The Psychology of Money with Morgan Housel

You spend years trying to learn tons of new stuff, but then look back and realize that just a few big ideas truly changed how you think and influenced most of what you believe.

Let me share a couple that had a big impact on me. 

I think there’s an “ideal” net worth for everyone, when money not only stops bringing pleasure but becomes a social liability. And that number is probably lower than most people think.

A subtle problem with money is that assets are easy to measure but liabilities can be hidden. Measuring assets is simple. But how do you measure losing your privacy? Or the nagging doubt that some friends only like you for your money? That’s way harder.

My theory is that the more money people have, the more social debt they tend to be burdened with.

Chris Rock joked that Bill Gates would jump out the window if he woke up with Oprah’s money. Like most comedy, it’s funny because it contains a nugget of truth.

There is no objective level of wealth -- everything is just relative to something, or someone, else. That means a billionaire can feel poorer than someone with infinitely less money.

This episode tries to create a spectrum of wealth based on the quality of your life, feelings, and social circles, versus measuring it on money alone. 

A weird thing in life is that everyone strives for a good life because they think it will make them happy. But what actually brings happiness is the contrast between what you have now and whatever you were just doing.

The best drink you will ever taste is a glass of tap water when you’re thirsty.

The best food you will ever eat is fast food when you’re starving.

The best massage you will ever feel is sitting on a couch after a long run.

The best sleep you will ever experience is when your newborn finally sleeps through the night.

This episode is about happiness, and the counterintuitive places it's often found. 

The knee-jerk way to set expectations is to anchor to what everyone else has right now. But imagine the tragedy of there being unbelievable progress throughout your life and you enjoy none of it because you expected all of it.  

This episode is all about expectations, and how the key to happiness in so many things in life is to aim low. 

Sometimes the best you can do when learning about any topic is to memorize a few short stories -- quick, direct, and to the point, that you're likely to remember forever.

This episode shares 15 short stories that have stuck with me, and helped me contextualize so many things in life, work, and investing.

One other note: I have a new book coming out this November. It's called Same as Ever, and you can pre-order it here:  http://amzn.to/41CHgKM

There are so many times in life where what you do is less important than how long you've been doing it for. 

It's true in careers. 

It's true in relationships. 

It's true in sports. 

And it's true with money. 

This episode is about compounding -- and how staying put, uninterrupted, is often the most overlooked skill. 

If you can explain something important in just a few words, it's a double win: You've probably found something that's obviously true, without needing further explanation or detail. And it's probably something you'll remember for a long time, easy to recall without having to memorize dozens of details. 

This podcast is a smattering of ideas that have been important and impactful to me, shared in as few words as I can manage. 

This episode has little to do with money. But in some ways it has everything to do with money. 

That's the riddle I want to unpack. 

I want to share a bunch of examples of what one field can teach us about another. 

What can we learn from biology that teaches us something about money?

What can we learn from physics that teaches us something about business? 

If you find something that is true in more than one field, you’ve probably uncovered something particularly important. The more fields it shows up in, the more likely it is to be a fundamental and recurring driver of how the world works.

One of the most complicated topics in money: How it impacts your family.

Your spouse.

Your kids. 

How do you avoid spoiling kids? 

How do you and your spouse learn to agree about the best way to spend? 

There are no easy answers -- but I try my best here, including sharing the letters I wrote to my kids when they were born.