Young and Profiting (YAP) with Hala Taha

Morgan Housel: How to ACTUALLY Build Wealth, Investing to Gain Financial Independence | E266

Jan 8, 2024

Morgan Housel, financial columnist, shares his secrets to staying rich and the common emotional pitfalls related to money. He discusses why finance is more like psychology than physics and emphasizes the importance of managing expectations and finding happiness in non-material possessions. The chapter also touches on Warren Buffett's wealth accumulation through continuous investing over time.

01:11:15

Episode guests

Morgan Housel

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Episode notes

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Quick takeaways

Being smart about money is more about behavior than intelligence, focusing on good financial habits and resisting social comparisons can lead to wealth accumulation.

Financial independence should be the main purpose of wealth accumulation, enabling individuals to gain control over their time and prioritize personal fulfillment.

Patience is crucial in both personal finance and investing, with a balance needed between risk-taking strategies for growth and conservative approaches for risk management.

Deep dives

The Importance of Behavioral Finance in Money and Investing

Understanding the psychology and behavior surrounding money and investing is crucial for financial success. The speaker highlights that being smart about money is more about behavior than intelligence. Even without a formal finance education, one can accumulate wealth by exhibiting good financial habits, such as patience, control over greed and fear, and the ability to resist social comparisons. The talk emphasizes the significance of incentives, the danger of FOMO (fear of missing out), and the challenge of accurately predicting risks. The idea is to save money like a pessimist, focusing on financial independence, while investing it like an optimist, taking calculated risks for long-term growth.

Introduction

2min

Exploring the Psychology of Money and Investing

5min

Decisions that Saved Lives

13min

Various Revenue Streams and the Definition of Wealth

7min

Approaching Finance with a Psychological Perspective

16min

Benefits of HelloFresh and Introduction to Green Chef

6min

Building Wealth Over Time

24min

The Importance of Cross-Training and Introduction to Articulate 360

2min

Morgan Housel made his first investment when he was 18, putting $1,000 into a certificate of deposit at his local bank. When he started to make some interest on that investment, he was hooked. He devoured books on finance and economics, eventually becoming a financial columnist for The Motley Fool and The Wall Street Journal. In today’s episode, Morgan shares why he thinks finance is more like psychology than physics, some of the common emotional pitfalls related to money, his secrets to staying rich, and much more.

Morgan Housel is a partner at The Collaborative Fund. He's the author of the best-selling book The Psychology of Money. 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. His latest book is Same As Ever: A Guide to What Never Changes.

In this episode, Hala and Morgan will discuss:

- Serendipitously finding a job he loves

- The skiing accident that changed his life

- What he learned from James Clear and Atomic Habits

- How behavior can trump smarts

- Why finance is more like psychology than physics

- Independence and the purpose of wealth

- Common emotional pitfalls related to money

- Secrets to staying rich

- What Bill Gates can teach you about optimism

- Which unappreciated trait of Warren Buffet we should emulate

- How stress can be a good thing

- And other topics…

Morgan Housel is a partner at The Collaborative Fund. He's the author of the best-selling book The Psychology of Money. 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. His latest book is Same As Ever: A Guide to What Never Changes.

Resources Mentioned:

Morgan’s Website: https://www.morganhousel.com/

Morgan’s LinkedIn: https://www.linkedin.com/in/morgan-housel-5b473821/

Morgan’s Instagram: https://www.instagram.com/morganhousel/

Morgan’s Twitter: https://twitter.com/morganhousel

Morgan’s Podcast: https://podcasts.apple.com/us/podcast/the-morgan-housel-podcast/id1675310669

Morgan’s Book, Same as Ever (2023): https://www.amazon.com/Same-Ever-Guide-Never-Changes/dp/0593332709/

Morgan’s Book, The Psychology of Money (2020):https://www.amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681

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