The Knowledge Project with Shane Parrish

#195 Morgan Housel: Get Rich, Stay Rich

2746 snips
May 28, 2024
Guest
Morgan Housel
In this insightful conversation, Morgan Housel, a partner at Collaborative Fund and author of "The Psychology of Money," delves into what it truly means to get rich and stay rich. He highlights the psychological toll of financial decision-making, the contrast between being rich and wealthy, and the significance of compounding. Housel shares his own financial 'mistake' that improved his peace of mind and explores the risky behaviors of lower-income individuals, like lottery playing. He also discusses storytelling's pivotal role in finance and parenting.
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INSIGHT

Index Funds Work

  • Index funds succeed because few stocks drive most returns, guaranteeing ownership of future winners.
  • Investing debates often reflect differing personalities, not right or wrong answers.
ANECDOTE

Lottery and Poverty

  • Poorer people disproportionately play the lottery, seemingly irrational.
  • Daniel Kahneman explains higher risk tolerance when all options appear bad.
INSIGHT

Luck in Investing

  • Birthplace and time significantly impact financial views, highlighting luck's role.
  • Controllable actions that change outcomes aren't luck; luck is what you can't control.
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