June 9, 2021

The Psychology of Money with Morgan Housel

#6: Renowned financial columnist, Morgan Housel talks with Chris about the psychology of money. They discuss the mindset of winning investors, new ways to think about risk, when to hold cash vs. invest, and how you can stop wanting more and focus on your own financial independence.

Morgan Housel (@morganhousel) is a partner at Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal. He is also the author of the bestselling book The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.


Selected Links From The Episode

Connect with Morgan: Twitter | Website | LinkedIn

Morgan’s book: The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

Benjamin Graham's Books: The Intelligent Investor | Security Analysis

Eric Johnson's Book on Nazi Germany: What We Knew


Full Show Notes

What drove Morgan to write the book? [01:22]

How finance is taught vs. how it actually is in the real world. [03:58]

What is the highest form of wealth? [05:44]

The different levels of financial independence (it is a spectrum) [07:18]

Building up cash: save more or earn more [10:28]

Why don’t people like saving money? [12:30]

Is there a way to stop yourself from wanting more (it’s easier for a specific type of person)? [13:36]

Can you go too far with FIRE (pushing your friends away)? [17:20]

Why do people become irrational when it comes to money? [19:34]

Active vs. Passive Investing, can you do both? [22:16]

Why you don’t actually know how much risk you can tolerate. [26:52]

Getting comfortable with being wrong and why you don’t need to be right all the time [32:34]

Why you need to stick around and make a lot of bets [36:25]

Framework for thinking about financial decisions that went poorly [38:51]

You only know one version of history, but what about the others? [39:30]

What is the best way to learn from history? [41:26]

How school curriculums should change (less algebra and more probability). [44:41]

How can parents help their kids learn about investing? [46:54]

The most overlooked aspect of behavioral finance. [49:04]

The only financial hack you need [50:47]


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