My First Million

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The Investment Strategy To Build Generational Wealth (ft. Morgan Housel)

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Dec 20, 2023

Guest

Morgan Housel

Morgan Housel, acclaimed author of 'The Psychology of Money,' discusses the importance of sustainable financial strategies over rapid gains. He emphasizes 'strategic mediocrity' as a pathway to long-term wealth, blending personal fulfillment with financial goals. The conversation delves into the psychological traps of money management, contrasting the balance of saving and spending through anecdotes, including insights into Warren Buffett's philosophy. Housel also explores the implications of declining birth rates on economic growth, underscoring timeless human behaviors in finance.

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ADVICE

Strategic Mediocrity

Strive for average returns over an above-average time period.
This strategy offers endurance and maximizes the benefits of compounding.

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ANECDOTE

Buffett's Compounding

Warren Buffett accumulated most of his wealth after turning 65.
His success highlights the power of long-term compounding.

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ANECDOTE

Buffett's Code

Warren Buffett prioritized compounding over helping his daughter with home improvements.
This anecdote illustrates his strict adherence to his financial principles.

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The Power of Moderation in Success

02:32 • 4min

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The Balance of Wealth Building and Enjoying Life

06:45 • 6min

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Wealth, Happiness, and Personal Growth

12:40 • 13min

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Shifts in Economic Growth and the Art of Copywriting

25:55 • 1min

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Economic Growth and Declining Birth Rates

27:14 • 9min

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Exploring Emotions and Politics Through War Literature

Die with Zero presents a provocative philosophy and practical guide on how to get the most out of your money and your life. Bill Perkins argues against over-saving and under-living, advocating for investing in experiences early and maximizing positive life experiences. The book introduces concepts like 'time-bucketing,' 'net worth curve,' and 'fulfillment curve' to help readers optimize their life stages and make the most of their resources. Drawing from his own life experiences and insights from psychological science and behavioral finance, Perkins makes a compelling case for living large and accumulating memorable experiences rather than wealth.

The Psychology of Money

Timeless Lessons on Wealth, Greed, and Happiness

Morgan Housel

In 'The Psychology of Money,' Morgan Housel delves into the psychological and emotional aspects of financial decisions. The book consists of 19 short stories that illustrate how personal history, worldview, emotions, and biases influence financial outcomes. Housel emphasizes the importance of behavior over knowledge in managing money, highlighting the power of compounding, the dangers of greed, and the pursuit of happiness beyond mere wealth accumulation. He advocates for a frugal lifestyle, long-term perspective, and a balanced approach to investing, stressing that financial success is more about mindset and discipline than about technical financial knowledge.

No Ordinary Time

Franklin and Eleanor Roosevelt, The Home Front in World War II

Doris Kearns Goodwin

Edward Herrmann

This book masterfully weaves together the story lines of Eleanor and Franklin’s marriage, Eleanor’s life as First Lady, and FDR’s White House, highlighting their impact on America and the world during World War II. It provides an intimate portrait of the Roosevelts and the era in which a new, modern America was born. The book also explores their remarkable partnership, FDR’s political tactics, and the significant social and political changes they championed, including New Deal programs and steps toward racial equality.

The Splendid and the Vile

A Saga of Churchill, Family, and Defiance During the Blitz

Erik Larson

The book chronicles the period from May 1940 to May 1941, highlighting Churchill's leadership during the Battle of Britain and the Blitz. It draws on diaries, archival documents, and once-secret intelligence reports to provide a vivid portrayal of Churchill's family, including his wife Clementine, their children, and his close advisers. The narrative delves into the personal and political challenges faced by Churchill as he navigated the critical early months of World War II, emphasizing his eloquence, courage, and perseverance in the face of unrelenting horror.

Episode 533: Shaan Puri (https://twitter.com/ShaanVP) and Sam Parr (https://twitter.com/theSamParr) talk to Morgan Housel about the psychology of building generational wealth and the one strategy that works better than any 20% return.

No more small boy spreadsheets, build your business on the free HubSpot CRM: https://mfmpod.link/hrd

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Show Notes:

(0:00) Intro

(2:30) Strive for averageness

(12:00) Financial anti-goals

(14:30) Sam and Morgan argue about money and anxiety

(17:30) Biggest psychological trap with money

(22:00) The biggest risk no one is talking about

(26:00) Worry about what doesn't change

(29:00) How to action sameness

(32:00) Morgan's history book diet