance.

   14. TFTim Ferriss30:48

       Mm.

   15. MHMorgan Housel30:48

       And to the extent that we're gonna give them a very small amount of money, we're probably gonna give it to them in their 30s and 40s when they need it the most.

8. 30:54 – 35:18

   Finding worthy charities and causes.

   1. TFTim Ferriss30:54

      So let's continue with this hypothetical thought exercise. Okay, so you don't give them an excess. Let's just say you add up all of those things, and while you're alive, you know, God willing, you give your kids, who knows, inflation adjusted, you have a billion dollars, just to keep it simple, right? Let's assume that's all reasonably liquid. Each of them gets two million bucks before you-

   2. MHMorgan Housel31:17

      Yeah

   3. TFTim Ferriss31:17

      ... kick the bucket. People have not figured out, you know, vampire transfusions with 20-year-olds from Lithuania or whatever all the tech billionaires are, are trying these days, [laughs] whatever the latest and greatest is. Hasn't really panned out, right? So you arc and then you come to a natural end. That still leaves a lot left over. Would you, again, as a thought exercise, would you donate most of that over the course of your lifespan? What would be the plan for the leftover $998 million?

   4. MHMorgan Housel31:47

      I'm really ashamed of this. This is not a good thing, but it's only been in the last two years that my wife and I have really thought about giving money away.

   5. TFTim Ferriss31:54

      Mm-hmm.

   6. MHMorgan Housel31:54

      And we just started doing it in a very modest amount. And for people who have done it, I think you'll agree with this, it's actually a lot harder than you'd think.

   7. TFTim Ferriss32:01

      Yeah.

   8. MHMorgan Housel32:01

      It's actually very, very difficult to give it away-

   9. TFTim Ferriss32:03

      Yeah

   10. MHMorgan Housel32:03

       ... in a way that you feel like is making a big difference and you feel great about and is going to the right causes. It, it should be easier than it is, and it's not. It's actually very difficult. I've always been most interested in micro philanthropy, what I'll call it. Like, rather than donate to a big charity, I wanna find, like, a single mother who's struggling and give money directly to her, that sort of thing.

   11. TFTim Ferriss32:21

       Mm-hmm.

   12. MHMorgan Housel32:21

       And that's actually, I think, the, the hardest form of charity to do. I'll tell you two examples-

   13. TFTim Ferriss32:26

       Yeah

   14. MHMorgan Housel32:26

       ... of this that, that I've had that were really profound for me.

   15. TFTim Ferriss32:29

       Mm.

   16. MHMorgan Housel32:29

       One was I was in New York City and I walked past, I think it was a, a CVS, and there was a mother and a child who looked like my son, and who were saying, "Can we please have some money for food?" And because the child looked like my son, it was like, I have to stop. So I, I went to the mother and I said, "Grab a shopping cart and fill it up and you can get anything you want." Which by the way, my mother did. I saw my mother do this to someone when I was a child, say-

   17. TFTim Ferriss32:51

       Mm

   18. MHMorgan Housel32:51

       ... "Grab a shopping cart and fill it up. No limits." So we did this. She went into CVS. I kinda followed them around and I said, "No, just fill the cart up." And when they were done with it, I paid and they just walked out. Not a thank you, not a look in the eye, nothing. Let me make clear, I was not doing this because I wanted the attention or because I wanted the thank you.

   19. TFTim Ferriss33:09

       Right.

   20. MHMorgan Housel33:09

       But I wanted an, some indication that I made a difference.

   21. TFTim Ferriss33:12

       Yeah.

   22. MHMorgan Housel33:12

       I wanted some information that it helped, and I didn't get it, and that's what made it really hard. And in my heart, I'm like, "I know this made a difference. I know that kid can eat."

   23. TFTim Ferriss33:20

       Mm.

   24. MHMorgan Housel33:20

       And then that, and that's why I did it. But in anything you do in life, you want feedback that what you're doing is working. And in a lot of these situations, you don't get it.

   25. TFTim Ferriss33:28

       Mm.

   26. MHMorgan Housel33:28

       And of course, people who are begging for food for their child probably don't have the emotional capacity to say thank... It's not what's going through their head. I completely understand it. But that's what makes it so difficult, and I've had that-

   27. TFTim Ferriss33:38

       Mm

   28. MHMorgan Housel33:38

       ... that similar situation happen many times to do it. So when I think about if giving away $200 is very difficult, how do you give away $998 million? Or if you're Bill Gates and Warren Buffett, how do you give away $200 billion? Very, very difficult to do. Extremely difficult to do.

   29. TFTim Ferriss33:56

       Yeah.

   30. MHMorgan Housel33:56

       I mean, I think the best analogy for this is really what the federal government is, is a giant charity program. Uh, with the exception of, like, defense and whatnot, that's kinda what it is. And it's not very well run. [laughs] Like-
9. 35:18 – 43:04

   Money and happiness.

   1. TFTim Ferriss35:18

      But let's zoom out because I want this to apply, obviously, to more people. Mentioned the Stoics a little bit earlier. Seneca the Younger, who's a very controversial figure for a lot of good reasons, but he's a hell of a quote machine. He's like the Arnold Schwarzenegger one-liner of the Stoics. [laughs] He said, "You know, people talk of having riches when often riches have them." Uh, much like a fever, right? And this is paraphrasing, but of course we're all paraphrasing. It's translated. [laughs] Uh, it wasn't published in English. But how would you suggest people think about money or income and happiness? This has come up on the podcast quite a lot, but this is something that comes up in human history even more often. What are some patterns or takeaways or lessons learned from your observation and study of these things?

   2. MHMorgan Housel36:07

      One thing that I think is, is really true, and it's coming out a lot more in the data, is that if you are already happy- Gaining more money will probably make you happier. But if you're already kinda depressed, gaining more money is probably not gonna help that much. There's a really interesting documentary about J. Paul Getty, who, uh, used to be-

   3. TFTim Ferriss36:25

      Mm

   4. MHMorgan Housel36:25

      ... the richest man in the world. And, and I think that the interview is taking place in the 1960s or 1970s in his castle in England, and it is a l- bona fide castle, like straight out of a fiction book.

   5. TFTim Ferriss36:35

      [laughs]

   6. MHMorgan Housel36:35

      And he's sitting there in this, like, 700-foot-long dining room surrounded by gold and diamonds. Like, the most ostentatious thing you can see. And the interviewer says, "Who are you envious of?" And the interviewer says, like, "Obviously everyone's envious of you. Who are you envious of?" And the guy, he's so morose, he's so glum, and he just kinda looks down and he says, "People who are happier than me."

   7. TFTim Ferriss36:56

      Mm.

   8. MHMorgan Housel36:56

      And it was like, that's the case. Money didn't, money didn't help him because he was already depressed. And in that situation-

   9. TFTim Ferriss37:01

      Mm

   10. MHMorgan Housel37:01

       ... it's, it's not gonna do much. But I think if you are the kinda person who already has a chipper disposition, you're already happy, then gaining more money will probably im- improve your life. That I think-

   11. TFTim Ferriss37:11

       Yeah

   12. MHMorgan Housel37:11

       ... is kind of an unfortunate, I don't know. It's just like, 'cause so many people who are depressed will think to themselves, "If only I had money, it would fix everything." And it, it's probably not the case. There's a really great quote in Will Smith's biography where he says when Will Smith was poor and depressed, he could say to himself, "If only I had more money, everything would be better." And then when he was rich and depressed, he, he didn't have that hope anymore. He li-

   13. TFTim Ferriss37:36

       Mm

   14. MHMorgan Housel37:36

       ... like, money actually subtracted the hope from his life because he reali- there was nothing else to strive for. And so I think that's the case. If you're already depressed, that's who you're gonna be when you're rich. And this is just highlighting something that a million people have said and everyone already knows, is that money just accentuates who you are. If you're a jerk, it's gonna make you more of a jerk. If you're happy-

   15. TFTim Ferriss37:54

       Yeah

   16. MHMorgan Housel37:54

       ... it's probably gonna make you happier.

   17. TFTim Ferriss37:55

       It's like power or alcohol or many drugs. It's an amplifier.

   18. MHMorgan Housel38:00

       Exactly. One other thing that's really interesting to me, the new biography of Elon Musk, Walter Isaacson is interviewing Musk's first wife, whose name is Justine, and she met Elon in college before he was any successful. He was just an immigrant from South Africa. He didn't have any money, no success. That's when she met him. And she talks about how much money and fame changed him. It just completely altered his personality. The other thing that I've always found interesting is that if you go back and look at an interview of Donald Trump in the early 1980s, there are several of them you can find on YouTube. When he was known but not famous, and he was probably wealthy but not rich, you would not recognize him. Utterly different person. Very calm, very measured, very reasonable. And even if you are a huge Trump fan, I think you would be stunned at who the person is on camera. So any of us, me, you, anyone, if we became into that level of fame and power and money, it would change us. And there, there's another quote from J. Paul Getty where he says, "Nobody would be the same if they could afford to be different." And I think that's a sad quote, but I think there's a lot of truth to that.

   19. TFTim Ferriss39:02

       Can you say that again?

   20. MHMorgan Housel39:03

       He says, "Nobody would be the same if they could afford to be different."

   21. TFTim Ferriss39:08

       Hmm. What do you think he meant by that?

   22. MHMorgan Housel39:11

       I think he was probably mentioning in the sense of does money make you happier? Does money change who you are?

   23. TFTim Ferriss39:18

       Mm-hmm.

   24. MHMorgan Housel39:18

       And I think all of us want to imagine that if you and I stumbled across a billion dollars tomorrow, we would be the same people. We would have the same friends, the same interests, the same hobbies, the same disposition, the same personality. And I think there's enough examples of this where the answer is we would not.

   25. TFTim Ferriss39:36

       Yeah.

   26. MHMorgan Housel39:37

       There are probably some exceptions that we could think of, but I think every single person who comes into that kind of money is a different person, becomes a different person.

   27. TFTim Ferriss39:45

       I wonder if they become a different person or if it's similar to the quote, I wish I could recall the attribution, but, "Adversity doesn't build character, it reveals it." I wonder if it's-

   28. MHMorgan Housel39:55

       Yeah

   29. TFTim Ferriss39:55

       ... it's kind of like watching someone with money interact with a waiter or a waitress who's having a tough first day or a busy section. When people don't need to be nice anymore, how do they behave?

   30. MHMorgan Housel40:09

       Yes. I think that's exactly it.
10. 43:04 – 49:28

    Avalanches and other random, life-changing flukes.

    1. MHMorgan Housel43:04

       does.

    2. TFTim Ferriss43:05

       So let's take a hard left from what we're talking about. Let's talk about avalanches. I'll let you take the baton and go from there. Avalanches scare the living hell out of me. I do have a decent amount. I'm no b- no expert skier to the extent that you used to compete and so on, but I have done in the last handful of years quite a lot of sidecountry and backcountry skiing, and this just scares the wits out of me.

    3. MHMorgan Housel43:33

       Yeah.

    4. TFTim Ferriss43:34

       Does not get less scary with each passing year. So tell me about your, [laughs] your experience with avalanches.

    5. MHMorgan Housel43:42

       I grew up as a competitive ski racer in, in Lake Tahoe, and, you know, most of those big years were when I was a, a teenager, 16, 17, 18. And m- my friends and I, there were about a dozen of us on the Squaw Valley ski team, and we spent, we, we skied six days a week, 10 months a year. We're always, we skied all over the world, always traveling around. And one day, this is February of 2001, I was 17 years old at the time, and Lake Tahoe, where we lived, had just been dumped on, just got an absolute monster blanket of snow dumped on. And the layering of snow was very important to the story. So at one point, Squaw got about two feet of very light, fluffy snow, and then after that, it got about two feet of very wet, heavy snow on top of that, which we didn't think about this at the time, but that creates a textbook perfect avalanche condition. Because you have heavy snow on top of light snow, it slides very easily. So one day in February 2001, myself and two of my friends, Brendan Allen and Brian Richmond, were skiing, and we would ski out of bounds at Squaw Valley. We would duck under the ropes that say, "Do not cross," to ski the untouched, untracked parts of the mountain that are so much fun to do. And when we, when you do that, there's no chair lift at the bottom. We would ski to the bottom and then hitchhike back once we got spit out on a backcountry road. Th- the three of us did this run on the backside of Squaw. We had done it maybe a half dozen times before. Not that often, because it's such a pain in the ass to hitchhike. But we skied down, like it was, it was so great. It was so awesome. And halfway down, we triggered a small avalanche, and it was pretty small. It, like, came up to our knees, and it's, it's the most bizarre feeling because you very suddenly have no control at all. Because rather than pushing on the snow to gain traction, the snow's pushing you. So all of a sudden, you go from skiing to, "I'm on a rollercoaster," is how it feels. But it ended pretty quickly, and we got to the bottom, and I, I remember saying to Brendan, I remember saying like, "Holy shit, did you see that avalanche? It was so..." We laughed about it and we hitchhiked back and, like, didn't say another word about it. We get back down to Squaw, and Brendan and Brian say, "Hey, let's do it again." And I, I have no idea why, but I said, "Ah, I'm, I, I, I don't wanna do it again." I think hitchhiking kinda freaked me out. But Brendan and Brian said, "Okay, we're gonna do it again." And I said, "Hey, rather than hitchhiking, I'll drive my car around and pick you guys up so you don't have to hitchhike." So we went our separate ways. Brendan and Brian went and did the run again. I, I went down, took my boots off, drove around to pick them up. And when I got to the spot we were gonna pick them up, they were not there. And I, I didn't think that much about it. I thought maybe they had already hitchhiked back. I think I was late, so I was like, "Oh, they like..." Uh, I, I felt bad that I was late picking them up and they had already left. And I drove back to our locker room, and they weren't there either, and no one, no one had seen them. And this was before cell phones, but, like, prior to cell phones, people were very comfortable being out of touch, unlike they are today. If you didn't know where someone was, it was like, "Eh, well, whatever. They're somewhere else." So I didn't think anything of it. And later that day, Brian's mom called me and she said, "Hey, Brian didn't show up for work today." And she'd also just spoken to Brendan's dad, and Brendan missed a dentist appointment that afternoon. And she said, "Do you know, do you know where they are?" And I said, "Yeah, we skied the backside of Squaw," which we was, was, we were not supposed to do. It was out of bounds. "And I was gonna pick them up, but they never showed up, and no one's seen them since." And Brian's mom, who was an expert skier, said, "Oh, my God," and she clicked the phone. She hung up. And I think in that moment, both, both of us figured out what happened. Without saying it, both of us knew what happened. And the day went on. We, we called the police. We got a missing persons report. The police didn't take it seriously at all, but eventually that evening, we, we got search and rescue involved, and they went out. It was still a blizzard. They had a team of search dogs and these giant floodlights to search for them. And the next morning, about 9:00 AM the next morning, the search dogs had honed in on a spot in the avalanche field, and rescuers with these giant probe poles to probe the snow found Brendan and Brian buried about six feet down from a massive avalanche. They, the rescuers had just said it looked like half the mountain had been torn away, and they were, they were dead, of course. And so that, you know, I was 17. That had, like, a huge, profound impact on my life. This is not that unique of a story. Everyone has lost somebody close to them. Everyone's had a near-death experience themselves, but this was my version of that. And it shredded me, completely tore me to pieces. And it wasn't until years later that I had pieced together a, a couple of takeaways from this that impacted my life personally. One was my decision to not go on the second run with them was completely thoughtless and brainless. I didn't weigh the pros and cons. I didn't say, "Oh, no, it's too dangerous." I didn't say... I didn't think anything of it. I think I was probably just tired, and I said, "You guys go do another run, and I won't." If I had went with them, I would've, 100% chance I would've died So the most important decision that I ever made in my life, it was not where to go to college, it was not whom to marry. The most important decision I ever made on my life was to not go on the second run with them, and I put no thought into it. It was a complete random fluke. And so, like, one of the takeaways there for me was just, like, how fragile life is. There's this great quote from Tim Urban, who I think has probably been on your show before, where he says-

    6. TFTim Ferriss48:43

       Mm-hmm

    7. MHMorgan Housel48:43

       ... if you had a time machine and you can go back in time, you would be terrified because you would realize that the tiniest little no-nothing decision that you make can flourish into, completely change your life in good ways and bad. Like most people, how they met their spouse was a complete random fluke that ended up [chuckles] really important to them. And so you realize just how incredibly fragile life is and how there might be a decision that you make today, that I make today, that we think nothing about, the n- random decision that goes on to change everything. So that, that story, that experience had a profound impact on me, on thinking about risk, thinking about the tail end consequences of, like, of risk, thinking about how fragile the world is. It just, it went on to impact virtually everything in my life from that one day.

11. 49:28 – 56:11

    We can prepare for the future, but we can't predict it.

    1. TFTim Ferriss49:28

       Well, number one, I mean, I'm s- I'm so sorry, obviously, for the loss of your friends. And the, the story, for all the reasons you described, is terrifying, not just from the avalanche perspective, but from the angle of looking at how small decisions can [chuckles] have huge impacts, and also how, I think as we discussed in the last conversation, you know, r- risk is what's left when you've thought of everything else. Now, in this particular case, I suppose if you'd really taken a moment to sit down with the pro and cons, you probably would've figured out that it was a bad idea. But in the moment, you could've very easily made the wrong decision. I suppose part of what I'm wondering, because you've become very good at interrogating the world and your own thoughts with questions, right? In that, in that particular moment, you made a snap judgment. It's not really a snap judgment. You made a snap decision that saved your life. But you have questions that you seem to explore or revisit with some regularity. Some of them we discussed in the last interview, but I'm gonna, I'm just gonna read a few. So what are we ignoring today that will seem shockingly obvious in a year? Which of our current views would change if our incentives were different? And it goes on and on. I mean, there, there are many others. I mean, there's one that I had not heard before, which is, what hassle are you trying to eliminate that's actually an unavoidable cost of success? That's pretty interesting to me.

    2. MHMorgan Housel50:51

       Yeah.

    3. TFTim Ferriss50:52

       Who has the right answers but we ignore because they're not articulate? What looks unsustainable that is actually a new trend we haven't accepted yet? So my, my macro question about these questions is how you arrived at these questions, whether it's coming up with them or borrowing them or adapting them, and which of these might be worth exploring as, uh, our next chapter in this conversation.

    4. MHMorgan Housel51:19

       I think maybe the core of a lot of these questions is that everybody, including myself, thinks that their experience in life is roughly how the world works, without realizing that their experience in life is so very unique to their life. And so you and I are white American males, and I think it's common-

    5. TFTim Ferriss51:37

       Mm-hmm

    6. MHMorgan Housel51:37

       ... for us naturally to think that the experiences that you and I have had and how people treat us is how everyone else is treated. Of course, that's not true.

    7. TFTim Ferriss51:45

       Yeah.

    8. MHMorgan Housel51:45

       And so I think when you accept that the world that I've experienced is so different from the world that you've experienced and other people, then I think you just start asking these questions about, like, what else is out there that I haven't seen, that I'm oblivious to? And the fact is that I and you and everyone is oblivious to 99.99% of the world, completely oblivious to how it works, 'cause we're centered on, on what we've experienced. So that's where a lot of it comes. I think a lot of it, too, and this is an unhealthy mindset, but I spend 99% of my life thinking about the past and contemplating the future, the worst thing that you can do. Like, virtually never present. So I, I think I'm constantly interrogating the past of, like, what could it have been? Why did that happen? What would my life have been like if that happened? My parents were visiting us, uh, just last week, and my mother was and is at a very high risk of breast cancer. By age 42, she was the oldest surviving female in her family.

    9. TFTim Ferriss52:35

       Wow.

    10. MHMorgan Housel52:35

        Her sister, her mother, her grandmother, everyone had died of breast cancer. And, and my mother is now 70, and she's healthy. Fingers crossed, knock on wood. But we were talking the other day about when we were growing up, and myself and my siblings were children, that my father and mother would, would cry. If, if my mother had a lump that needed to get checked out, they would hold each other and cry, "This is gonna be the one." And it's so bonkers for me to contemplate if my childhood had, had ended up differently. And it so easily could. Not only could it have, it probably should have. Like statistically, she should have died of breast cancer 30 years ago. And the fact that it didn't... So I, I actually spent, this is probably unhealthy, but I spend a lot of my time contemplating what would life have been like if my mother died when I was 10 years old. I, I actually, th- I'll take that back. I think that is a, a pretty healthy thing to think about, to imagine a life that's different than it could've have been, 'cause I think it prepares you for a more variant future than you're expecting. But, and the truth is that nothing would've been the same. I would've gone to different schools. I would've had different friends. I would've had a different mindset. I would've had a different career if that had happened. And you can say that for a billion different things in life, and then you realize that the path that got you to where you are today was completely unforeseeable and completely random and, in many ways, outside of your control. Everyone, I think particularly successful people, want to think that their success was entirely, if not overwhelmingly, due to the decisions that they made, and I think in virtually any condition, in any example, that's not the case.

    11. TFTim Ferriss54:01

        It's also a very fragile framework, right? Because you're then either excellent or terrible depending on the outcome, and you're not, in both cases, you're not factoring all of the chance involved, right? So it, it seems to be a fragile mindset in a sense. It's a vulnerable mindset.

    12. MHMorgan Housel54:21

        There's a German philosopher whose name I'm, I'm, I'm forgetting, but he has this idea that- And this is probably a pretty common idea, I don't know if he came up with this, but he just, uh, talked about it, that there are an infinite number of possible worlds, an infinite number of ways the world could have turned out, and we just happen to live in this one. There are just an infinite number of alternative histories that could have gone another way. During the Revolutionary War in the United States, it was the Battle of Long Island, and George Washington and his troops were very close to being wiped out by the British. They basically had them cornered just outside of Brooklyn, and all they had to do was sail up the East River and it would've all been over, and that was their plan. And George Washington's troops were starving and hungry, and they were, they were whipped. And the night that the British were planning to sail up the river and corner him, the winds changed direction and turned the other way, and they could not sail up the East River.

    13. TFTim Ferriss55:06

        [laughs]

    14. MHMorgan Housel55:07

        And that gave George Washington and his troops just enough time to get away. David McCullough, who is one of the w- was one of the world's foremost authorities on this topic, was interviewed by Charlie Rose, and Charlie Rose said, "If the winds were blowing the other direction that night, would there have been any United States?" And David McCullough said, "Absolutely not."

    15. TFTim Ferriss55:25

        Hmm.

    16. MHMorgan Housel55:25

        The entire reason this exists is because the winds in Brooklyn changed directions last night. When you hear enough stories like that, you realize it's just like a- literally nothing is certain about the future. It could all go in any different direction for the tiniest little reason. Not a big reason, but for me it was, it was not going on a second run. And I, I, I thought about it, uh, afterwards. I had probably been on something like 3,000 runs with Brendan and Brian over the course of my life.

    17. TFTim Ferriss55:50

        Hmm.

    18. MHMorgan Housel55:50

        Probably something in that neighborhood. And how many times did I say, "Hey, you guys do another, I'm gonna skip"? Probably never. I think it was probably the first time I had done something like that. And so when you, when you hear a story about the winds changing direction, or for me, y- it, it just makes you so incapable of having any kind of confidence that we know what the future's gonna bring for any of us.

    19. TFTim Ferriss56:10

        Hmm.

12. 56:11 – 58:38

    What current unknowns will seem shockingly obvious in a year?

    1. TFTim Ferriss56:12

       Let's maybe shift to the meta level one more time and, and I'll make it more specific, uh, in terms of the question about the questions, and then I wanna, uh, segue to, not in a rush, but asking about perhaps things that are more inside of our control in terms of coming back to the Serenity Prayer, which, which you so kindly invented in 2020. Although I guess the be here now, you did, you did not. [laughs] That was, that was from the canon, in terms of the past and the future in any case. Um, so these-

    2. MHMorgan Housel56:43

       Still working on that one.

    3. TFTim Ferriss56:44

       Yeah. So these questions like, what are we ignoring today that will seem shockingly obvious in a year, were these questions that you generated or used mostly in thinking about investing? Are these prompts that you came up with for writing or something else? Where did these questions come from?

    4. MHMorgan Housel57:05

       Let me start with that specific question about what's gonna be shockingly obvious in a year. I remember, I forget who it was, but it was during the dark days of COVID, March or April 2020, and somebody tweeted, I, I forget who it was, but they said, "In one year, we're either gonna be in the second Great Depression, and it's gonna be so obvious that that was where we were heading, or we're gonna be in a giant boom, and it's gonna be so obvious that that's where we were heading."

    5. TFTim Ferriss57:27

       [laughs]

    6. MHMorgan Housel57:27

       Either of those outcomes would be so obvious. And the truth is, one year later, by most measures, we were in a giant boom, stock market boom, econ... Like, things were exploding in 2021, the meme stock bubble. And for a lot of people, it was so obvious. The Fed printed all this money. We did $6 trillion. Who... Anyone could have seen this coming. But the truth is that if we were in the second Great Depression, it would've been just as obvious. Most of these questions that I posed in the end of the chapter there are questions that I think are impossible to answer.

    7. TFTim Ferriss57:54

       Hmm.

    8. MHMorgan Housel57:54

       So what is gonna be shockingly obvious today, one year from now in 2024? I think it's impossible to answer, but it's gonna be shockingly obvious.

    9. TFTim Ferriss58:02

       Right.

    10. MHMorgan Housel58:02

        And, and, and maybe the answer will be who is gonna win or who's gonna lose the presidency, and when it's gonna happen, it's gonna be so obvious. A lot of people did this with Trump in 2016. When he won, they said, "Yeah, I, I saw this coming." I, I, maybe.

    11. TFTim Ferriss58:15

        Yeah.

    12. MHMorgan Housel58:15

        Or if, if he had lost huge, that would've been obvious, too. So most of these questions I just kinda have in my kind of semi-depressive walks around the neighborhood sometimes when I'm walking my dog contemplating-

    13. TFTim Ferriss58:26

        [laughs]

    14. MHMorgan Housel58:26

        ... what, what the past could've been or what the future's gonna hold for me.

    15. TFTim Ferriss58:29

        Yeah.

    16. MHMorgan Housel58:29

        But I actually kind of enjoy doing these things. I think it's fun to contemplate a world that is so outside of your little comfort bubble of what you've experienced.

    17. TFTim Ferriss58:37

        Hmm.

13. 58:38 – 1:01:46

    Which of our current views would change if our incentives were different?

    1. TFTim Ferriss58:38

       So let me touch on another one of the questions, which is, which of our current views would change if our incentives were different? And I wanna tie it to another line that I have in front of me that I want you to elaborate on. And maybe these pair well, maybe they don't, but they seem like they could, and it is, "The most valuable personal finance asset is not needing to impress anyone."

    2. MHMorgan Housel59:01

       I'll tell you what is so stark to me about, about the topic of incentives, about-

    3. TFTim Ferriss59:06

       Hmm

    4. MHMorgan Housel59:06

       ... how would I be down-- uh, different if my incentives were different. One of the passages that I've read that s- stuck out to me the most and stopped me dead in my tracks was from this book on World War II, as we were just saying. It's a book called "What We Knew," and it's a book that interviews German civilians who were around during Nazi Germany, and the book just asks, "What did you see? What did you know during this period? Did you know about the Holocaust?" Like j- just in a very non-judgmental way, 'cause they're all civilians, just tell me what you saw. And there's a German civilian who, who mentions that when Hitler came to power, virtually every German supported him. And the interviewer says like, "Why? What, what was so appealing?" And the, the civilian says, "We have to understand, in 1920s and the early 1930s, the German economy was an utter catastrophe. Way worse than the Great Depression that we had in the United States. They had hyperinflation, everything fell to pieces." And Hitl-- I'm simplifying this, but Hitler came to power and said, "I have a better way. I'm gonna give you all jobs. I'm gonna make you all wealthy again. We're gonna restore German pride and power." And in that situation, when everyone was literally starving and had nothing, this civilian said, "If someone comes along and promises you a better way, you accept it and you say, 'Yes, I'll go with you.'" And they said everyone was so willing to overlook the obvious downsides of Hitler because he gave them the incentive to be like, "Hey, do you want a job? Do you want prosperity? I'm the way." And they said, "Sign me up. I'll do it." There's another example of a documentary in Mexico where El Chapo was pr- Of course, one of the most ruthless, murderous, you know, drug lords of all time. But he's actually very well supported by a lot of local communities in Mexico. And they at... This interviewer had asked these people, "Why? Why do you support this murderous dictator?" And they said, "We gotta understand. We have nothing. We have no money." And Chapo comes to town and he says, "I'll build you homes. I'll g- I'll give you healthcare. I'll give you food. I'll give you jobs." Takes care of all of them. And their incentive, the civilians' incentive, is to say, "This guy's great. Love this guy."

    5. TFTim Ferriss1:01:00

       Mm.

    6. MHMorgan Housel1:01:00

       So I think a lot of society, when you look at why was Hitler supported, why is Chapo supported, can at least in part be explained what, by those people have incentives that you and I don't. And what is scary, but and undoubtedly true, is contemplating whether you or I, if we lived in Germany in the 1930s or if we lived in Mexico in the last 20 years, would've supported those people.

    7. TFTim Ferriss1:01:23

       Of course we would've. [laughs]

    8. MHMorgan Housel1:01:24

       I, yes, I think you are fooling yourself if you say, "No, I would not have."

    9. TFTim Ferriss1:01:28

       Yeah.

    10. MHMorgan Housel1:01:28

        And so I think it, I think if you have a cynical view of everyone who lived in Germany was a monster, of course a lot of them were, but if you see they all were monsters. Everyone who supports El Chapo is a monster. I think if your conclusion is that all of them, you are misunderstanding the power of incentives and how you would be different yourself.

14. 1:01:46 – 1:04:26

    The most valuable personal finance asset.

    1. TFTim Ferriss1:01:46

       Yeah, I agree. So let's use that as a segue to maybe the unrelated, maybe the related. The most valuable personal finance asset is not needing to impress anyone. Is that something you can cultivate, or is that also a preset out of the box?

    2. MHMorgan Housel1:02:03

       I think there are definitely people who are more insecure than others, and I think where a lot of this comes from is that everybody wants respect and admiration from people around them, particularly the people who they want to admire them, their friends, their spouses, their coworkers. And there's a couple different ways to cultivate that. If you can cultivate respect and admiration through wisdom and intelligence and humor and love and empathy, then you can, then you can get all of it from that. If you don't have any of those traits, most people will resort to trying to gain admiration with horsepower and square footage, and they'll just try to show off to other people. "I can't gain your respect with humor and wisdom, but look at my car. It's really cool, isn't it?" That's a lot of where it comes from. And we were talking about comedians before. Louis CK, I, I'm fine saying this because I think he would admit to it, he's, he looks like a fat slob. Nobody cares because he's so funny.

    3. TFTim Ferriss1:02:54

       [laughs]

    4. MHMorgan Housel1:02:54

       He doesn't need to show off his six-pack. He doesn't... I- i- if he drove a s- a Honda Civic, nobody would care.

    5. TFTim Ferriss1:03:00

       Yeah.

    6. MHMorgan Housel1:03:00

       They admire him because he's funny. And I think that's, there's a lot of, like, insight in that, that everybody just wants respect and admiration. I know there was, like, a picture of Justin Bieber the other day, and he's wearing, like, a dirty wife beater and, like, ripped sweatpants. Doesn't matter. He's Justin Bieber. He can do it. T- Does not matter.

    7. TFTim Ferriss1:03:17

       Yeah.

    8. MHMorgan Housel1:03:17

       If you gain your respect and admiration from other ways, you don't need to show it off. And so I think that's a big part of this. And for, uh, the huge majority of people, the biggest financial liability that they have, it's not student loans, it's not a mortgage, it's their desire and their need to impress other people. I think the, the way that you can cultivate this is realizing that those people are, A, by and large not paying attention to you. They're worried about themselves. The people who, like, who you think are looking at your car are not. They're thinking about their own car. That's a big part of this. Or the other part of it is, you know, there's probably seven people in my life who I want to love me, my parents, my wife, my kids, one or two friends, that I would say I, I really desperately want them to love me. It's really important that they love me. And that's it. The other [laughs] , the, the other 7.99999 billion people on the planet, maybe I, I, I would like you to like me, but that's, that's about it. So once you realize that, then it's like, I want seven people to really respect and admire me, and I'm gonna put all my effort into that, and everyone else, I, I really, I really don't have much care about. I think once you accept-

    9. TFTim Ferriss1:04:22

       Mm

    10. MHMorgan Housel1:04:22

        ... that, it's a huge relief off your shoulders.

15. 1:04:26 – 1:07:20

    Optimizing the chance of marrying the right person.

    1. TFTim Ferriss1:04:26

       So you mentioned earlier the most important decision of your life being that snap decision to not take the extra run. Very quickly, either just before or just after you mentioned that, you talked about marriage or who you marry. So how would you suggest people think about that, if there is a way to think about it, uh, or is it just a crapshoot, right? It's just like, hey, look, you're in the casino, and you, either you're gonna roll lucky sevens or you're not, but best of luck to you. Is there a structured way to think about this or a particular way, a mode of thinking about this that, that you could... Any, any suggestions? Asking for a friend. [laughs]

    2. MHMorgan Housel1:05:14

       Gun to my head, Tim, it's, it's the latter. I think, I think a lot of it is, think there's a, a tremendous amount of luck that's involved in it. A lot of that is because most people wanna get married during a pretty narrow window of their life. From probably age 25 to 35 is when most people want to get married. So during that window, you're really just like, "Who am I meeting?" And you meet, particularly as you get older, a lot of people are like, "I really wanna get married. I just met this guy or this girl. Like, okay, that's, that's what I got. We're, we're gonna marry. That's, that's what's in front of me. That's what we're gonna do." I do think there is a sense though that a lot of people, particularly when they're young, particularly in their early to mid-20s, are obviously maximizing for the wrong variables. Guys are maximizing for beauty, and women will tend to maximize for money and prestige.

    3. TFTim Ferriss1:05:55

       Mm.

    4. MHMorgan Housel1:05:55

       That's a very generalized statement that is not black and white, so if you're offended by that, I'm not talking about you. But obviously, what's gonna work in the long run is just, like, are you best friends with this person? That's it. That's it.

    5. TFTim Ferriss1:06:04

       Mm-hmm.

    6. MHMorgan Housel1:06:05

       I think there's analogy to investing here, where a lot of investors wanna maximize for the variable how do I earn the highest returns this year. And in many ways, that is like maximizing for beauty. It's, like, super fun. It's super exciting right now. I'm gonna get a lot of dopamine right now, which is what you'll get from an attractive spouse, and it's what you'll get from, like, owning a meme stock in 2021.

    7. TFTim Ferriss1:06:25

       [laughs]

    8. MHMorgan Housel1:06:26

       But what actually works in the long term is, like, is owning a boring index fund for 50 years. And what's actually gonna work in marriage ... is marrying your best friend, even if they're not the most attractive or richest person that was in your social circle. I think that's, that's, like, really clear as day. Now, there are some people who will marry their best friend who is also very wealthy and, and very attractive. Like, uh, of course, like, it works out.

    9. TFTim Ferriss1:06:46

       [laughs]

    10. MHMorgan Housel1:06:46

        But I, I think a lot of it is just people maximizing for the wrong variables in there. When I look at my own marriage, my wife and I met when she was 19 and I was 21, so we were very young. We were in college.

    11. TFTim Ferriss1:06:57

        Mm-hmm.

    12. MHMorgan Housel1:06:57

        And we've, you know, we've been together for 17 or 18 years now. And when I look back at it, I think it was, it was overwhelmingly luck. And I think the biggest element of luck in there is that we grew together. And hey, by the way, I'm gonna say we've grown together so far. Fingers crossed that we continue to do so, but if you understand [laughs] what happens to most relationships, it's much more difficult than you would think.

    13. TFTim Ferriss1:07:19

        Mm-hmm.

    14. MHMorgan Housel1:07:19

        But I attribute that

16. 1:07:20 – 1:10:40

    Mending divergence in a marriage or relationship.

    1. MHMorgan Housel1:07:20

       a lot to luck. And there were periods in our relationship when I started to go one way and she started to go another, and w- and we came back. But you can see it-

    2. TFTim Ferriss1:07:28

       How did you do that? Could you give maybe... You don't have to give a concrete example if it's not comfortable, but this is a relationship breaker. That divergence breaks a lot of relationships, or it just-

    3. MHMorgan Housel1:07:39

       Yeah

    4. TFTim Ferriss1:07:39

       ... causes an incredible amount of strife, and it's not clear that the lines come back to converge, right? I've seen-

    5. MHMorgan Housel1:07:44

       Yes

    6. TFTim Ferriss1:07:45

       ... many seemingly great relationships self-immolate because of this divergence that does not converge in time to save the relationship. So what did you guys do to rein it back in, or what happened there?

    7. MHMorgan Housel1:08:00

       The best definition I've heard about love is you love someone if you respect them for their faults as much as you do their good traits.

    8. TFTim Ferriss1:08:07

       What does that mean, though? I mean, it sounds good. I'm gonna push back a little hard, 'cause I'm not like, "Yeah-

    9. MHMorgan Housel1:08:11

       Yeah

    10. TFTim Ferriss1:08:11

        ... this person's always late. I really respect that they're always fucking late when they show up to dinner." [laughs]

    11. MHMorgan Housel1:08:16

        No, I, I, I totally understand what you mean, and I think maybe respect is the wrong word.

    12. TFTim Ferriss1:08:19

        Yeah.

    13. MHMorgan Housel1:08:19

        But it's more acceptance.

    14. TFTim Ferriss1:08:21

        I see.

    15. MHMorgan Housel1:08:21

        If my wife does something that irritates me, and of course that's happened, and vice versa-

    16. TFTim Ferriss1:08:25

        [laughs]

    17. MHMorgan Housel1:08:26

        ... more so vice versa, I have to go out of my way, but I try to m- go out of my way to say, "I know she means well. I know she's doing the best she can," even if it really bothered me. And I think if, if you, if you can hold onto that, it's easier not to look over things, but to compromise on things.

    18. TFTim Ferriss1:08:43

        Mm-hmm.

    19. MHMorgan Housel1:08:44

        Everyone knows the friendship with your best buddy, not your spouse or your mate, but your best buddy, that all it takes is for one person to pick up the phone and give you a call. And if you can do that, you can keep a friendship going for 20 years, 30 years. And I think if one person in the relationship really wants this to work, you can really make it work. I, I, I have a close friend who their relationship is not that healthy, and they have said that at any given time, one of them wants to leave, but there's never been a time when both of them want to leave, and that's why they've stuck together.

    20. TFTim Ferriss1:09:15

        Hmm.

    21. MHMorgan Housel1:09:15

        And so I think if there's one person in the relationship that is willing to compromise and make it work, there's a good chance that it's gonna work over time.

    22. TFTim Ferriss1:09:21

        Hmm.

    23. MHMorgan Housel1:09:21

        I pretty much have... I, I don't think I've ever, I've ever said this, I really have three major life goals. I wanna stay married, I don't wanna get fat, and I wanna be there for my kids.

    24. TFTim Ferriss1:09:31

        Is that in weighted order, one to three? [laughs]

    25. MHMorgan Housel1:09:34

        Probably not.

    26. TFTim Ferriss1:09:34

        Okay.

    27. MHMorgan Housel1:09:34

        Probably not.

    28. TFTim Ferriss1:09:35

        [laughs] No, I'm just kidding.

    29. MHMorgan Housel1:09:36

        But I think that's, like, respect for my relationships, respect for my body, and respect for my family is one other way that you can put that.

    30. TFTim Ferriss1:09:42

        Mm-hmm.
17. 1:10:40 – 1:30:19

    Trying to eliminate a hassle that's an unavoidable cost of success.

    1. TFTim Ferriss1:10:41

       So let me ask you a question that I brought up a little bit earlier. I'm just... I've never heard it posed or read it posed, and so I'm curious to know how you might answer this if you had a gun against the head, 'cause I'm not saying this is intended to immediately produce answers. But if you had to answer it or answer it for other people, what hassle are you trying to eliminate that's actually an unavoidable cost of success? And the reason that I want to return to this is that, and this ties into the question of money, happiness, contentment, et cetera, is that many people who achieve what would be considered by most financial success are people who have been rewarded for solving problems over long periods of time, and they probably identify as being a good problem solver. And they are therefore conditioned, their behaviors are shaped to look for problems to solve, and that does not always foster a sense of wellbeing. [laughs]

    2. MHMorgan Housel1:11:45

       Yeah.

    3. TFTim Ferriss1:11:45

       If that makes sense.

    4. MHMorgan Housel1:11:47

       Yeah.

    5. TFTim Ferriss1:11:47

       So yeah, what hassle are you trying to eliminate that's actually an unavoidable cost of success? How would, how would you answer this, or how have you answered it, or how have you seen other people come up with answers?

    6. MHMorgan Housel1:11:57

       Well, I'll give you a technical answer and then maybe a, a, a more personal answer.

    7. TFTim Ferriss1:12:01

       All right.

    8. MHMorgan Housel1:12:01

       I think when I wrote that question, I was probably thinking of stock market volatility.

    9. TFTim Ferriss1:12:05

       Mm-hmm.

    10. MHMorgan Housel1:12:05

        Very technical, probably not where you thought I was going.

    11. TFTim Ferriss1:12:07

        Right.

    12. MHMorgan Housel1:12:07

        A lot of investors try to eliminate volatility, and they say they view it as a burden and something that you should get rid of, when actually it's like, no, that's the cost of success.

    13. TFTim Ferriss1:12:15

        Right. It's the fee and not the penalty, right?

    14. MHMorgan Housel1:12:17

        It's the fee and not the penalty. That's probably what I was thinking. One thing that comes to mind is a blog post that you wrote many years ago, I think, about the cost of fame.

    15. TFTim Ferriss1:12:26

        Hmm. Yeah, 11 reasons why not to become famous. Mm-hmm.

    16. MHMorgan Housel1:12:30

        And you were very open and forthcoming about what it's done to your own life.

    17. TFTim Ferriss1:12:34

        Mm.

    18. MHMorgan Housel1:12:34

        And anyone who reads that will read that and say Some version of I, I don't envy what Tim's going through.

    19. TFTim Ferriss1:12:42

        Mm-hmm.

    20. MHMorgan Housel1:12:42

        And the irony of coming to that conclusion after millions of people will look at the books that you've sold, and the money that you've made, and the downloads of your podcast would say, "I wanna be like Tim." And then you read that and it's like, eh, I, I don't know.

    21. TFTim Ferriss1:12:54

        Yeah.

    22. MHMorgan Housel1:12:54

        Maybe, but I don't know. It's not at all clear anymore. Among the top 10 richest people in the world, there are, I think, 14 cumulative divorces.

    23. TFTim Ferriss1:13:02

        [laughs]

    24. MHMorgan Housel1:13:03

        Which is, is, is obviously like a massive outlier within there.

    25. TFTim Ferriss1:13:06

        [laughs]

    26. MHMorgan Housel1:13:07

        And I think, I think the reason why that is is because to become w- uh, very successful, you need to devote every waking hour to your career. And so your spouse, your children, your friends, like, bye. Like, sorry, don't, don't have any time for you. If you read the biography The Snowball, which I, I reread recently, it's a biography of Warren Buffett.

    27. TFTim Ferriss1:13:24

        Mm-hmm.

    28. MHMorgan Housel1:13:25

        As someone who's been such a Buffett fanboy my entire life, and a lot of people will fall into that category, you read his biography and at the end you're like, "To tell you the truth, not the life that I want."

    29. TFTim Ferriss1:13:35

        Yeah.

    30. MHMorgan Housel1:13:35

        He has devoted every waking hour since he's been 11 years old to picking stocks. That's not an exaggeration. And it came at the expense of his personal life, his marriage, his children. There was an interview with Elon Musk several years ago where they're talking about how hard he works, and he breaks down in tears. And he says, "All of this has come at the expense of coming with, of spending time with my children." And it's like I, I, I don't want that. I, I... There's never, there's not any version of life in which I would be on my deathbed and say, "That was worth it. I made a ton of money, but who are these children that I had? I don't even know them."
18. 1:30:19 – 1:34:56

    Guessing at the future of text vs. audio/video.

    1. TFTim Ferriss1:30:20

       where do you think text goes from here? Because I, I think that all that is old becomes new once again. You look at Substack, you look at any number of these things, like yeah, text has been sort of the red-headed stepchild. Wasn't sexy, but you look at the success of, say, a Matt Levine. Incredible.

    2. MHMorgan Housel1:30:41

       Yeah.

    3. TFTim Ferriss1:30:41

       Right? You look... It still works, and text still travels even though the platforms, if we look at those social media platforms as necessary, which I think is a question mark actually. Text is not gonna necessarily be as heavily rewarded as the things that they're prioritizing to meet their own quarterly goals and so on. But where do you think text goes in the next handful of years?

    4. MHMorgan Housel1:31:04

       Here's what's so shocking to me in, in my experience. The audiobook version of Psychology of Money outsells the physical book, the text book, by two to one. Never in a million years would I have thought that, because I'm a book reader. I read physical books.

    5. TFTim Ferriss1:31:17

       Especially for that kind of book.

    6. MHMorgan Housel1:31:19

       I know. It's bonkers. But talking to other authors, it's similar.

    7. TFTim Ferriss1:31:23

       Yeah.

    8. MHMorgan Housel1:31:23

       The number of people who are willing to get their content through their ears versus through their eyes is way bigger. Reading is hard for most people. It's a slog. They have to reread paragraphs. But listening is great.

    9. TFTim Ferriss1:31:33

       It's also single tasking, right? It's a single activity, whereas the listening, in an attention economy where people are trained to feel there is a scarcity of time.

    10. MHMorgan Housel1:31:43

        Yes. The other experience I've had is that because of that experience with the audiobook, four months ago I started a podcast, and I've put virtually no effort into it. I've done, like, 14 episodes. They're all about 10 minutes long. That podcast is already larger than my blog that I've been working on for 16 years.

    11. TFTim Ferriss1:32:01

        [laughs]

    12. MHMorgan Housel1:32:02

        It just exploded. Which is kinda depressing, but I think it just goes back to the audience that's willing to listen is way bigger than the audience that will read. Now, I do think it's the case that not only is reading hard, but writing is hard. It's easier to speak than it is to write in text. So the people who are good at it will always have an audience. That will always be there. If, if, if you write a textbook, if you start blogging again, as you said you would, you'll have an instant audience because you're good at it. But I think there are a lot of people ... I would be willing to bet, without knowing this, I'd be willing to bet that Joe Rogan is not a good writer, but he's a very good speaker. And so they're just very different skills.

    13. TFTim Ferriss1:32:40

        They're very different. I will say that I actually think Joe, if he wanted to make it a high priority, would be a very good writer, as a comedian.

    14. MHMorgan Housel1:32:50

        That might be the case, and I'm probably being unfair to him.

    15. TFTim Ferriss1:32:52

        I think he'd be good.

    16. MHMorgan Housel1:32:52

        But I do think they are very different skills.

    17. TFTim Ferriss1:32:54

        They can be mutually exclusive.

    18. MHMorgan Housel1:32:58

        Yes.

    19. TFTim Ferriss1:32:59

        They don't have to come as a pair. Yeah.

    20. MHMorgan Housel1:33:01

        There are people who are good writers and not good speakers, and vice versa. So I think that the people who try to do both will by and large be not that great at either of them, and I think the, I think most people should probably try to pick one or the other. When I started my podcast, I thought 90% chance it's not gonna work. Now I put those odds at, like, 60% chance it's not gonna work, just 'cause I've always been a writer. I like typing.

    21. TFTim Ferriss1:33:25

        Mm.

    22. MHMorgan Housel1:33:25

        That's when I think I do my best work. I think there's always gonna be a market for either, and the content creators who are gonna screw themselves are the people who try to be everything to everybody. You know, most, most book publishers want authors to narrate their own audiobooks.

    23. TFTim Ferriss1:33:40

        Mm-hmm.

    24. MHMorgan Housel1:33:40

        And I haven't done it for either of my books, because it's not my skill, and I wanna pass it to someone whose skill it is. And it's always been astounding to me that they want authors who are not good speakers to do it, even if they're not that good at it. So it's ... I, I, I think that's an analogy for-

    25. TFTim Ferriss1:33:55

        [laughs]

    26. MHMorgan Housel1:33:56

        ... where, where text is going too.

    27. TFTim Ferriss1:33:58

        I just [laughs] I'm laughing 'cause I thought of this story. Hope I'm not speaking out of school here, uh, but I'm pretty sure he, he, he's mentioned it publicly. A.J. Jacobs, who's an amazing writer. He wrote The Year of Living Biblically. He's written many books that I think are very, very smart. They're also very, very funny. You could, uh, I, I recommend, uh, people check out also an Esquire piece he wrote called I Think You're Fat, which is [laughs] an experiment in radical honesty. [laughs]

    28. MHMorgan Housel1:34:27

        Such a good title.

    29. TFTim Ferriss1:34:28

        Great writer. He said to me when he was persuaded to read his own audiobook, he went in for the recording session, and a few hours in they said, "Look, A.J., why don't you just go home, get some rest, take some decongestants, and we'll see you when you're feeling better." And he's like, "What do you mean feeling better? This is just my voice." [laughs]

    30. MHMorgan Housel1:34:50

        [laughs]
19. 1:34:56 – 1:44:56

    Books vs. podcasts.

    1. TFTim Ferriss1:34:56

       audiobooks. But let me come back to text versus audio. And this is gonna be hard to get from any analytics, so there's gonna be some guesswork involved. But do you value a read of, say, one of your blog posts in the same way that you value a single listen of a podcast episode? And embedded in this is, do you think they are the same audience?

    2. MHMorgan Housel1:35:23

       I know they are not the same audience.

    3. TFTim Ferriss1:35:25

       Or is it like speaking at a general business conference versus speaking at TED, where you get-

    4. MHMorgan Housel1:35:30

       Yeah

    5. TFTim Ferriss1:35:30

       ... maybe 10,000 people in the first and 1,000 people at the second, but that does not mean the latter is automatically worth 10% of the former.

    6. MHMorgan Housel1:35:40

       It's definitely not the same audience, and the reason I know that is because every podcast episode I do I'm reading an old blog post, and nobody cares because the people who are listening to it did not read the blog post.

    7. TFTim Ferriss1:35:49

       [laughs]

    8. MHMorgan Housel1:35:50

       And so, [laughs] so, so for them it's all brand-new content. I just came up with it. Some of these blog posts I wrote 10 years ago, but it's all new to them. And so I know it's not the same, and I think there are people like myself. I will listen to podcasts on planes, and that's it. But other than that, I, I just read. When I'm home, I never listen to anything. I just read. And even at night when I'm falling asleep, I can try Netflix for a little bit, but really what I wanna do is read a book. And for me, I think the reason why I like reading better is because it's easier to zip your eyes up and reread a paragraph than it is to rewind and try to figure it and try to like, "What, what, what'd that guy just say?" It's easier to just zip your eyes and read it again. And so I think you absorb a lot more of it by reading. At least that's true for me.

    9. TFTim Ferriss1:36:27

       Mm.

    10. MHMorgan Housel1:36:27

        So I would be shocked if I deviated from that. I, I think I'll be reading text forever, and, and I think I'll, I wanna be a writer forever. Even if my podcast were to become very successful, I think I would say I'm, I'm, I'm a writer. I'm curious what your thought is that, because you were a very successful writer before you started the podcast.

    11. TFTim Ferriss1:36:45

        Yeah.

    12. MHMorgan Housel1:36:45

        If you go back to 2013 before your podcast started, would you have shaken your head in disbelief at the idea that you didn't abandon writing, but you became much more of a speaker than a writer?

    13. TFTim Ferriss1:36:58

        I certainly wouldn't have seen it coming. I started this podcast as an experiment. I think I committed to six episodes to see if I could refine my conversational skills, question asking, reduce my stammering, and get rid of some verbal tics, with the assumption that even if I stopped after six episodes, that would help me with my interviewing for nonfiction writing.

    14. MHMorgan Housel1:37:23

        Yeah.

    15. TFTim Ferriss1:37:24

        So I couldn't have foreseen it. Having done so many interviews prior to starting the podcast, I had confidence that I could do interviewing well, but I never could have foreseen the podcast getting to a billion downloads, right?

    16. MHMorgan Housel1:37:42

        Right.

    17. TFTim Ferriss1:37:42

        I mean, I, that's just not... That would've been so far outside of any mental schema for thinking about anything that I would do. [laughs] It, it wouldn't, it wouldn't have occurred to me.

    18. MHMorgan Housel1:37:55

        When you think about the arc of your career, would you put the podcast above The 4-Hour Workweek in terms of importance and success, however you wanna measure that?

    19. TFTim Ferriss1:38:02

        I don't think I would, because if I separate them out into discrete, independent pieces, I think that's a mistake, since there was a domino effect, and without that first domino, the second, the third, and the fourth domino don't tip over. So I would have to still give The 4-Hour Workweek, by far, love it or hate it for me, [laughs] blessing and the curse, [laughs] that is what made everything subsequently possible. So I still have to give The 4-Hour Workweek the vast majority of, of credit. Remarkably, that book, and probably Tools of Titans, are my two best-selling books still to this day.

    20. MHMorgan Housel1:38:43

        Yeah.

    21. TFTim Ferriss1:38:43

        And I would say a third, probably, almost all of the tools referenced in The 4-Hour Workweek are out of date. And that makes me-

    22. MHMorgan Housel1:38:54

        Yeah

    23. TFTim Ferriss1:38:54

        ... very happy though, because the, the philosophical backbone, the, the core fundamental pieces are timeless, in a sense. They, they really don't have an expiration date. So I've been very pleased to see that. But it's for s- it's nonetheless remarkable that the book continues to be read and recommended, despite the fact that I'm telling people to go to a magazine rack and use various tools to determine readership of magazines as a way of sizing audience. I mean, that's Model T, [laughs] or maybe the horse, horse-drawn carriage, compared to what we can do today. So at some point, perhaps I'll update that, but that's a losing game also. Updating tools is just a losing game. I could have updated-

    24. MHMorgan Housel1:39:35

        Yeah

    25. TFTim Ferriss1:39:35

        ... three years ago, and then ChatGPT and other LLMs come along, and I have to do a complete revision after that. So I assume the principles will enable people to find the tools. But the, the podcast, I would say, certainly at this point, nine out of 10 people who come up to me on the street will mention the podcast and will not mention any book.

    26. MHMorgan Housel1:40:00

        Yeah. That's astounding.

    27. TFTim Ferriss1:40:01

        Which is astounding. Nonetheless, I do think the decay rate on the podcast is much higher and will be, on a, on a totality, much faster than the book. In other words, not only will people forget a given episode, they will forget that I had a podcast or anything related to my podcast, I think, much faster than they will the books, simply because there's so much fucking noise. There's so much. The replacement rate is so high, and people can only hold so much in their heads, [laughs] myself included.

    28. MHMorgan Housel1:40:39

        Yeah.

    29. TFTim Ferriss1:40:39

        So the sort of, [laughs] you know, first in, first out [laughs] sort of mental archiving is such that I do think if I stop podcasting today and people continued listening to podcasts who were devout listeners of The Tim Ferriss Show, I think they would forget about The Tim Ferriss Show within a few years, one or two years if I'm being optimistic. Whereas I do think the books, for whatever reason, seem to have a more persistent, enduring foothold in the mind than do the podcast. Even, even if it's a, the best episode I've ever put out, doesn't matter.

    30. MHMorgan Housel1:41:20

        I don't disagree with it. I'm just trying to figure out why that would be, and maybe it's because in a book, if it's 20 chapters, that's all you got. It's just 20 chapters in front of you, so it, it gives the impression or the truth that what is there is profound.
20. 1:44:56 – 2:04:30

    Recommended reading.

    1. MHMorgan Housel1:44:56

       pleasure.

    2. TFTim Ferriss1:44:56

       Mm-hmm. Speaking of books [laughs] , so let's, let's go through a list, and I'd love for you to pick one or two. We can certainly talk about all of them, but, uh, great books that you've read lately. Triangle Fire, Empty Mansions, The Strange Last Voyage of Donald Crowhurst, and then one that's a little cryptic, Robert Caro, if I'm getting the pronunciation right, comma, Working. I don't know what that refers to. Maybe we start there because I believe-

    3. MHMorgan Housel1:45:26

       Sure

    4. TFTim Ferriss1:45:26

       ... that is the author of The Power Broker.

    5. MHMorgan Housel1:45:28

       Yep.

    6. TFTim Ferriss1:45:29

       Could you maybe start with Robert and what that, what that refers to?

    7. MHMorgan Housel1:45:34

       Robert Caro is probably the greatest biographer of all time. He's certainly the most thorough biographer of all time. Most of his books take between 10 and 30 years for him to write. He's done biographies on Lyndon Johnson and Robert Moses, who was an instrumental figure in building the modern New York City. And he's just ridiculously thorough. And so he wrote a book called Working, which is his life and practice and strategy as a writer. Like, how, like-

    8. TFTim Ferriss1:46:00

       Mm

    9. MHMorgan Housel1:46:00

       ... how did he become a writer and how does he do it? And you realize that his talent is just patience. Like, he will sit in an archive for 15 years.

    10. TFTim Ferriss1:46:08

        [laughs]

    11. MHMorgan Housel1:46:08

        And he has this motto: "Turn every page." So he talks about when he decided to do a biography of, of Lyndon Johnson. The first thing that he did is he moved his wife to the middle of nowhere Texas, where Lyndon Johnson grew up. And he said there's no way that he could understand the man unless he lived in the town that he grew up in. Like, full-on-

    12. TFTim Ferriss1:46:27

        Very hard to understand his wife [laughs] .

    13. MHMorgan Housel1:46:29

        Exactly. There's a funny quote where his wife said, "Why couldn't you have done a biography of Napoleon?" And he could have, like, moved to Paris or something.

    14. TFTim Ferriss1:46:35

        [laughs]

    15. MHMorgan Housel1:46:36

        So he moved there, and he goes to the Lyndon Johnson Presidential Library, and there's, I think it's literally, like, 8,000 boxes of material. And he goes through every page. He goes through every page. It takes him decades to do this. And so there's just no one that is as thorough as-

    16. TFTim Ferriss1:46:52

        Sounds like a prison sentence [laughs] .

    17. MHMorgan Housel1:46:53

        Seriously. But I think he loves every second of it. I think the hunt for him is incredible. So even with someone like Lyndon Johnson, Robert Moses is a little more obscure, but everybody knows Lyndon Johnson. His life was so well documented. But Robert Caro will find these nuggets that no one else has ever uncovered before. And I, like, I have so much admiration for that f- in terms of sticking out as a writer and doing something different. A crazy stat that I've always... And you can take this several different ways, but there are 1,100 biographies of Winston Churchill, published biographies-

    18. TFTim Ferriss1:47:23

        [laughs]

    19. MHMorgan Housel1:47:23

        ... of the same person talking about the same life. But I bet there's, like, 50 of those that really stand out because they found a different angle, they found a different fact, or they told a better story. So Robert Caro, I, I think, here's how I'd phrase this: Ken Burns, who does the documentaries, his skill is telling a story, and, uh, most of the information in his documentaries is already well known about the Civil War or World War II, whatever it would be. It's not new information. But he tells such a good story that it's captivating, and you're gonna watch it. Robert Caro, and I mean this with the most respect, is not the best storyteller, but his ability to uncover new information is unparalleled, completely unparalleled to everyone else. So I, I admire him that, like, his skill is just he works harder and he's more patient than any other writer that's ever existed.

    20. TFTim Ferriss1:48:09

        Hmm. Is there anything else that you took from that book that you have applied or hope to apply to your own writing or creative process?

    21. MHMorgan Housel1:48:19

        One of it that I think, this, uh, and I'm not saying this to blow smoke, but it reminds me of you, is that in his interviewing process when he's interviewing people, he would always just stop and say, "Tell me more. Tell me more."

    22. TFTim Ferriss1:48:31

        Mm-hmm.

    23. MHMorgan Housel1:48:31

        "Keep going."

    24. TFTim Ferriss1:48:32

        Mm-hmm.

    25. MHMorgan Housel1:48:32

        "Tell me more." There was one scene from the book where he's talking about Lyndon J- he's interviewing Lyndon Johnson's chauffeur, who was with him for, like, 30, his entire career as a politician Lyndon Johnson had the same driver. And so he, this driver saw everything. And Robert Caro says, "Tell me, like, when Lyndon Johnson was in the backseat of the, of the car when he was campaigning, what was he doing?" And the c- chauffeur is like, "I don't know. I, I wasn't paying attention." But he just kept asking. "No, no, tell me more. What was he doing? What was he talking about? What, what'd he do?" And he kept, kept getting the answer, "I don't know. I wasn't paying attention." And finally after, like, weeks of asking the same question, the chauffeur says You know what? After campaign rallies, Lyndon Johnson would talk to himself in the backseat of the car and he would say to himself, mumbling to himself, "This worked, this didn't. I need to get better at this. I need to double down on this." And like that's fascinating that he would talk to himself, and it took Robert Caro weeks of asking the same question before he got to that.

    26. TFTim Ferriss1:49:24

        [laughs] Like a black site interrogation just wearing him down.

    27. MHMorgan Housel1:49:29

        Yes, but I think that's true for everyone. And I think a lot of it is if you asked me what did I do last week, I'd say hon- honestly, I don't, I don't really remember. But if you kept asking, I probably did something that was meaningful to me. Like if you kept asking and kept pushing, then the memories start to bubble up, and I think Robert Caro's just a pro at that.

    28. TFTim Ferriss1:49:45

        Hmm. So what of these other books? Maybe we pick one, if you had to pick two from this list. So Triangle Fire, Empty Mansions: The Strange Last Voyage of Donald Crowhurst, or maybe you can give just a, a very brief, not to leave people hanging, what are these books? And then if you had to pick one more, if you could only pick two for you personally from this list, what the other one would be.

    29. MHMorgan Housel1:50:08

        Yeah. Here's what's really interesting about The Triangle Fire. I think most, if not everyone here listening to this, knows what the Triangle Fire is.

    30. TFTim Ferriss1:50:15

        I have no idea.
21. 2:04:30 – 2:06:22

    Has writing Same As Ever changed how Morgan operates in the world?

    1. TFTim Ferriss2:04:30

       Hmm. Fascinating. All right. Might dig into that separately another time. So let's talk about Same As Ever. How has writing this book, thinking about the content, developing your own thinking around these lines, informed how you make decisions? If that's a good question. Feel free to rephrase it if there's a better way to put it. But how has this informed how you operate in the world, how you make decisions, how you react emotionally to things? However you wanna answer that.

    2. MHMorgan Housel2:05:03

       I think I've always been, as an investor, let's focus on that, of the view, I mentioned this earlier, that no one has any idea what the future's gonna hold. But if you can have the right behaviors, then it doesn't matter. Whatever the future throws at you, you're, you're gonna be okay if you have a level head and a proper asset allocation for you to absorb all the surprises. So I've never been the kinda person who's like, "Let's predict what the stock market's gonna do in the next year. Let's predict the next recession." I've always just been the like, "Hey, if I can manage my asset allocation and my mindset so that I can absorb anything that might happen, that's the best we can do." And not only is it the best you can do, if you can actually do that, it's, it's really good. And so that's what I try to do with a lot of these topics that are repeating in life. I think a lot of it can be summarized as viewing life from 30,000 feet, is not only the best that we can do, it's actually a really good spot to view how the world works. And for so many topics, I would say, look, if you have cancer, you want a doctor who understands the very fine minute details of that. But if you're talking about investing or philosophy or politics, you, y- you wanna stay at 30,000 feet. That's as good as you're gonna get. And so a lot of this is just like understanding the behaviors that are very broad and macro, rather than fooling yourself into thinking that you can understand the finer details of what's going on around you.

22. 2:06:22 – 2:08:32

    Who is the intended audience for Same As Ever?

    1. TFTim Ferriss2:06:22

       Who's this book for, if you wanna build on that? What is the audience for this book? What should they hope to come away from the book having learned or absorbed?

    2. MHMorgan Housel2:06:34

       The answer to that will and did make every publisher shake their head because they don't like it, but it's the truth for all of my writing.

    3. TFTim Ferriss2:06:41

       [laughs]

    4. MHMorgan Housel2:06:42

       The answer is that the book is for me. I wrote it for me. I wrote Psychology of Money for me. I wrote my, all my blog posts for me. I call it selfish writing, an audience of one. The reason I do that is not because I wanna think of myself as self-centered. The reason I do it is because I think you do your best work if you are being introspective about yourself. And quote, unquote, "knowing your audience," that slips into pandering very quickly, and pandering is the worst writing. Not only is it the worst like content, it's the worst writing style is to pander to your audience. And so I wrote this book answering questions that I have about myself, and I wrote it in a style that is interesting to me, and I tell stories that I think are interesting. There's probably a lot of death and destruction because as you can tell-

    5. TFTim Ferriss2:07:20

       [laughs]

    6. MHMorgan Housel2:07:21

       ... [laughs] that's kinda what I gravitate towards. Look, in most of the world, I wanna think of myself as a selfless person, except for writing And then it's like, it's just me and the keyboard and nobody else. And I think that's served me really well as a writer, just to stick with an audience of one for myself. Now, I hope, and I think that I can take a leap of faith, that if I have these questions about myself, other people probably have it about themselves. Not everybody, you're never gonna please everybody, but that's the leap of faith that I took with Psychology of Money is like those topics were really interesting to me, and I bet they're interesting to you, too. So that's, that's what I say. Now, I hope at the end of both books, Psychology of Money and Same As Ever, you become more introspective about what you want out of life. You start answering questions that you didn't have before about life, and the things in the world that confuse you and cause you angst in investing, in money, in politics, in global affairs, whatever it might be, you have a greater sense of equanimity around them. Not because you have a new answer, but because you come accepting that there are some things we can't answer, and the best things that we can do is just understand the broader behaviors that guide how people react to these topics.

    7. TFTim Ferriss2:08:26

       Getting on the same page as Eleanor Roosevelt [laughs] in the '60s.

    8. MHMorgan Housel2:08:30

       Trying to.

    9. TFTim Ferriss2:08:30

       Trying to.

23. 2:08:32 – 2:10:21

    Parting thoughts.

    1. TFTim Ferriss2:08:33

       Morgan, always enjoy our conversations. Is there anything else that you would like to add? Anything else you'd like to mention, whether it's a story, maybe a request of the audience, anything you'd like to draw attention to? Anything you'd like to say at all before we wind to a close here?

    2. MHMorgan Housel2:08:48

       The only thing that comes to mind after having done this twice with you now, Tim, is that most conversations in life, I'm exhausted after 20 minutes, and I could go for three hours with you and keep doing it all day. So it's such an honor to do this, and I really admire your skill as an interviewer. It makes these things so much fun. Here's what I would say, too, as I think about what we just did here. I think half of what I just said I had never said before on another podcast.

    3. TFTim Ferriss2:09:11

       Hmm.

    4. MHMorgan Housel2:09:11

       And a quarter of it had never even crossed my mind before.

    5. TFTim Ferriss2:09:15

       Hmm.

    6. MHMorgan Housel2:09:15

       Which is a testament to the questions that you ask, so thank you for doing this.

    7. TFTim Ferriss2:09:18

       Oh, thanks, Morgan. Really appreciate you saying that. Fun for me also. Super fun. So that's, I think, uh, a testament to your ability to jazz improv in the way that you did in this conversation. People can find you online at morganhousel.com, Twitter @morganhousel, IG, that's Instagram for you [laughs] folks of my vintage [laughs] , the Gram, @morganhousel, and the book is Same As Ever: A Guide to What Never Changes, which people can find at fine booksellers worldwide. And Morgan, thank you so much again. Really appreciate all the time. And to people listening, we will have links to everything in the show notes, as per usual, at tim.blog/podcast. Just search Morgan and this and, uh, Morgan's first episode will pop right up. Until next time, be just a bit kinder than is necessary to others and to yourself. And as always, thank you for tuning in

Episode duration: 2:10:42