The Morgan Housel Podcast -- timeless lessons on wealth, greed, and happiness.
Let me share a little theory I have about optimism, and why progress is so easy to underestimate.
I’ll explain it in four parts.
A Few Thoughts on Spending Money
Behavioral finance is now well documented. But most of the attention goes to how people invest. But the study of how you spend money might be far more interesting -- and practical. How you spend money can reveal an existential struggle of what you find valuable in life, who you want to spend time with, why you chose your career, and the kind of attention you want from other people.
There is a science to spending money – how to find a bargain, how to make a budget, things like that.
But there’s also an art to spending. A part that can’t be quantified and varies person to person.
Information That Would Get Your Attention
There’s obviously a hierarchy of information. It ranges from life-changing good to life-changing disastrous.
That got me thinking: What would be the most interesting and useful information anyone could get their hands on?
Years ago I asked that question to Yale economist Robert Shiller. “The exact role of luck in successful outcomes,” he answered.
I loved that answer, because nobody will ever have that information. But if you did, your entire worldview would change. Who you admire would change. The traits you think are needed for success would change. You would find millions of lucky egomaniacs and millions of unlucky geniuses. The fact that it’s impossible to possess this information doesn’t make it useless – just thinking about how powerful it would be to have it forces you to ponder a topic that’s important but easy to ignore.
Keeping the idea that the most interesting information doesn’t have to be realistic – it can be impossible-to-obtain, magical-wish thinking – here are three other things that would get your attention.
Active vs. Passive Learning
There are two big ways to learn:
Active learning: Someone tells you what to learn, how to learn it, on a set schedule, on pre-selected standardized topics.
Passive learning: You let your mind wander with no intended destination. You read and learn broadly, talk to people from various backgrounds, and stumble haphazardly across topics you had never considered but spark your curiosity, often because it’s the topic you happen to need at that specific time of your life.
I can’t be alone in realizing that most of what I’ve learned in life has come from passive learning.
Respect Each Others’ Delusions
One sentence that knocked me off my feet when I read Will and Ariel Durant’s The Lessons of History was: "Learn enough from history to bear reality patiently, and respect one another’s delusions."
I love that so much.
The key here is accepting that everyone is deluded in their own unique way. You, me, all of us.
When you realize that you – the good, noble, well-meaning, even-tempered, fact-driven person that you are – have views of how the world works that are sure to be incomplete if not completely wrong, you should have empathy for others whose deluded beliefs are obvious to you. I am such a fan of Daniel Kahneman’s observation that we are better at spotting other people’s flaws than our own.
This episode shares three reasons why all of us become deluded in our own way.
The 10 Most Important Financial Skills
My wife recently bought me an old book. It's called The Mathematical Theory of Investment. It was written in 1913 and it's as dry and boring as it sounds (but the old weathered cover looks awesome on a bookshelf).
I flipped through it and thought, "Does any of this matter?" These formulas, these charts, this data?
But not nearly as much as the soft, behavioral side of investing.
This episode shares 10 of what I think are the most critical financial skills -- none of which you'll find in a 100-year-old academic text.
New favorite podcast
Very cool and nodding "YES!"
I heard Morgan Housel on "The Next Big Idea" podcast recently, one of my faves and he is so wise and articulate that now I'm a big fan of the podcast! Big picture thinking and long perspective always lift my mood and life feels less chaotic and this podcast helps!