The Psychology of Money

with our guest: Morgan Housel
Overview

Morgan Housel is a Partner at the Collaborative Fund and author of The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness. He is a former columnist for The Motley Fool and The Wall Street Journal and has received several accolades, including the New York Times Sidney Award. In addition to his authorship, Morgan has presented at over 100 conferences in different countries, using storytelling to explore behavioral finance and history, how investors deal with risk, and how we can think about risk in a more productive way.

Morgan joins me today to explore the highest form of wealth and the psychology that drives how we spend our money. He defines what a savings rate means and explains how one can build wealth without having a high income. He differentiates making reasonable financial decisions from making rational ones and describes our emotional relationship with money. He also illustrates the economic and social dynamics that occur underneath challenging events in the United States and reveals some surprising facts about money and financial trends in the country.

“Your savings rate is the gap between your income and your ego: how much you’re making and how much you’re able to suppress your desire to impress other people.” – Morgan Housel

Show Notes

This week on The School for Good Living Podcast:


  • The “end of history” illusion and how the things we consider as meaningful change over time
  • The definition of savings rate and creating wealth by being mindful of the ego
  • The highest form of wealth and what the FIRE movement misses
  • How independence and freedom exist on a spectrum
  • The power of writing for yourself instead of writing for an audience
  • Underestimating the role of luck in life and the importance of introspecting about greed
  • How our economic and social standing in life affects our notions of money and spending habits
  • The psychology behind Americans’ massive spending on lottery tickets
  • Why people can’t be totally rational with their money and what it means to be reasonable with our finances
  • The secrets of Warren Buffet and the impact of time on investments and building wealth
  • How 2020 exacerbated the widening income inequality in the United States
  • The worst and best money decision Morgan and his wife ever made

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