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The Tim Ferriss Show
#702: Morgan Housel — Contrarian Money and Writing Advice, Three Simple Goals to Guide Your Life, Journaling Prompts, Choosing the Right Game to Play, Must-Read Books, and More
Oct 31, 2023
Morgan Housel, a partner at The Collaborative Fund and author of bestselling books on finance, shares his insights on the timeless nature of human behavior and the complexity of wealth. He discusses the hurdles of social debt faced by sudden wealth holders and emphasizes the connection between wealth and happiness. Housel reflects on how fame can amplify inherent traits while urging listeners to prioritize genuine relationships over material success. He also offers intriguing perspectives on the philosophical challenges of decision-making in uncertain times.
02:18:21
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Quick takeaways
- Money does not create happiness; it can enhance contentment.
- Having wealth amplifies existing qualities, revealing true character.
- Giving away money is challenging, both in small-scale and large-scale philanthropy.
- Avalanches in winter sports pose significant risks and dangers.
- Random decisions can have profound consequences on life.
- Fame can compromise personal values and priorities; focus on fulfilling loved ones.
Deep dives
The Impact of Money on Happiness and Contentment
While money can provide contentment and reduce the number of sad days, it does not necessarily lead to happiness. Happiness is derived from experiences and moments of joy, while contentment is a state of satisfaction and lack of anxiety. Money may enhance one's contentment by improving their lifestyle and reducing financial worries, but it cannot create happiness in and of itself.
The Influence of Money on Personalities and Behaviors
Having substantial wealth can significantly affect a person's personality and behavior. It amplifies preexisting qualities, such as kindness or arrogance, rather than fundamentally changing a person's character. Examples of wealthy individuals, like Warren Buffett and Donald Trump, demonstrate how money can shape their disposition and interactions with others. Money often exposes individuals' true nature and can lead to significant shifts in their attitudes and behaviors.
Challenges of Giving Away Wealth
Despite having the means to make a difference, giving away substantial amounts of money can be challenging. Micro-philanthropy and direct giving to individuals in need can be personally fulfilling but come with inherent difficulties in receiving recognition or feedback for the impact made. Furthermore, navigating large-scale philanthropy involves complexities in identifying the right causes and ensuring the funds are used effectively, making it a challenging endeavor even for billionaires.
Avalanche Experiences: Thrills and Dangers
Personal experiences with avalanches are fraught with danger and fear. Avalanche conditions depend on factors like snow layering and weight, making them treacherous for winter sports enthusiasts. The storyteller grew up as a competitive ski racer and recalls a specific incident in Tahoe, where a snow dump created a textbook avalanche condition. Venturing into out-of-bounds skiing with friends, they had a close encounter with an avalanche due to the heavy snow on top of light snow. The dangers of avalanches continue to be a concern for individuals who engage in backcountry skiing and snowboarding.
The Fragility of Life and the Power of Random Decisions
The speaker recounts a personal experience of skiing and triggering a small avalanche, which led to the tragic deaths of two friends. This event had a profound impact on the speaker and highlighted the fragility of life and the role of random decisions. The speaker reflects on the importance of thoughtful decision-making and how even seemingly insignificant choices can have significant consequences. Additionally, the speaker emphasizes the need to appreciate the uniqueness of individual experiences and the concept of alternative histories.
The Hazards of Fame and the Temptation to Impress Others
The speaker acknowledges the dangers and downsides of fame based on personal experiences and observations. They highlight how the pursuit of admiration and validation from others can lead to compromising personal values and priorities. The speaker also highlights the importance of cultivating relationships and respect based on deeper qualities beyond superficial factors like physical appearance or wealth. They advocate for focusing on satisfying a small circle of loved ones rather than seeking validation from a larger audience.
The Unavoidable Costs of Success and the Need for Sustainable Choices
The speaker explores the concept of unavoidable costs that come with achieving success. They discuss how certain hassle or challenges may be considered inherent parts of the journey towards success. The speaker emphasizes the importance of making sustainable choices and maintaining a long-term perspective. They also highlight the risks of attaching one's identity to something that is unsustainable, urging individuals to focus on maintaining a sustainable path rather than short-term gains.
The Future of Text and the Growing Appeal of Audio Content
The speaker reflects on the evolving landscape of content consumption, specifically the increasing popularity of audio formats over text-based content. They share their surprise at discovering that the audiobook version of a book outsells the physical book. The speaker suggests that listening to content is more accessible and less challenging than reading for many people. They observe a shift in audience preferences, highlighting the potential for audio content to reach a larger audience and the need for content creators to adapt to this evolving landscape.
The Importance of Managing Asset Allocation and Behaviors
The speaker emphasizes that managing asset allocation and behaviors is crucial for navigating the unpredictable future. By focusing on broad behaviors rather than trying to predict specific outcomes, individuals can prepare themselves to handle any surprises that come their way. The speaker suggests that having a level head and a proper asset allocation can help absorb unexpected events and foster a sense of equanimity.
The Power of Viewing Life from 30,000 Feet
The podcast episode highlights the value of viewing life from a broader perspective. While it's important to delve into the intricacies of certain topics, such as medical or specialized fields, the speaker argues that for areas like investing, philosophy, and politics, it's better to maintain a 30,000-foot view. This perspective recognizes that some questions may never have concrete answers and encourages accepting the limitations of our understanding. By doing so, individuals can develop a greater sense of peace and a more balanced approach to the complexities of life.
Selfish Writing and Personal Growth
The speaker shares their perspective on writing and its impact on personal growth. They describe their approach as 'selfish writing,' explaining that they write primarily for their own introspection and curiosity. By addressing the questions they have about themselves, they hope to provide insights and provoke introspection in others. Through this process, the speaker aims to encourage readers to become more introspective, answer their own questions, and develop a greater sense of equanimity in the face of the unknown.
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Morgan Housel (@morganhousel) is a partner at The Collaborative Fund. His book The Psychology of Money has sold more than three million copies and has been translated into 53 languages.
He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers and winner of the New York Times Sidney Award. In 2022, MarketWatch named him one of the 50 most influential people in markets. He serves on the board of directors at Markel.
Morgan’s new book is Same As Ever: A Guide to What Never Changes. You can find my first, widely popular interview with Morgan at tim.blog/morganhousel.
Please enjoy!
This episode is brought to you by Cometeer! Cometeer is hyper-fresh, expertly brewed, flash-frozen coffee that produces an incredibly delicious cup. Cometeer lets you prepare your coffee with no mess, no machines, no burning, and no bitterness. Cometeer sources high-quality beans from the country’s top roasters. The coffee is brewed using proprietary technology to pull out more flavor compounds and antioxidants. It’s then flash-frozen at minus 321 degrees Fahrenheit to lock in that incredible flavor and freshness of the specialty brew. Simply add hot water and you’ve got a game-changing cup of coffee. It’s easily customizable in seconds for iced coffees, lattes, espresso martinis, and more.
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[07:20] Buffett’s Snickers.
[12:21] What prompted Morgan to write Same As Ever?
[17:44] Morgan’s worst advice for aspiring writers is what works for him.
[21:48] The upsides of being rich and anonymous.
[26:35] Tips for raising unspoiled kids.
[33:19] Should families avoid passing along dynastic wealth?
[35:45] Finding worthy charities and causes.
[41:02] Money and happiness.
[48:37] Avalanches and other random, life-changing flukes.
[54:32] We can prepare for the future, but we can’t predict it.
[1:00:58] What current unknowns will seem shockingly obvious in a year?
[1:03:22] Which of our current views would change if our incentives were different?
[1:06:23] The most valuable personal finance asset.
[1:08:54] Optimizing the chance of marrying the right person.
[1:11:38] Mending divergence in a marriage or relationship.
[1:14:49] Trying to eliminate a hassle that’s an unavoidable cost of success.
[1:33:16] Guessing at the future of text vs. audio/video.
[1:37:41] Books vs. podcasts.
[1:46:56] Recommended reading.
[2:06:00] Has writing Same As Ever changed how Morgan operates in the world?
[2:07:39] Who is the intended audience for Same As Ever?
[2:09:47] Parting thoughts.
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For show notes and past guests on The Tim Ferriss Show, please visit tim.blog/podcast.
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Past guests on The Tim Ferriss Show include Jerry Seinfeld, Hugh Jackman, Dr. Jane Goodall, LeBron James, Kevin Hart, Doris Kearns Goodwin, Jamie Foxx, Matthew McConaughey, Esther Perel, Elizabeth Gilbert, Terry Crews, Sia, Yuval Noah Harari, Malcolm Gladwell, Madeleine Albright, Cheryl Strayed, Jim Collins, Mary Karr, Maria Popova, Sam Harris, Michael Phelps, Bob Iger, Edward Norton, Arnold Schwarzenegger, Neil Strauss, Ken Burns, Maria Sharapova, Marc Andreessen, Neil Gaiman, Neil de Grasse Tyson, Jocko Willink, Daniel Ek, Kelly Slater, Dr. Peter Attia, Seth Godin, Howard Marks, Dr. Brené Brown, Eric Schmidt, Michael Lewis, Joe Gebbia, Michael Pollan, Dr. Jordan Peterson, Vince Vaughn, Brian Koppelman, Ramit Sethi, Dax Shepard, Tony Robbins, Jim Dethmer, Dan Harris, Ray Dalio, Naval Ravikant, Vitalik Buterin, Elizabeth Lesser, Amanda Palmer, Katie Haun, Sir Richard Branson, Chuck Palahniuk, Arianna Huffington, Reid Hoffman, Bill Burr, Whitney Cummings, Rick Rubin, Dr. Vivek Murthy, Darren Aronofsky, Margaret Atwood, Mark Zuckerberg, Peter Thiel, Dr. Gabor Maté, Anne Lamott, Sarah Silverman, Dr. Andrew Huberman, and many more.
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