Morgan Housel | How To Become Wealthy, Stay Wealthy & Be Happy | Modern Wisdom Podcast 222

If you were to write a golden rule of becoming wealthy, what do you think it would be?

Live below your means and be patient. That's it. That's 90% of finance. That is 90% of finance.

(laughs)

That's not even, that's not even like the simplified version. If you can actually do that, you have a, you have a PhD in finance.

(laughs)

That's, that's 90% of finance.

If the people of the internet want to watch me and you mud wrestle for money-

(laughs)

... there is a, there is a pay-per-view audience out there.

There's a, there's, I, I, I have a price for everything.

(laughs)

There's a price.

There's a price on everyone's head. Oh, come on. Let's get started. So this is the third time on the show this year. So to everyone on the internet who is wondering, things are getting pretty serious between me and Morgan now. Welcome back, mate.

Thanks for having me. I'm happy to be here. I always enjoy our conversations, so I'm happy to come back for a third and hopefully more times after this. We'll see if I don't screw it up here for the third time, and hopefully there'll be a fourth, uh, forthcoming later this year.

That's the plan, man. That's the plan. So before we get started, you got a new book out, Psychology of Money. Why should anyone listen to you on finances? What are your credentials?

Well, here's, here's the thing about money. I don't think that credentials necessarily move the needle. That's not true in a lot of fields. If I wrote a book about medicine or aerospace engineering or dentistry, you should not listen to anything that I have to say. Finance though is very different because finance, what matters in finance is not necessarily what you know. It's not about how smart you are or the education that you have or the, the sophistication, the credentials that you have. Doing well with finances, whether it's investing or personal finances, is overwhelmingly, overwhelmingly has to do with how you behave. It has to do with just your relationship with greed and fear, how you think about long-term thinking and your, you know, who you trust, how gullible you are. Those kind of soft topics that is not necessarily what you know. It doesn't matter if you went to Harvard and you worked at Goldman Sachs. If you lose your head during March of 2020 or in 2008, none of that stuff matters anymore. So what's important about investing, I'll give you my credentials. I have been a full-time investing analyst and writer for 13 years. I've been researching and focusing on kind of the intersection of investing history and behavioral finance. The history of how we think about money, what we can learn from those lessons and how we can think about finances in a more productive way. That's what I've done, and this book is kind of a culmination of the 20 most important things that I learned during that period. I try to wrap it in with a bunch of stories that have nothing to do with investing, but they all have a, a really important takeaway about how we can think about risk with our money in a more coherent way.