History is an unassailable guide to the future. A trap many investors fall the “historians as prophets” fallacy: an over-reliance on past data as a signal to future conditions in a field where innovation and change are the lifeblood of progress. Past performance is not indicative...

Everything has a price, but not all prices appear on labels.

The price of investing success is not immediately obvious. It’s not a price tag you can see, so when the bill comes due, it doesn’t feel like a fee for getting something good. It feels like a fee for doing somethi...

You can be wrong half the time and still make a fortune.

Anything that is huge, profitable, famous, or influential is the result of a tail event, an outlying one-in-thousands or millions event.

• Most of our attention goes to things that are huge, profitable, famou...

Everyone looks at money through the lens of their past experiences.

You can read what it was like to lose everything during, say, The Great Recession, but you will never bear the emotional scars of those who survived it and are now afraid to invest again. It’s impo...

Spending money to show people how much money you have is the fastest way to have less money.

We tend to judge wealth by what we see because that’s the information we have in front of us. But the truth is that wealth is what you don’t see. Rich is a current income. Nice cars...

Building wealth has little to do with your income or investment returns and more to do with your savings rate. The value of wealth is relative to what you need. A high savings rate means having lower expenses than you otherwise could, and having lower expenses means your savings ...

No one is impressed with your possessions as much as you are.

People tend to want wealth to signal to others that they want to be liked and admired. But in reality, those other people often bypass admiring you, not because they don’t think wealth is admirable, but because t...

Stories trump statistics. The more you want something to be true, the more likely you are going to believe a story that overestimates the odds of it being true.

• The more you want something to be true, the more likely you are to believe a story that overestimates the od...

Rich people do crazy things. Bernie Madoff had everything only to lose everything because he had no sense of enough. The lesson? There is no need to risk what you have and need for what you don’t have and don’t need.

• The hardest financial skill is getting the ...

Good investing is not about making good decisions. It’s about consistently not screwing up. There are a million ways to get wealthy. The only way to stay wealthy is some combination of frugality and paranoia.

• Money success in a single word: survival. The ability to sti...

Optimism sounds like a sales pitch. Pessimism sounds like someone trying to help you.

In finance, pessimism is paid more attention than optimism and is, therefore, more persuasive. “It’s easier to create a narrative around pessimism because the story pieces tend to be f...

Controlling your time is the highest dividend money pays. The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want, when I want, with who I want, for as long as I want.” This is the highest dividend money pays:

• The ...

Doing well with money is not necessarily about what you know, but about how you behave. Is what Morgan Housel explores in his popular book, where he shares 19 stories that explore the behavioral aspects of personal finance.

To Note:

• Financial success is n...

Nothing is as good or as bad as it seems. Every outcome in life is guided by forces other than individual effort. Bill Gates had a competitive advantage over millions of other students because he attended one of the only high schools in the world that had the cash and foresig...

Aiming to be mostly reasonable works better than trying to be coldly rational.

“Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic, and you have a better chance of sticking with it for the lon...

Avoid taking financial cues from people playing a different game than you are.

Few things matter more with money than understanding your own time horizon and not being persuaded by the actions & behaviors of people playing different games than you are. Go out of your way to...

The most important part of every plan is planning on your plan, not going according to plan.

Have room for error when estimating your future returns. For his own investments, Housel assumes the future returns he’ll earn in his lifetime will be ⅓ lower than the historic aver...