#576: Morgan Housel — The Psychology of Money, Picking the Right Game, and the $6 Million Janitor - Deepstash

Keep reading for FREE

Morgan Housel interview

Morgan Housel interview

Morgan Housel is a partner at the Collaborative Fund and serves on the board of directors at Markel Corporation. He is also a former columnist at The Motley Fool and The Wall Street Journal and author of the award-winning book The Psychology of Money.

Tim Ferris and Morgan discuss how understanding investing and risk tolerance is more of a phycological challenge than a purely financial one.

36

345 reads

MORGAN HOUSEL

Money isn’t a means to wealth, it’s a means to autonomy and independence.

MORGAN HOUSEL

43

495 reads

How to become a great investor

How to become a great investor

The way to become a great investor is to maximize the amount of dollars you accumulate over the course of your life. Most of the time, it is not earning the highest returns.

For example:

  • Warren Buffett is the wealthiest investor of all time.
  • Jim Simons the greatest investor of all time in terms of long term average annual returns.

Warren Buffett’s long term average annual returns are about 21% per year. Jim Simons’ are like 66 % per year. Yet, Warren Buffett is wealthier because has been investing for much longer.

37

240 reads

 The size is the strategy

Cope’s rule states that organisms get bigger over time. But there are huge downsides to being big. There’s always a sweet spot in evolution.

When something becomes too big to manage, it can cause you to fail.

35

267 reads

MORGAN HOUSEL

“Financial Advice for My New Son”

“You might think you want an expensive car, a fancy watch, and a huge house. But I’m telling you, you don’t. What you want is respect and admiration from other people, and you think having expensive stuff will bring it. It almost never does — especially from the people you want to respect and admire you.”

“When you see someone driving a nice car, you probably don’t think, ‘Wow, that person is cool.’ Instead, you think, ‘Wow, if I had that car people would think I’m cool.’ Do you see the irony? No one cares about the guy in the car."

MORGAN HOUSEL

52

214 reads

Instil the value of money and the ability to control how it affects your life

Most people want independence and autonomy. Having the money that you don’t have to spend becomes the most valuable thing in the world when it lets you gain control of your time.

But freedom and autonomy carry a lot of responsibility with them. 

38

219 reads

How to approach risk

How to approach risk

Risk is just the odds that something will prevent you from achieving your goals. Everyone has very different goals and aspirations and time horizons, so everyone thinks about risk differently.

If your goals lie 50 years in the future, you probably wouldn't care what will happen in the next three years. But if you're 90 years retired widow on a fixed income, you'd have a very different definition of risk. 

When people argue with each other on risk, it's really people with different risk tolerances and different time horizons talking over each other.

36

149 reads

Rational vs reasonable

There are many things in finance that look smart and sound smart, and the numbers add up, but it's completely opposed to how the real world works.

Then there are many things that investors do that are not rational but is perfectly reasonable and align with how people's heads work. 

For example, people own stocks that are closest to where they live. People who live in America only own US stocks, and those in Germany only own German stocks. It's not rational, but it's very reasonable. It's easier to invest your life savings in companies you're most familiar with.

36

154 reads

Ensure your children grow up to be financially smart

Buffett has a great quote on wealth where he says he wants to leave his kids enough money that they can do anything, but not so much money that they could do nothing.

Give children a safety net, but not fuel. Parents shouldn't give their children money just to make their life better. Children need to know that they have to make it on their own. 

38

161 reads

CURATED BY

jacomichae

Scientific laboratory technician

Ready for the next level?

Read Like a Pro

stash-superman-illustration

Explore the World’s

Best Ideas

200,000+ ideas on pretty much any topic. Created by the smartest people around & well-organized so you can explore at will.

An Idea for Everything

Explore the biggest library of insights. And we've infused it with powerful filtering tools so you can easily find what you need.

Knowledge Library

Powerful Saving & Organizational Tools

Save ideas for later reading, for personalized stashes, or for remembering it later.

# Personal Growth

Take Your Ideas

Anywhere

Organize your ideas & listen on the go. And with Pro, there are no limits.

Listen on the go

Just press play and we take care of the words.

Never worry about spotty connections

No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.

Get Organized with Stashes

Ideas for your next work project? Quotes that inspire you? Put them in the right place so you never lose them.

Join

2 Million Stashers

4.8

Stars

5,740 Reviews

App Store

4.7

Stars

72,690 Reviews

Google Play

samz905

Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.

Shankul Varada

Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.

Ashley Anthony

This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!

Sean Green

Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.

Ghazala Begum

Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.

Giovanna Scalzone

Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.

Jamyson Haug

Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.

Laetitia Berton

I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!

Read & Learn

20x Faster

without
deepstash

with
deepstash

with

deepstash

Access to 200,000+ ideas

Access to the mobile app

Unlimited idea saving & library

Unlimited history

Unlimited listening to ideas

Downloading & offline access

Personalized recommendations

FAQ

Claim Your Limited Offer

Get Deepstash Pro

BLACK FRIDAY

75% OFF | 1-Year Pro Subscription

Claim Offer