The Art of Spending Money with Bestselling Author Morgan Housel

Summary

Masters in Business: “The Art of Spending Money” with Morgan Housel

Podcast: Masters in Business
Host: Barry Ritholtz (Bloomberg)
Guest: Morgan Housel (Bestselling Author)
Date: November 21, 2025

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Episode Overview

This episode features a deep, insightful conversation between Barry Ritholtz and Morgan Housel, celebrated author of The Psychology of Money, Same as Ever, and the newly-released The Art of Spending Money: Simple Choices for a Richer Life. The focus is on how we perceive wealth, behavioral aspects of money, the difference between earning and spending, and the psychology behind financial decisions.

Housel shares stories from his own life and research, delving into why money often fails to deliver happiness, how our upbringing and environment shape financial values, and the critical distinction between being rich and being truly wealthy. The episode is rich with anecdotes, memorable quotes, and practical insights into achieving contentment, not just affluence.

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Key Discussion Points & Insights

1. Morgan Housel’s Unlikely Path to Finance Writing

• Background: Housel planned to become an investment banker/hedge fund manager after studying economics at USC but rapidly realized finance culture wasn't for him.

  "Within 10 minutes of the first day [as an investment banking intern], I knew it was not for me." – Morgan Housel [04:01]

• Turned to writing, initially as a desperate stop-gap during the 2008 financial crisis, and joined The Motley Fool as a finance writer.

2. Early Encounters with Wealth and Happiness

• Growing up in middle-class Tahoe, Housel marshaled old pickups as the local status symbol; later as a valet in LA, he saw real wealth up close.
• Observed that money did not guarantee happiness—many wealthy clients were “old, bitter, broken men... always stressed, always barking on the phone.” [06:13]

  "...I remember picking up on that and being like, hey, on one hand I really want that. On the other hand, like, is that supposed to be my, my, my role model?" – Morgan Housel [07:02]

• The contrast with happier, middle-class people shaped his enduring interest in the psychology of money.

3. The Behavioral Side of Finance

• Housel realized finance was less about math and more about behavior:

  “…money and finance is not the study... of finance, it's a study of how people behave with money.” – Morgan Housel [11:02]

• Economic “uncertainty” is ever-present; perception shifts with ignorance about risks.
• Post-crisis narratives often extrapolate recent events; actual outcomes frequently diverge from consensus expectations.

4. Luck, Risk, and the Limits of Control

• Housel distinguishes skill from luck, pushing back on the notion that hard work alone brings fortune:

  “If you can go out of your way to increase it, it is not luck. Luck is... something fundamentally outside of your control.” – Morgan Housel [20:24]

• Examples: Bill Gross’s and Warren Buffett’s success tied in part to the era in which they were born and the opportunities available, not just individual brilliance.

5. The Power of Stories Over Numbers

• Valuations depend as much on narrative as on hard data:

  "Every market valuation is a number from today multiplied by a story about tomorrow." – Barry Ritholtz quoting Housel [15:56]

• In a social-media-charged, near-zero-rate world, stories and memes can overwhelm rational analysis for extended periods.

6. Writing Process—Storytelling and Behavioral Parallels

• Housel combines historical, evolutionary, and psychological stories to illuminate financial truths.

  “If you see a behavior repeat in several different fields, you found something that is like, infinitely important.” – Morgan Housel [29:20]

• Famous anecdotes: the solo sailor who leaves a race just to keep sailing for pleasure, the delayed recognition of the Wright brothers.

7. Getting Rich vs. Staying Rich

• Housel emphasizes these as two entirely different skills—risk-taking versus conservatism:

  “...to get rich you need optimism and risk taking. And to stay rich you need almost the exact opposite. You need a level of paranoia and conservatism...” – Morgan Housel [35:24]

• The cautionary tale of the Vanderbilts: fortunes squandered across generations due to lack of independence and meaning.

8. Money as a Tool—Freedom, Not Status

• Distinction between "rich" (high income, status seeking) and "wealthy" (command over time and independence).

  “Wealth, I would say, is having some level of independence... intellectual independence, you don't have to pander to other people...” – Morgan Housel [55:52]

9. The Psychology of Spending: The Book’s Core

• Very few books discuss “how to spend”—a subjective, psychological process, not a science:

  “...there are literally tens of thousands of books written about how to grow wealth, virtually none written about what to do with it.” – Morgan Housel [50:33]

• Best spending supports independence, experiences, relationships, and contentment; status-seeking purchases rarely fulfill.

10. On Happiness, Contentment, and the Lottery Dream

• Pursuit of happiness is fleeting; contentment is a more sustainable, achievable goal.

  “...when you daydream about the new house, the new car, the boat, what you are imagining is being content with those things...” – Morgan Housel [66:05]

• Realizing that almost no one actually cares about your material possessions is liberating.

11. Spotlight Bias & Social Comparison

• Most bad financial decisions are driven by status-seeking and overestimating others’ attention to our choices.

  “In your 40s you finally realize... nobody was thinking about you all along.” – Morgan Housel (quoting Jimmy Carr) [58:09]

12. Wealth as Hidden, Not Seen

• Wealth is everything you don’t buy; onlookers can't see your real net worth—just consumption.

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Notable Quotes & Memorable Moments

• On Wealth and Happiness:

  “Wealthier people might have fewer bad days than poor people. I don't know if they necessarily have more good days.” – Morgan Housel [08:20]

• On Luck and Risk:

  “You can't believe in risk without also believing in luck, because they're fundamentally the same thing.” – Morgan Housel [20:24]

• On Narratives in Markets:

  "It's always a number from today multiplied by a story about tomorrow." – Morgan Housel [16:10]

• On Independence:

  “All I want out of money is to be independent. I just want to be able to wake up every day and say I can do whatever I want today.” – Morgan Housel [61:16]

• On Social Comparison:

  “Nothing is more infuriating than seeing your idiot brother-in-law get rich.” – JP Morgan, cited by Ritholtz [52:32]

• On the Obituary Exercise:

  “Write down what you want your obituary to say... automatically it pushes people to realizing what they actually want out of life...” – Morgan Housel [41:40]

• On the Value of Reading:

  "Read as much as you possibly can... from the diverse field of topics that you can." – Morgan Housel [80:52]

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Timestamps for Major Segments

• [03:14] Housel’s path from USC to finance writer
• [05:33] Early lessons from valet parking for the wealthy
• [09:06] Shift to behavioral finance & post-crisis narratives
• [11:46] Learning from crises: 2008, World War II, and “double dip” fears
• [15:56] The power of narrative in market valuations
• [18:40] The myth of economic “uncertainty”
• [20:24] Luck vs. skill in life and markets
• [29:20] Storytelling and writing process
• [34:14] “Getting rich” vs. “staying rich”
• [38:16] Chuck Feeney and purposeful frugality
• [41:40] The "reverse obituary" exercise
• [50:33] Why write a book on spending instead of earning
• [55:52] Riches vs. wealth: freedom or status?
• [58:09] The spotlight effect & status-seeking spending
• [66:05] Contentment vs. happiness
• [79:05] What Housel is reading & recommends
• [80:52] Career advice for aspiring finance writers

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Tone & Takeaways

Barry Ritholtz and Morgan Housel mix sharp insights with humor and self-deprecation, making the episode rich, relatable, and practical. Housel’s core message: money’s greatest value lies in the autonomy and contentment it can offer, not in impressing others or chasing unattainable happiness. Understanding your own desires—and being skeptical of conventional financial wisdom—is crucial to “the art of spending money.”

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Recommended for: Anyone interested in personal finance, behavioral economics, or seeking a healthier relationship with money and spending.

Transcript

[Hannah Fry]

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[Morgan Housel]

You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris.

[Hannah Fry]

And I'm Karen Moscow, here to tell you about our new On Demand Demand.

[Morgan Housel]

News report delivered right to your podcast feed.

[Hannah Fry]

Bloomberg News now is a short 5.

[Morgan Housel]

Minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes that can only be heard on Bloomberg News now and we don't wait an hour to publish breaking news.

[Hannah Fry]

When news breaks, we'll have an episode up in your podcast feed within minutes.

[Morgan Housel]

So you're always getting the latest stories and developments. Get the reporting and the context from Bloomberg's 3,000 journalists and analysts. We're all over the world. Listen to the latest from Bloomberg News now on Apple, Spotify or anywhere you listen. Bloomberg Audio Studios Podcasts Radio News.

[Barry Ritholtz]

This.

[Morgan Housel]

Is Masters in Business with Barry Ritholtz.

[Barry Ritholtz]

On Bloomberg Radio on the latest Masters in Business podcast. My Conversation with Morgan Housel I've known Morgan for, I don't know, 15 years and I've loved all of his writing and his books. The Psychology of Money is one of the best best sellers in all of personal finance. Coming up on 10 million copies sold. Amazing. Same as ever. Timeless stories about human nature. The new book the Art of Spending Money, Simple Choices for a Richer Life drops today. I thought this conversation is one of our best. Morgan is a deeply thoughtful person. Everything he says comes from both experience and academics. I love the way he puts stories together with lessons. I thought the conversation was fascinating and I think you will also. With no further ado my conversation with author Morgan Housel let's. For people who may not be familiar with you and your career, let's give them a little bit of background. You go to University of Southern California where you get a BA in economics. What was the career plan?

[Morgan Housel]

The plan all along was to be an investment banker or a hedge fund manager. The reason why, as every or very many young ambitious, young 20 something males, particularly in the mid 2000s, that was the thing to do. If you go back to the early mid 2000s, tech really wasn't that much of a thing yet. Of course it was around, but it didn't have the money, the prestige, the.

[Barry Ritholtz]

Growth that did, especially after the crash.

[Morgan Housel]

After the crash, finance was the thing. If you are young and ambitious and wanted to make a lot of money, you went to Wall street, you worked at Goldman Sachs, your investment banker. That's what I wanted to do. Plan A, B and C. Didn't want anything to. I got an investment banking internship in what would have been, I guess, my junior year. And it was like, this is it. This is the dream. Here we go. This is awesome. Within 10 minutes of the first day, I knew it was not for me. It took 10 minutes for me to be like, nope, nope, that's not gonna work. I'm.

[Barry Ritholtz]

That's hilarious.

[Morgan Housel]

I can do good work, but not under the hazing style pressure that was so prevalent in banks back then. And it's not that I didn't have the work ethic for it. It was just, it seemed like such a broken culture that I wanted nothing to do with it.

[Barry Ritholtz]

It's so funny you said that. I had the same experience as a first year associate and a summer associate in a law firm. And I'm like, oh, this is a horrible lifestyle. You're in your 20s. Why do I want to be spending every weekend in the law library? It was miserable.

[Morgan Housel]

Yeah. They had a quote on the first day of my investment banking internship and they said, the rule here is if you don't come to work on Saturday, don't bother coming back on Sunday. And I went, nope, nope.

[Barry Ritholtz]

What about Monday?

[Morgan Housel]

That's not for me. That's not. That's great.

[Barry Ritholtz]

So I don't have to work weekends. Fantastic. See you Monday. Right.

[Morgan Housel]

So then I. So I didn't know what to do. And I was really adrift and lost. And then I graduated in 2008. Financial crisis, world is in flames, nobody is hiring. And I stumbled haphazardly, not by any plan or strategy. Out of desperation, I took a job as a Finance writer at the Motley Fool.

[Barry Ritholtz]

So were you an analyst or a finance writer?

[Morgan Housel]

I was a writer from day one. I was still in college at the time and started covering banking stocks at the motley F in 2007 and. And I've been a writer ever since.

[Barry Ritholtz]

So I'm curious, talking about being a hedge fund manager or an investment banker. I know your early life. You were both a ski bum and a car valet.

[Morgan Housel]

Yeah.

[Barry Ritholtz]

Parking really expensive cars. Did that have any influence on your initial erroneous career choice?

[Morgan Housel]

It had so much influence really. I grew up in a middle class family, great town, but not, not a wealthy town, not, not, not poor, not out in the sticks, but a decidedly middle class town in California just outside of Lake Tahoe, California also before tech money infiltrated Lake Tahoe. So back then it was truly just a small little mountain town. It's not anymore because tech money came up.

[Barry Ritholtz]

Right.

[Morgan Housel]

But, and so I didn't have much concept of wealth because in the town that I grew up in, regular people had old pickup trucks and rich people had new pickup trucks. That was the stratification of wealth. That was as far as it got. And so, but anyway, I started working at these fancy hotels and all of a sudden people were starting to come in in these cars that just blew my mind. Not just BMWs and Mercedes, but Ferraris, Lamborghinis once in a while. And then I went to college in Los Angeles, stayed working as a valet at even nicer hotels in la. And then it was Rolls Royces and Aston Martin's and it was just a level of wealth that I didn't know existed. And in my young, you know, 19, 20 year old mind, it was just so appealing to me. I was just overwhelmed with like, whatever that is, I want it, I want some of that immediately. And, but it was also, I think I. Not on purpose, but I think I just kind of started picking up the little subtle clues of the psychology of rich people. The first thing that was very apparent was that a lot of them were not that happy. A lot of them were just kind of old, bitter, broken men arguing with their wives, second wives, third wives, always stressed, always barking on the phone. And it was all the time. It was all the time. And I remember picking up on that and being like, hey, on one hand I really want that. On the other hand, like, is that supposed to be my, my, my role model? Because it doesn't look that great. And I know a lot of middle class people from the town I grew up in who seem a hell of A lot happier than that guy. And so I think that was. I started picking up on kind of the psychology of wealth. Not intentionally, but it was a very good window into that aspect of wealth. Because in my little pea sized 19 year old brain, it was in my. What I assumed was you have so much money, you must just be a walking ball of happiness. That was, that was the intuition that I had, but it was so clearly not that.

[Barry Ritholtz]

So think about that for a second. And I have so much stuff from your new book that's relevant to this, but we'll get to that later. Think about when you're young and relatively broke. And I grew up lower middle class and put myself through college and grad school and always felt like, gee, if only I didn't have to worry about money, how much greater my life would be. But chasing away the lack of money blues, that's just a modest decrease in stress. Not the secret to happiness.

[Morgan Housel]

I think what it tends to be true. And there's no hard and fast rules here. This is not black and white, but it tends to be true that wealthier people might have fewer bad days than poor people. I don't know if they necessarily have more good days. That's a great way to frame. That is a lifestyle improvement. To have fewer bad days, to not have to worry and stress about making rent and healthcare and whatnot to remove, that is a lifestyle improvement. But it is not happiness. It is different in the same way that you and I are fortunate enough to wake up every morning not worrying about catching polio. Right? That's a lifestyle improvement.

[Barry Ritholtz]

Or what you're gonna eat that day.

[Morgan Housel]

Or exactly what will you eat that day? And relative to the standards of 100 years ago, that is an unbelievable lifestyle improvement. But it's not happiness because you and I didn't wake up this morning thinking about it.

[Barry Ritholtz]

That is simply Maslow's hierarchy of basic needs, right? That's different than happiness, than contentment, which we'll talk about. So let's stay with your writing at the Motley Fool. One of the things, two of the things that really distinguish your writing. First, you're a great storyteller and you find some fascinating stories. But second, you figured out early that finance is not so much about math as it is about behavior. Tell us how you stumbled into an interest in behavioral finance.

[Morgan Housel]

So much of this was Motley fool is a stock picking organization. And I'm not. I don't look down upon stock picking, but it's not what I do. It's not how I Invest. It's not what interests me at all. And so I kind of had to find a little niche for myself at the Motley Fool. They were completely, and they were completely supportive of my kind of black sheepishness being there, being like, hey, you know, everyone else is picking stocks and I'm just trying to do something else over here.

[Barry Ritholtz]

You're counter programming, right.

[Morgan Housel]

And so I had to figure out what to do for a while. It was macro. This was post post financial crisis. And I was like, I'm going to study the forces of the economy. And that not intentionally, but kind of just pushed into behavior and psychology. I think a lot of that was as I was studying macro, this realization. And you've been a big part of this as well, of realizing that there is nothing in a macro textbook that will explain 2008. And so as a writer, as I was trying to explain what just happened in the aftermath of the gfc, it was. There's nothing in there that explained why people did what they did. Nothing in an economics textbook or the academic framework that would explain the housing bubble that preceded it, the behavior during the crash, the pessimism after it. Like, not much there, but if you looked at it through the lens of psychology or sociology or political science or evolution, all these other fields, like, had a lot to say and could explain why people were doing the things they do. So that was just the subtle coming to terms with the idea that money and finance is not the study, it's not the study of finance, it's a study of how people behave with money.

[Barry Ritholtz]

So I'm pulling forward a quote from later in our conversation that's dead on with that insight. Risk has two stages. First, one, it actually hits then when the scars influence our subsequent decisions. So you graduate into the 0809 disaster. Everybody post financial crisis, and I shouldn't say everybody, but so many people post financial crisis was, hey, that was just the first leg after March 09. Wait, wait for the second leg.

[Morgan Housel]

Another phrase, double dip recession.

[Barry Ritholtz]

That's right.

[Morgan Housel]

Everybody said it 14 times a day. Was decades before every. If you go back to 2010, particularly 2011, everybody in the financial media said the phrase double dip recession every hour. It was, it was, it was inevitable. It was absolutely inevitable. The other version of this is at the end of World War II, 1945, it was a foregone conclusion that nobody disagreed with, that the US economy would fall right back into the Great Depression, that that in the absence of military spending, it was not just going to contract and revert to the mean, it was going to go back to the 1932 lows of desperation. And in hindsight, it didn't happen, but it was a foregone conclusion back then. It is always the case that the simple narrative, and oftentimes a simple narrative, is just extrapolating whatever just happened is gonna be the most appealing, the most logical, it makes the most sense in the cyclical nature of economies. Though, like we all know in hindsight what happened during those periods that actually the end of World War II, there were some mild recessions in the late 40s and 50s, but by and large that was actually the beginning of an epic boom in the 50s and 60s. And after the GFC 2009, 2010, that was in the stock market and economically the beginning of a boom. And it's almost impossible to realize that in real time, as it was almost impossible to realize in 99, 2000. That of course in tech stocks, but also in the broader economy, that was about as good as it gets. And when it's about as good as it gets, that was, it was so easy to extrapolate from there. But that was actually the end of the good days.

[Barry Ritholtz]

You know, the shocking thing about the post financial crisis period, and I'll take a little credit for floating this phrase out there, it was the most hated bull market in history. By like October 09, people were talking about, wait for the next 30, 40% dip. And you mentioned hindsight. Our hindsight bias keeps us looking backwards and ignoring the fact that hey, when is a down 50% market in the US not a great entry point? All right, 1929. But that is the exception to the rule. Every other time it's been down, cut in half. I'm a buyer, right?

[Morgan Housel]

And actually if you go back to, you know, 1931, 32, when the market was down 50%, it eventually fell 89%. So if it was down 50%, you still lost a fortune after that.

[Barry Ritholtz]

That's right.

[Morgan Housel]

But if you made Those purchases down 10 years later, you are doing an absolutely incredible. Now that was, that's cold comfort for the, the other 50% that you continue to lose by 1932. But there's all these cases where people say they're long term investors and they want to be long term investors, but then particularly when they're trying to buy the dip, if the market falls for another 90 days after that, they feel like they've made a colossal error.

[Barry Ritholtz]

So I find there's a huge difference. Many people are intellectually long term investors, but emotionally they're Not. And that tension is what drives a lot of that.

[Morgan Housel]

See, I would put a different spin on that. I would say a lot of people, you know, claim to be kind of short term investors in the sense that on Twitter they're like, oh, this, this is, this is the peak, this is the, the economy in Q4 is not looking. They say things like that. But if you actually looked how they invest, like, and they dollar cost average into their 401ks and never sell anything.

[Barry Ritholtz]

And that's the right approach. Market crash. In fact, you never pick a point as the bottom. Even if you put a big chunk of your free capital, you should always be, hey, I don't know where the bottom is. I'll try a little in 1930 and a little more throughout 31 and 32. Eventually your average is going to be far lower than where the market is. But you have to have a steady source of capital and some income.

[Morgan Housel]

No, I remember in 2011 when there was the double dip recession and the market did fall, I don't know, 20 or 30%, that was probably more pessimistic in 2011 than people were in 2009, 2011, people were like, this is it, this is over.

[Barry Ritholtz]

Going back down to.

[Morgan Housel]

And the market was plunging. And the narrative was everyone's panicking, everyone's selling. Vanguard put out a study that showed during that era, 99% of their clients did nothing. Didn't sell or what, didn't do any, didn't do anything. And so the narrative of everyone's panic, everyone's selling is usually so completely different from what people are actually doing.

[Barry Ritholtz]

So let me share one of my favorite quotes of yours since you're. You're talking about highs and lows. Every market valuation is a number from today multiplied by a story about tomorrow. I think that's genius. I love that quote.

[Morgan Housel]

Thank you. You know, it's always a number from today, like earnings per share multiplied by a story about tomorrow, like a valuation multiple. And what's important is, particularly in a low interest rate environment and particularly in a, in a zurp environment, those stories are everything. The number from today almost doesn't matter. The stories are everything. That's always been the case. But in a social media world, the stories get bonkers. The stories get absolutely nuts.

[Barry Ritholtz]

Narratives become memes.

[Morgan Housel]

Yeah. You know, Ben Graham had the quote in the stock market is a voting machine. Or no, maybe it was Keynes voting machine in the short term and a weighing machine in the long run. But he said that 100 years ago and it's still True, but there, because of how the world works today, stocks can remain voted on, not necessarily weighed, for probably decades. Tesla has been a voted upon stock, not a weighed upon stock for its entire existence. And maybe that will change someday. But I think in previous eras, in the Ben Graham era, or Even not even 20 or 30 years ago, you could have brief, momentary flashes of insanity. And that was probably the late 90s. You had 18 months of just pure insanity where everything was narrative driven, it wasn't really earnings driven. And now you can have that going on for very long periods of time. I mean, how long has Hertz and Gamestop been meme stocks? Like years is still active. I think it's still a thing.

[Barry Ritholtz]

Still a Reddit.

[Morgan Housel]

It's still a thing. It's still a thing. Maybe not to the extent that it was, but these stocks did not revert all the way back. They still have this cult meme following. And so the point being, it's always a number from today multiplied by a story about tomorrow. But because the world we live in, interest rates and social media, the stories get insane.

[Barry Ritholtz]

So let me mix your Keynes quote with your own quote. In the short run, markets are probability machines. In the long run, they're narrative machines. That's a good blend of you and Keynes. There are worse people to marry. All right, one or two more questions in this segment before we move on. You address one of my favorite pet peeves about uncertainty in a sentence that I love. Quote, there's rarely more or less economic uncertainty, just changes in how ignorant people are to potential risks. That sums it up perfectly. I hate the uncertainty meme, because by definition, the future is always inherently uncertain.

[Morgan Housel]

Yeah, I mean, there have been some academics who have tried to make uncertainty indexes where they make it, and you can put it on a chart to measure the amount of uncertainty. And there's various ways that they do it in terms of like newspaper narratives and changes in economic policy and to map out uncertainty. And what's so fascinating to me is if you look at these indexes, which I think are pretty rationally put together, it shows that uncertainty is the lowest, as in certainty was the highest at two periods in modern times, I guess three periods. One is right before 9 11, the other is right before the GFC, and the other is right before COVID That was when purportedly we understood the future in the greatest degree.

[Barry Ritholtz]

And if you go back in time, which is completely insane, I'm going to tell you there was a lot of certainty in late 99. Yeah, stocks grow to the sky and you go back to March 09, there was certainty that stocks were going to zero.

[Morgan Housel]

And so what we know in hindsight is that those three periods just before 9, 11, just before 2008, and just before COVID were the most uncertain. That was when your view of the future was completely and utterly wrong, no matter who you were or how smart you were. And so I think it's true that there is never more or less uncertainty. It's just we go through periods where we are more ignorant and more confident in our ability to forecast than others.

[Barry Ritholtz]

Let's talk about luck. I just wrote something about this and found a quote of yours afterwards that I would have loved to use. Most people when they talk about luck increasing the surface area of your lock. Luck is where preparation meets opportunity. Your definition of luck recognizes that it's something fundamentally outside of your control. Quote, you can't believe in risk without also believing in luck, because they're fundamentally the same thing. An acknowledgement that so much is outside of your control.

[Morgan Housel]

Yeah. When people say, like, oh, the harder I work, the luckier I get, you know, those kind of. They seem like, like, benign quotes. I'm like, no, that's not what luck is. If you can go out of your way to increase it, it is not luck. It's hard work.

[Barry Ritholtz]

It' hard work. It's skill.

[Morgan Housel]

Right. It's a value. I commend you for it. But it's not luck. Luck is you were born in this era. Luck is your parents told you X, Y and Z. Luck is you haphazardly met this person. You did not do anything intentionally to do it. It was completely outside of your control. The biggest of which is where and when you were born. That have an unbelievable impact on this. Bill Groats, a great bond manager, I'm sure he's been on this show before. He spoke about this one time that he was a bond manager from the early the bulk of his career during the largest decline in interest rates that's ever occurred. And he wondered himself in this piece that he wrote many years ago of like, would he have had the success he did if he was born 10 years earlier or 10 years later? Would Buffet have had the same success if he was born 10 years earlier or 10 years later? I would venture to say the answer is no. Are both of those people very hardworking, very intelligent, able to capture opportunity? Yes. Were they also unbelievably lucky in something they had no control over, which is when they were born? Yes. As well.

[Barry Ritholtz]

I'm trying to remember the Book that mentioned it's not a coincidence that so many of the best known entrepreneurs of our era were born post war, World War II, mid-50s, Steve Jobs, Bill Gates, it goes through a whole list. And just being born into that vacuum when there was massive societal change, economic change, technological change, that's what created the option of starting a whole new company in a brand new space.

[Morgan Housel]

Yeah. And if Steve jobs was born 20 years later, he still would have been extremely successful. He was just built different, of course, but to the degree that he was almost certainly not. So I think rather than luck, because people don't like that phrase, it makes you sound jealous and bitter of other people. I think the phrase to use is what is repeatable. What have you done in the past that you can do again? And if, if you know what in your life, in your, in your world, if you started over tomorrow with no money, no neighbor recognition, no context, could you repeat what you've done? And sometimes the answer is yes. So that's not luck.

[Barry Ritholtz]

I'm going to say no. For me personally, it's no. I think right place, right time and got. I literally just finished a chapter for someone else's book on how random so much of the world is. And I have to tell you, the first couple of times a billionaire tells you how important luck was, you kind of shrug it off as, hey, these guys are little false humility. The person who disabused me of that notion was Howard Marks. Cause he said you have to be smart, you have to be hardworking, but you also have to get lucky. And I'm like, come on, Howard, why do you say that? Look at what you've done since you graduated Columbia Business School. And his answer was, everybody I went to school with was super smart. They were all incredibly hardworking. Not all of them became wildly successful. And you have to just acknowledge how much of this is just serendipity. And when a guy like that, who has no false humility when he says no, I could give you 10 instances where my life changed because of dumb luck. You kind of have to acknowledge that.

[Hannah Fry]

Right.

[Morgan Housel]

That was what Jay Paul Getty said. He said the three successes, the three rules for getting rich are go to work early, stay late and strike oil.

[Barry Ritholtz]

Fantastic. Coming up, we continue our conversation with Morgan Housel author of the best selling book Psychology of Money, discussing how he writes books, essays and columns. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

[Hannah Fry]

As our use of AI expands, how do we make sure it doesn't end up breaking the Internet. I'm Hannah Fry, host of the Exponential Era, a series that explores the real world impact of future network technology. And I sat down with two experts to discover how we can support the massive connectivity needs of AI. Find out what I learned at Bloomberg.com Nokia Autotrader is powered by Auto Intelligence, the hyper personalized way to buy a car. Autotrader's tools sync with your exact budget and preferences to tailor the car shopping experience totally to you. Budgeting lets you input your info to see listings in your price range. Search and inventory helps zero in on your dream car. You can choose from new or pre owned, the style of the car and the features like engine size, color, all the way down to whether you want a trailer hitch. Go ahead and get picky. Don't worry about scrolling endlessly. Autotrader Powered by Auto Intelligence only shows you vehicles based on what you can afford and what you want and pricing shows you which listings are the best deal so you can feel like you're winning the negotiation without negotiating. You can even choose how to close the deal online at the dealership, or a little of both. Autotrader Powered by Auto Intelligence makes the process of buying a car less of a process. Try it today. Visit autotrader.com to find your perfect ride.

[Morgan Housel]

Hello, I'm Joel Weber.

[Barry Ritholtz]

And I'm Eric Balciunas. We're the hosts of the Trillions podcast.

[Morgan Housel]

From Bloomberg, a deep dive into all things ETFs and investing.

[Barry Ritholtz]

Eric, what's so amazing about ETFs? It's never a dull moment.

[Morgan Housel]

They track everything under the sun.

[Barry Ritholtz]

Four new ETFs launch a day and.

[Morgan Housel]

They take in $4 billion every day.

[Barry Ritholtz]

So it's where all the money's flowing.

[Morgan Housel]

To and a lot of the innovation is happening. I call it the Silicon Valley of the investing world.

[Barry Ritholtz]

As you can hear, Eric's passionate about them.

[Morgan Housel]

My role is to try and keep.

[Barry Ritholtz]

Him in check and make all of.

[Morgan Housel]

This a little bit more understandable for the rest of us. Not always easy, but always worth a listen. So listen to Trillions on Apple, Spotify, wherever else you get your podcast.

[Barry Ritholtz]

I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest is Morgan Housel. He is the best selling author of Psychology of Money as well as Same as Ever, his latest book, the Art of Spending Money. Simple Choices for a Richer Life. Before we get to the book specifically, I want to talk a little bit about about your writing process and you know, some of My favorite essays of yours. Take historical stories, world wars, business failures, unlikely successes, and I specifically recall Kitty Hawk's story and the solo sale competition around the world. And you connect them to timeless lessons on behavior and money. Tell us a little bit about your research process. How do you find these amazing and crazy stories?

[Morgan Housel]

I think it started with a survival technique as a writer, because as a finance writer, if I got up every day and wrote, here's what the Dow did, today you're out. There's people who can do that faster than you. You're not really adding much value if you do that. And so as a writer, it was like, hey, if I need to get people's attention, I need to make it interesting. And so. And one of the ways to do that, because myself as a reader, what I enjoyed when other people did is when they tied the rest of the broader world into finance. Here's a story that has nothing to do with money. It's a story about evolution or World War II, whatever it might be. And let's take the lesson from that and tie it. I loved when people did that. I loved it, loved it, loved it, and wanted to do it myself. The second part is, I think it got you closer to the truth that when you study those fields, whatever it might be, politics or military history, you're studying behavior. And it's the same behaviors that impact investors in the same way. And so a lot of even finance professionals get into trouble when they view and study finance through the very narrow lens of finance without realizing that it's a very broad field of how people behave. So that was the first of it. The second is when you start looking for it, when you have the little seed in your head that when you're reading about a broad array of fields, if you have a little bird in your head that says, how does this tie back? Like, what is the behavior and how can tie it back to money? You see it everywhere. You can't stop seeing it. And you realize, like, how interconnected our behavior is. Because the same way that you and I think about risk and investing also impacts a lot of things that we think in life. Our friendships, our relationships, our health tie back to the same framework of how we think about risk in money. It's very tied together. The whole world is kind of woven together in those. And so you start seeing these same themes over and over and over again about how compounding works, how risk works, how envy works. It's the same. And I also think if you see a behavior repeat in several different fields, you found something that is like, infinitely important. And then you can be like, oh, that's a, That's a good one. I need to talk more about that.

[Barry Ritholtz]

In finance, how often when you're doing research, you have that WTF moment that's like, oh, my God, how can this possibly be true? And you research it and it's like, wow, not only is this true, but it applies to so, so many other things. Is that a monthly occurrence, A weekly occurrence? How often does that happen?

[Morgan Housel]

I think it's very often that you find behaviors that also have, have, have a Venn diagram overlap with. With money. That's pretty often in terms of them being like a slam dunk. Like, oh, that is just a phenomenal, interesting story. And it is so identical to what happens in investing. That's probably a once a year kind of thing.

[Barry Ritholtz]

Oh, really?

[Morgan Housel]

I think so. That's a really slam dunk in psychology and money.

[Barry Ritholtz]

You have a bunch of those, and same as ever, you have a run of those. There's a lot of that in this. You're less than 50 years old. You have more than 50 of these stories.

[Morgan Housel]

Some better than others, though. There's a couple, there's a couple that I've come across over the years where I remember just sitting back in my chair and being like, that's just a jackpot. That story is just. Could not be better. And you find it in these areas that have nothing to do with my. I remember. So you, you mentioned in the Art of Spending Money, the story about the sailors.

[Barry Ritholtz]

Yes.

[Morgan Housel]

Has absolutely nothing to do with money whatsoever. And I remember reading.

[Barry Ritholtz]

And everything to do with ego and behavior.

[Morgan Housel]

Ego and behavior. But I remember reading an old New York Times article. It was from. Not that old, maybe 2007. And it had one line. It said there was a sailing race back in the 1960s and one of the sailors was about to win but decided he liked sailing, so he quit the race and just kept sailing.

[Barry Ritholtz]

And I remember didn't want the publicity and all the publicity nonsense around it.

[Morgan Housel]

The opposite of ego. And I remember reading that and being like, that's interesting. Like, can we pull on that thread a little bit more? And you start doing research and you're like, oh, this is ego or the lack of it. And of course that applies to money in what I thought was just a slam dunk way. Like, that's a rare story finding.

[Barry Ritholtz]

You know, pull on that thread. People don't understand. The original quote from the professor who said it was the plural of anecdote is data.

[Morgan Housel]

Yeah.

[Barry Ritholtz]

And what was meant by that is you start pulling on the thread of these one offs and you find these broader things applicable to other things. You shouldn't just dismiss a one off because it's anecdotal. Really, really kind of fascinating. So the other one that has always stayed with me involved. Kitty Hawk.

[Morgan Housel]

Yeah.

[Barry Ritholtz]

How long was it before the first Wright brothers faster, heavier than air flight made it into the New York Times?

[Morgan Housel]

It took them about four years to build the airplane. And then after they flew it in Kitty Hawk, it took them about another four years before virtually anybody was paying attention. And there were years after the Wright brothers first flight. We all have seen the picture, one of the most famous pictures of all time. Now, it was literally years after that took place that the New York Times was writing things along the lines of, humans will never fly, it will never happen.

[Barry Ritholtz]

It's already happened, and they're saying the wrong thing.

[Morgan Housel]

And there was even periods back in Dayton, Ohio, where they were from after Kitty Hawk. They went back to Dayton, and Dayton is where they truly mastered flying. They figured out the two hardest parts, which were turning and landing. And Dayton was a big city in the early 1900s, and they're flying over people's backyards, and there's virtually nothing written about it. There was in one of their biographies. It basically says the people in Dayton that saw them flying assumed it must have been some sort of magic trick, asking like, where's the rope? Kind of, kind of thing, like, what's.

[Barry Ritholtz]

The rope attached to?

[Morgan Housel]

Exactly, Exactly.

[Barry Ritholtz]

Well, it's, it's, you know, it's all turtles all the way down.

[Morgan Housel]

But it was the, the analogy that was given in their biography by David McCullough was if you and I saw a demonstration of time travel today, we would be like, okay, but it's just an illusion. Like, you didn't actually do that. Like, I saw what you did. But that's, but there, there's a trick here. And that's how they viewed flying at the time. And it really took almost about half a decade before people were like, oh, this is the thing. This is, this is big. I think that's true for a lot of new technology. That the gap between discovering it and it becoming a world changing thing can be years, if not decades. It's almost never that it happens overnight that we come up with a new technology and people are like, that's it. That's the thing. People talk about how quickly ChatGPT was, was, was brought into the fold. You know, within a year of it coming out there were hundreds of millions of users. But AI has been a thing for 30 years, 40 years. So the idea that like, oh, we recognized it immediately, like, no, it took a lifetime to get there.

[Barry Ritholtz]

You know, I saw, I saw a Reddit map and I thought of you. It showed, here's how far you could travel 100 years ago from London. And it was a map of this is a day, this is a week, this is a month. And then modern times, you could get anywhere on Earth today within 36 hours. The polls, whatever. But back then, you couldn't even get to America in a month from London. It's just insane how that changed. And that's what made me think of Kitty Hawk. There's another quote of yours I love that's related to all of your books, which is getting rich and staying rich are different things that require different skills. Explain that.

[Morgan Housel]

Well, we all know the stories of the hedge fund manager who was very good at getting rich and had no ability to stay rich whatsoever. There's a lot of stories about that.

[Barry Ritholtz]

Archer goes very recently, 20 billion to zero.

[Morgan Housel]

And the more famous example is Long Term Capital Management. Jesse Livermore, you can go on down the list of people who are unbelievably skilled at getting rich and completely brainless at staying rich. They're two very different skills. And when you see either a person or a company that has both equal skills of getting rich and staying, which, it's a rare thing. And some companies have this. Microsoft has had that. Apple, you know. No, no, I would take that. I'll take Apple back if they're there since 99, they went through a very rough period before that. Microsoft is probably the quintessential example of a country that a company that is or functionality unbelievable at getting rich and has an equal ability at staying rich in terms of how it manages its balance sheet and staying relevant and whatnot, it's a very rare skill and it's often a contradictory skill. Because to get rich you need optimism and risk taking. And to stay rich you need almost the exact opposite. You need a level of paranoia and conservatism to keep you around. You need that Jekyll and Hyde personality to do well over long periods of time.

[Barry Ritholtz]

The interesting thing about the examples we both gave Arch Ghost and Long Term Capital Management, they got rich through an excessive use of leverage. But in your book you talk about the Vanderbilts, which is kind of fascinating. They got wealthy through just wild business success, oil and railroads and go down the list. And yet once they had that money, all they could do is spend it at a profligate rate, derived seemingly no joy out of the process. And it took three or four generations and they were, the money was all gone pretty much.

[Morgan Housel]

You know, of all the robber barron families here in New York who manage the money, the Carnegie's and the Rockefellers did very well at using their huge wealth to better society and to make their heirs, to give them good lives and to keep it around for several generations. The Vanderbilts did by far the worst, by far and away the worst. So when Cornelius Vanderbilt died, adjusted for inflation, he had about 3 or $400 billion, just, you know, an unbelievable fortune, as you mentioned, within about three generations there's virtually nothing left. And in between those three generations were a series of heirs who by and large, with few exceptions, were miserable. Were miserable, miserable people. And the reason why, it was very clear when you study their biographies, the money completely controlled their personality. It told them who they could be. It told them where they could live. It told them the lifestyle they had to live. It told them who they could marry, it told them who they could be friends with. It had complete and utter control about it. They had all of the financial independence that anyone in history could ever imagine. And they had no intellectual independence, they had no lifestyle independence. They had, they were completely dictated by the money. And it wasn't until the money was more or less exhausted that the first Vanderbilt heirs who didn't get anything could build a life of their own. And this is now very well known. The first Vanderbilt heir who virtually didn't get anything is Anderson Cooper. His mom was, was, was Gloria Vanderbilt.

[Barry Ritholtz]

A designer who famously built her own fashion shop.

[Morgan Housel]

And that was, that was effectively where the big trust funds ended. And Cooper has talked about this, that you know, he was one of the first people in his family in 150 years who could, was like blessed with the ability to build his own life where the money didn't control it and dictate it. And it's an amazing thing to watch.

[Barry Ritholtz]

Are you the master of your wealth or is your, are you a slave to money? That's it really is the key question, you know, so you talked about the Rockefellers versus the Vanderbilts. I had the CIO of General Atlantic on and General Atlantic is the money that comes from the duty free shops which has blown up to be a spectacular fortune. The founder you discuss in the book spent most of his life giving away all his money and he couldn't be happier. Tell us about how him.

[Morgan Housel]

So the founder is a guy named Chuck Feeney, passed away A couple of years ago. Unbelievable story that he has started duty free store, made for him personal fortune about $10 billion, 20, 30 years ago. Yes, a lot of money. The well known part of Chuck Feeney's story that's been well documented is that he gave 99.99% of it away.

[Barry Ritholtz]

I think during his life, during his.

[Morgan Housel]

Life, not in his will, I think.

[Barry Ritholtz]

Handed it out regularly.

[Morgan Housel]

I think the statistic was he took out $2 million with an M to live off of, lives in a small apartment, flew coach, lived like a complete and utter ordinary person and gave $10 billion away. That's the well known part of it. The less well known part of his story that I think is actually more important is that if you go back to the 80s when he first made his fortune, he lived like a billionaire. He had mansions and yachts and a private jet and a private jet. Lived like the quintessential billionaire would and hated it. Ostensibly it was not for him. He has a quote that I love. He said, I realized that I was happy when I was giving money away and I was not happy when I was not giving money away. And so he chose, he. He rejected that and chose to live this very frugal life that he had. And what I love about that is not that he lived frugally like, you know, he was, he was, he was kind of obsessive about it in a way that I, I would not do.

[Barry Ritholtz]

I don't think you would fly front of the bus. You don't have to sit in the back.

[Morgan Housel]

Exactly.

[Barry Ritholtz]

You're giving away $10 billion.

[Morgan Housel]

Sure. But what I love about it is that he chose it. He did not, he did not give any, any care in the world what says how society told him to live. The money did not dictate his personality. He did it for himself. He was, he was a truly independent. Be more polar opposite than the Vanderbilts, who were absolutely beholden to what money and society told them that they should be.

[Barry Ritholtz]

Unbelievable. Another one of my favorite quotes of yours, a big takeaway from economic history, is that the past wasn't as good as you remember, the present isn't as bad as you think, and the future will be better than you anticipate. That's a fantastic quote because it's so true. We're stuck here in the moment. History is rosy nostalgia. The future is wishful thinking. Tell us how you put this, this quote together. How did you come together with this?

[Morgan Housel]

I think a lot about nostalgia. I'm a very nostalgic person. So I Think about it a lot in my own life. And it tends to be true that we massively overestimate how good the past was because we know how the story ends. Yes. And so when we look back at the 1990s, we say, what an amazing period of time. Because we know how everything played out.

[Barry Ritholtz]

It all worked out.

[Morgan Housel]

But in the 1990s, we didn't know that. That we can wax about how great the 1950s were. Middle class America, prosperity, mom and pop, white picket fences, that kind of thing. They didn't know it back then. What a lot of them were thinking about back then was nuclear holocaust and the recession that was seemingly right around the corner. And so when you know how the story ends, it makes it almost impossible to put yourself in the shoes of the past, including your own shoes of the past. Very difficult to do. So I think we just habitually overestimate how good, good the past was. We overestimate how bad the present is because we are just completely bombarded with negative headlines about what's going on today.

[Barry Ritholtz]

If it bleeds, it leads.

[Morgan Housel]

And then, and then extension of that is you extrapolate today into the indefinite future. And so we underestimate how good the future can be.

[Barry Ritholtz]

Really a fascinating quote, last writing process question. You discuss the reverse obituary exercise and how it can help help people clarify their priorities. Explain what a reverse obituary is.

[Morgan Housel]

It's this idea that it's kind of a grim exercise, but I think it's very useful. Write down what you want your obituary to say. What would be your dream obituary to say. And everyone would be different, but for me, and that's in that exercise, I would immediately go towards, Morgan was a good father, he was a good husband, he was a good citizen, he helped his town, he helped his friends. That's what I would want it to say. I think most people would be like, close to that.

[Barry Ritholtz]

Not Morgan's bought a really cool red Ferrari.

[Morgan Housel]

You automatically know what is not in there, which is your salary, the square footage of your house, the horsepower of your car. It would be completely absurd to put that. And you would automatically say what an absolutely hollow life it is. If that's what I could put in my obituary was how much money I made, how much money I saved. What a completely useless life. And so I think automatically it pushes people to realizing what they actually want out of life, what they actually aspire to. And I think the gap between what you are aspiring to today versus what you know, intuitively you want your obituary to say what you want to accomplish over the Long term can be huge. Maybe not for everybody. Maybe there's some people that truly are living the life of their reverse obituary. But I think it's a good exercise to really clarify what you want out of life.

[Barry Ritholtz]

I lied. That wasn't the last question. I have so many. You're leading me down so many paths. Starting with nothing's worse than getting what you want, but not what you need.

[Morgan Housel]

And there's a lot of that because ver, if you are fortunate enough to have a lot of money, earn a lot of money, save a lot of money, sometimes that's what you want. That's exactly what you wanted, that's what you set out to achieve and you got it. Congratulations. But very often it's not what you need. What you needed were relationships, health, mental clarity, a clear conscious. That's what you needed and that's what would actually feed your soul. And so I use the example in the book. You cited this earlier when we were hanging out. Among the top 10 richest men in the world, there are a cumulative 15 divorces. And so they have everything that they wanted in terms of money and lifestyle and possessions. And a lot of them, without passing too much judgment, at least at various times, did not have what they needed, what they absolutely needed. And you can imagine too that the 95 year old billionaire who's in very poor health, everything he wants, not what he needs kind of thing. But I think that afflicts a lot of people.

[Barry Ritholtz]

You know, I'm trying to remember who it was might have been Noah Smith. We were involved in a group discussion on wealth and happiness. And I think it was Noah who said you have to break the world into two groups. And the group that's been divorced or is in the middle of going through a divorce, the curve of their happiness relative to their money looks totally different. That it's such a miserable experience. Almost no amount of money is gonna change their headspace. And you wrote something related to that, which is unhappy people, regardless of how much wealth they have, are always going to be unhappy. That has to be. And happy people, the more money they get, up until a certain point, continues to bring at least some degree of happiness and perhaps some contentment. How true is that? Are some people just unhappy and nothing is ever going to change that?

[Morgan Housel]

Yeah, I think that's true. I mean, that's one of the most important little quirks of the, the broader topic of the relationship between money and happiness. Does earning more money make you happy? The, the asterisk there is that if you start out as an unhappy, anxious, depressed person. It's unlikely that earning money is going to make you happier. It's not going to fill the hole that you needed to fill. But if you start out as a pretty happy, joyful, healthy, content person, earning more money is leverage on who you already are. So like in either direction, it's just leveraging who you already were to begin with. And so yes, you can find lots of examples of people who earned a lot of money and had an amazing life. The money made them very happy. Most of those people still would have been happy anyways if they earned less. And we can find plenty of examples of the cranky old crotchety billionaire. And they probably would have been cranky and crotchy. There's no amount of money or success that would have changed that.

[Barry Ritholtz]

At its core, that's really amazing. Really. The last question. So right now the Psychology of Money is on pay stage. Hit 10 million copies. Since this segment is on your writing process, as you were putting this together, and I remember speaking with you as you were writing this and stitching together a whole bunch of work, did you have any idea, hey, I'm onto something? Or did it just feel like I got a deadline and I'm not going to make it?

[Morgan Housel]

100% the latter. 100% the latter. I think it's true that in many aspects of life that 90% of virality is lost. Or it's to use what we're talking about.

[Barry Ritholtz]

We're talking about Derek Thompson, not repeatable and hit makers and how random hit records are and the Impressionists. And that book just goes through a run of, hey, but for this, this and this, none of these things would be well known and beloved. Is it really 90%? That's a wild number.

[Morgan Housel]

And sometimes I'm making that up, but that's what it feels like. I mean, the first print run of psychology money was 5,000 copies because all the data that we had at the time, that would be a big success. And if you know anything About Publishing, selling 5,000 books is no small feat, right? To get 5,000 people to pull out their credit cards and pay for your words, that's a success.

[Barry Ritholtz]

Can I tell you, it's so funny you say that. So I read the initial manuscript over the summer and then the hard copy shows up a couple of weeks ago and I went through it a second time. And as I'm reading it, I'm sitting on a big comfortable chair in a well lit room with a lovely view out back and I'm thinking, you know, I don't really need a lot of money to be happiness. I just need 27 bucks to buy a book to read each week. And what is more delightful than either lying in a hammock or sitting in a comfy chair and taking 2000 hours of somebody's intellectual output for 27 bucks? Is there a bigger bargain in all of the world than purchasing a well.

[Morgan Housel]

Written book and a $30 hammock and a nice view and a warm cup of coffee? Doesn't take that much cup of tea when I'm reading.

[Barry Ritholtz]

Absolutely. Coming up, we continue our conversation with Morgan Housel, author of the bestselling book Psychology of Money, discussing how he writes books, essays and columns. I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio.

[Hannah Fry]

Autotrader is powered by Auto Intelligence, the hyper personalized way to buy a car. AutoTrader's tools sync with your exact budget and preferences to tailor the car shopping experience totally to you. Budgeting lets you input your info to see listings in your price range. Search and inventory helps zero in on your dream car. You can choose from new or pre owned, the style of the car and the features like engine size, color, all the way down to whether you want a trailer hitch. Go ahead and get picky. Don't worry about scrolling endlessly. Autotrader Powered by Auto Intelligence only shows you vehicles based on what you can afford and what you want. And pricing shows you which listings are the best deal so you can feel like you're winning the negotiation without negotiating. You can even choose how to close the deal online at the dealership or a little of both. Autotrader Powered by Auto Intelligence makes the process of buying a car less of a process. Try it today. Visit autotrader.com to find your perfect ride. Hello and welcome. This is the Michelle Hussain Show. I'm Michelle Hussain. I speak with people like Elon Musk.

[Barry Ritholtz]

I think I've done enough. And Shonda Rhimes.

[Morgan Housel]

That's so cute.

[Hannah Fry]

This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me listen, listen and subscribe to the Michael Hussein show from Bloomberg Weekend. Wherever you get your podcasts, you certainly ask interesting questions.

[Barry Ritholtz]

I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest is Morgan Housel. He is the best selling author of Psychology of Money as well as Same as Ever. His latest book, the Art of Spending Money. Simple Choices for a Richer Life. So the book shifts from Your previous writing, how we think about money, how we make money to how we actually use it. What inspired that pivot?

[Morgan Housel]

I think a lot of it was. If you asked me five years ago what my investing philosophy is, I could sit here for hours and tell you my philosophies of investing and why I do what I do and what the logic is behind it and how it fits my personality. I could talk to you all day about that. And you and I have over the years talk about that topic. But if you asked me five years ago what is my. My spending philosophy, how do my wife and I think about how we spend our money and what. I couldn't really tell you anything. I didn't really thought about it. And as I look to. There are literally tens of thousands of books written about how to grow wealth, Tens of thousands of books written about how to grow wealth, virtually none written about what to do with it. It's one of the few areas in finance that, like, has not been trampled over yet. And I think part of the reason why is because we intuitively assume that nothing needs to be said about it, that, yes, we, we know how complex markets are, and that's just. We can talk all day about the intricacies of it. But when you talk about, like, spending money, I think most people's intuition at least, is like, you just spend it, you just buy things, and then that's. That's. It's better. It's all. It's all good. And I think. But if you. If you observe people, rich people, poor people, everybody in between, you realize it's not that simple, that there are some people who have gotten a lot out of spending money, have done it very well, have used it as a tool to live a better life. Life. And there's probably an equal number of people who've done a very poor job about it, for whom it controlled their personality equally.

[Barry Ritholtz]

I would say a lot more, maybe more.

[Morgan Housel]

They were chasing a phantom life that they could never keep up with. They were constantly tortured, mentally tortured by keeping up with the Joneses, that kind of thing. That's actually, that's like. There's such a deep psychology of it in there. And so what the book does is I. I don't tell you how to spend because I, I don't know you. I don't.

[Barry Ritholtz]

I say it's very subjective and.

[Morgan Housel]

Very subjective.

[Barry Ritholtz]

It's called the Art of Spending Money, not the Science of Spending Money.

[Morgan Housel]

Right. And which also mirrors how I think about investing. I don't think there's One right way to invest. People have very different personalities, different risk tolerances and whatnot. And it's the same for spending. But I think the psychology of how people think about envy and contentment and happiness and social aspiration, that tends to be universal. So that's what the book digs into.

[Barry Ritholtz]

I love the quote and I don't remember who I'm stealing this from. Nothing is more infuriating than seeing your idiot brother in law get rich.

[Morgan Housel]

That was JP Morgan. Morgan.

[Barry Ritholtz]

Unbelievable, right? Absolutely true. There's a quote of yours that I'm not gonna steal. I'll give you credit. And this speaks right to how subjective our experiences are. Your personal experiences make up maybe.0000001% of what's happened in the world, but perhaps 80% of how you think the world works. I love that equ quote. Explain it.

[Morgan Housel]

You see it a lot in a lot of fields, particularly politics of the life that you have lived, the experiences you've had, the town that you live in, the employment situation that you face during your life makes up your view of the world, your model of how the world works. And therefore it influences what you think should happen next. And virtually everybody does this, that what you have. Nothing is more persuasive than what you've experienced firsthand. And you can go out of your way to try to understand other people, people and be empathetic of what they've been through, but nothing makes more sense to you than what happened to you personally. And since we've all had very vastly different lives, different generations, different countries, different parts of the world, we all have different models of how we think the world works. And a criticism of my first book, the Psychology of Money, were people who would write and say what you wrote might be true for a college educated white American man, which is what you are, which is what I am guilty as terms. But they would say in a way that they were absolutely right to say, it's different for me in this country, in this generation, whatever it may have been. And I would say yes, I totally get that. I tried to make the point in the book, but I'm still beholden to the lens that I have lived as everybody is.

[Barry Ritholtz]

You know, the greatest thing you could do to get out of your own little bubble is just travel across the country by car and suddenly realize, oh, now I understand. This is why farmers say what they say. This is why people out in the Midwest vote the way they do, the country or the world. And it's really a shame that less than 50%. I don't know if the statistic is still true. Less than 50% of Americans have a passport. Used to be a data point. I don't know if that's still correct. But you get out in the rest of the world and suddenly you say, oh, we're not the only ones who know how to do this. Other countries do this specific thing better than us. We need to be more open minded about our narrow little experience.

[Morgan Housel]

And the better question, if you see someone who thinks or acts very differently than you, the question you want to ask is not why do you believe that? It's would I believe the same thing if I were living in your life? And almost all the time the answer is yes, that if you were the farmer, you would also vote the same way way that if you lived in Russia or China or Venezuela, you would also think the same way as they do. And so it's very easy to criticize them like you know to criticize other people. Look at how dumb they are making these decisions when you would do the exact same thing if you were in their shoes.

[Barry Ritholtz]

So let's get focused on the book because there are some wonderful quotes and wonderful chapters in it. One of the themes throughout is the trade off between wealth as a source of freedom versus riches as a status symbol. Explain the difference I make.

[Morgan Housel]

I make up these definitions. So this is just my, my view of it. But I would define rich as you have the income to buy the things you want. You can make your mortgage payment, you can make your car lease payment, whatever you, you can purchase the lifestyle you want. Wealth, I would say, is having some level of independence over both. Financial independence in order, the ability to work where you want as often as you want as take time off when you need to, retire when you want to. But also like intellectual independence, you don't have to pander to other people. You don't have to pander to a boss or to clients or to regulators. You have the independence to be who you are and wake up every morning and say I can do whatever I want today. That's wealth. And the interesting thing is there are people who make millions of dollars a year who are rich and have no wealth whatsoever. And there are people who make $50,000 a year who are not rich and are extremely wealthy, healthy in their ability. For example, I use the example of my, my late grandmother in law in the book. For 30 years she lived off of nothing but 17 or 1800 dollars a month in Social Security. She had no pension, no assets, no nothing. She was broke. 1700 bucks a month. Social Security. Happiest woman you'll ever meet in your life. Happiest woman you will ever meet ever. She was perfectly content. She had no money, but she didn't want any of it. She was totally happy and content. Tent working in her garden and going for walks and like bird watching with her friends. It's all she wanted to do. And so she had no financial wealth and she was like off the charts psychological wealth. She had total control over expectations. Part of it was she was a child of the Great Depression and like that. I'm sure that had had an impact on him. Back to, you know, we're just mirrors of our past experiences. But you and I know people who are extremely wealthy on paper who are the opposite. They might be billionaires. They have financial wealth and they have no psychological wealth. And unlike my late grandmother in law, they wake up every morning being like, it's not enough, I need more, I need more, I need more. So the difference between financial wealth and psychological wealth is a big part of it.

[Barry Ritholtz]

The most valuable financial asset is not needing to impress anyone. The ability to not need to prove yourself to strangers is priceless. I heard this how much of our bad spending behavior is just simple, simple primate status seeking within the tribe?

[Morgan Housel]

I think a tremendous amount of it and you don't need to be to look very far to see that. I heard this great quote from the comedian Jimmy Carr recently. He said, in your 20s most people worry about what other people think of them. In your 30s you say, I don't care what anybody thinks of me. And in your 40s you finally realize the truth, which is that nobody was thinking about you all along. And it's such a wonderful, such a wonderful quote. The idea that nobody is thinking about you as much as you are. And nobody cares about your house, your clothes, your jewelry. Nobody cares about it as much as you do. They're busy worrying about themselves. I think that realization, at least for me, was so liberating to be like, look, why am I trying to peacock for strangers if they're not even paying attention? What I want to do is use money as a tool to help the things and lever the things that actually make me happy, which is time with my kids, health, independence, like those things are great. But to the extent that I'm just using it to try to gain the attention of strangers who are too wrapped up in their own heads to even pay attention to me, then that was a very freeing and liberating moment.

[Barry Ritholtz]

The spotlight bias is fascinating because we're all the lead characters in our own story, but in everybody else's story, we're, you know, walk on actors. There's extras just in the background.

[Morgan Housel]

Yeah. I mean, I remember seeing this study of they would take somebody and put them in, like, an ugly sweater, and then they would send them into a party, and then they would, you know, the person would mingle around the party in this hideous sweater. And then they would ask everybody else at the party, did you notice the woman in the ugly sweater? And everyone's like, no, no, no. Didn't pay any attention.

[Barry Ritholtz]

I have a pimple over here that I've been thinking about the whole time.

[Morgan Housel]

But if you asked the woman who was wearing the ugly sweater, the test subject, how many people notice, she basically says, everybody. We always overestimate the extent that other people are thinking of us.

[Barry Ritholtz]

That's amazing. Let's talk about time. Money's greatest intrinsic value, and this can't be overstated, you wrote, is its ability to give you control over your time. So we know that's very true when it comes to earning money and investing money. Is it true when it comes to spending?

[Morgan Housel]

I've been a big saver for my whole career. I know you have as well. I live bloom. I mean, save and invest. Invest the majority of what I make. And I've never viewed it as saving money or delayed gratification. I think I always viewed it as purchasing independence. And I get a benefit out of that right now, today. And I think that, like, very simple reframing of it is important. If you view it as saving money, idle money, delayed gratification, it feels like a burden. It feels like work, and it feels like, yes, I have this wealth, but I need to go deploy it, like, quickly. I think if you view it as every dollar that I save is a piece of my future that I own. And I get benefit out of that right now. I get benefit out of knowing that I'm independent today. It's not delayed. That's been an important shift in thinking for me that all I want out of money is to be independent. I just want to be able to wake up every day and say I can do whatever I want today. Even if most days I wake up and say, I want to work today I want to be productive. It's my choice, and I can do it on my terms with the people who I like and quit when I want to do what I want to that is more valuable than any material possession you can have.

[Barry Ritholtz]

I really didn't start spending money until my 50s. Like I was a worker saver for most of my life. And it was only, you know, once. I never had a midlife crisis. But you start to realize, and certainly the pandemic, I think very much made everybody realize, hey, life is short and you never know when your number comes up.

[Morgan Housel]

Yeah.

[Barry Ritholtz]

So what am I waiting for? I think there was a lot of that going on. Yeah. Have you made that pivot? Have you, like, because I know, I recall when you were in D.C. and you were looking for houses back on the West Coast. I remember you wrestling with, do I really want to buy a big house? How many kids are we going to have? How has that spending decision felt? How has your personal spending changed?

[Morgan Housel]

My wife and I have loosened up over the years. Barry, you and I have known each other for 15 years and we've been, been. We've spent a lot of time personally together talking about our own lives and whatnot. And you've known. And I think you've probably given me playful grief about how cheap I used to be. It was, it's always been a thing I've always been. Or I, I was for a long time very cheap. But I, my wife and I were totally content and it always kind of not bothered me. But I've always found it interesting that people would give me so much grief about how little I spent when the truth was like, we were told, we, we were living a great life. We were out, we were, we were thrilled with what we did and we've loosened up. We spend considerably more money now than we did five or 10 years ago. But it's always just been on the framework of independence. Because the truth was, 10 years ago, I bought anything I wanted. It just wasn't that much. Just didn't want that much. And today we buy anything we want and it's just marginally a little bit more because we have kids and we've, we've, you know, found new things that bring us joy and whatnot. And so it's always been. I always feel like we've been in control over it. Even when we were very frugal or today when we've loosened up a little bit. It's always been, been our choice, not pushed or forced about by social forces in society and marketing.

[Barry Ritholtz]

You know, it's funny, my, my wife is the conservative spender. I'm, I'm the value conscious spendthrift.

[Morgan Housel]

Yeah.

[Barry Ritholtz]

So I will buy stuff, but I have to feel like I'm getting value for money. All the junk I've bought over the years Watches, cars, houses, whatever, everything I own, I could sell for more than I, I paid because I feel like, like I can't imagine walking into a dealership and saying to the manager of the Ferrari Ferrari of Long Island, I'll take that 500. It's unconscionable to me.

[Morgan Housel]

It's never too late for a midlife crisis though. You can still figure it out.

[Barry Ritholtz]

You know, it's not so much a midlife crisis as it's been a post pandemic. Life is short. What are you waiting for? And in, in the office we are constantly. True story. I get a call from a client, wants to buy a Ferrari and wants to buy a sailboat. And someone says, oh, Barry's boater and he's a car guy, talk to him. And the answer I told him is you've never been a sailor. Why are you gonna spend $2 million on a 50 foot sailboat that A, needs a crew and B, you'll use twice and sell for a half a million dollar depreciation? But by the way, this guy can buy a Ferrari a month for the rest of his life and still leave a nice estate to his kids. Go buy the Ferrari and not only buy the Ferrari, take the kids to the Ferrari. High performance driving class, which the dirty secret about all these racing schools are effectively defensive driving courses. In drag, it's all about staying within your skill set, staying within the parameters of what the car can do. You become a better, safer driver. Even though it's about apex turns and high speed driving. Driving. And he did, he did that. He bought the Ferrari, loves it, took the fam to the course, everybody had a great time, bought the boat, sold it a year later, took a big hit. I'm not allowed to mention the boat anymore. So it's.

[Morgan Housel]

But I think, I think you could easily imagine a client that was the opposite, that they were like, sailing has always been my dream. Oh, 100% change my life.

[Barry Ritholtz]

Absolutely.

[Morgan Housel]

But. And they loved it. And they also bought a Ferrari and a week later said, why did it. I do do this.

[Barry Ritholtz]

It really depends on who you are, what you are. The joke about boaters is every boater's favorite boat is their second to last because they only always go one step too far. No, no, the forty foot was plenty. I don't need a giant whatever. But, but that's very much a case. So let's bring this back to the book and spending. Talk about the connection between money and happiness. And what is spending for contentment? How does happiness and contentment differ I.

[Morgan Housel]

Think one of the issues with money and happiness is that we chase the wrong emotion. We chase happiness. And it seems very well intentioned. Of course I want to be happier, you want to be happier, that's great. The problem is that happiness is always a fleeting emotion. You people are rarely happy for more than a couple minutes at a time. I think it's very similar to humor where if I told you the funniest joke you've ever heard, you laugh for a couple minutes, a couple seconds, you don't last to the next, you don't last for 10 years. It just doesn't work that way. It's always fleeting. So I think when you daydream about the new house, the new car, the boat, when you daydream about how great that will feel, by and large what you are imagining is being content with those things. You imagine yourself in the future house, sitting in the living room and what you actually imagine is yourself being, saying, I'm good, I'm totally, I don't need anything bigger. This is, this is what, that's what feels good. Picturing and imagining contentment feels amazing. And I think that's what people should aspire to. Not necessarily happiness, but contentment. And I think that's, that's always a goal because you're not truly independent if you're not fully content.

[Barry Ritholtz]

You know, that's. To me, that's the value of buying a lottery ticket for two bucks. Isn't the one in a billion chance that you're going to win $100 million. It's the 20 minutes you get to sit around joking about what you would do with $100 million. That's fun.

[Morgan Housel]

Yeah, of course it's fun.

[Barry Ritholtz]

I remember having an argument with my sister. We were kids. What do you mean you wouldn't buy me a car? All right, maybe I'd buy everybody a car. What about this? What about buying a house? And it was, we were having this hilarious debate. No one won anything, was a dollar lottery ticket. So that's always fascinating. I love the story that Carl Richards tells for people who don't know who Carl Richard is. He's the sketch guy, does these wonderful little diagrams. Had a New York Times column for a long time time. And he tells a story of being big biker, loves cross country biking. There was a bike he was jonesing for $6,000 for this really high end ultra lightweight titanium bank bike. And he couldn't bring himself to pull the trigger. And his wife says, you bike four times a week, go buy it. And he said A year later, it's the best purchase he ever made. He goes out with friends, he has these memories from it. It's just been wonderful. How do you distinguish between the purchases that are, that are going to bring you joy and the purchases that are just empty, unsatisfying baubles?

[Morgan Housel]

I think you kind of hit the nail on the head there when you said Carl buying the bike. It was great because of the experience, because he goes out with his friends and he creates all these memories with it. And like that's what made him happy, not necessarily the bike. It was what the bike allowed him to do. I think it's similar for homes. Where will buying a big mansion make you happy?

[Barry Ritholtz]

Here?

[Morgan Housel]

The answer might be yes, if it makes it easier to have your friends over and have your friends.

[Barry Ritholtz]

You tell in the book about people who have houses that feel like hotels are so large, needs a staff of 400 to run. Nobody's happy in those houses.

[Morgan Housel]

Right. And you can compare that to someone who lives in a 1500 square foot house but has their friends over every Friday for a barbecue and they stay up till one in the morning laughing with each other. That's a better life. That's a way better. So it's not one what the possessions can do, it's how can they or what the possessions are. It's how they can serve as a conduit into things that make you actually happier. And for everyone those things exist. Like maybe buying a bigger house will make you happier. And buying a cool car if you're spending time with your friends and you're going, you're taking your kids to, to, to track races and whatnot that you talked about. Maybe that, that does make you happier. But it's usually not a direct thing because you can easily imagine buying the mansion but having no friends, having no family. And you're sitting there alone and then you're wondering why you feel unfulfilled, why you dreamed for years of having this house and now you're sitting in it and you're like, I don't, I don't feel anything. Because what the, the only situation which would actually make you happier and more content is what it would serve as a lubricant for, for bringing other people over that actually make you happy.

[Barry Ritholtz]

Quick, quick car story that I think you'll appreciate. So one of my projects was taking a 300,000 kilometer 87, 1987911 coupe that had been in an accident. Single owner for like 25 years. The body and the interior was in really good shape, but it needed a lot of mechanical work. And I took this long story short, converted it to an ev. It was long process, and I was kind of horrified at all the Porsche purists who would just torch me for doing such blasphemy. And a friend owns a detailing and rap shop, and he hosts a big cars and coffee every year. And he's like, hey, can you bring the ev? I don't really know if I want to do that. I'm going to get, you know, really beaten up over it. He's like, trust me, it's a great crowd. All right, so. And this car ended up costing me everything said and done about what it would have cost me to walk into a Porsche dealership and say, give me that 911. Brand new and not in. Probably the same is true where you live. Where I live, 911s are Camrys.

[Morgan Housel]

They're everywhere.

[Barry Ritholtz]

Right. They're, they're valuable, but they're not rare, whereas Ferraris are rare and valuable. So I bring the. All right, I'll bring the EV. And I bring it to this event. It's about 50, 60, 70 cars. And I'm right across the way from a guy with, with the brand new half a million dollar Ferrari Solindri. It's its new front engine, 12 cylinder. And so I open the front where there's a big battery pack and I open the back where the engine's supposed to be, and there's another battery pack with a Tesla motor on the bottom. And I just brace myself for people coming up and just like, oh, you destroyed this car. And I was so wrong. People were fascinated. And by the end of the day, I felt bad for the guy with the Ferrari.

[Morgan Housel]

Yes.

[Barry Ritholtz]

He was there by himself. No one was talking to him. I had a steady stream of people saying, wow, this is really cool. This is different. This is a one off. It doesn't hurt that the license plate is EV911. It's the first one in New York. That was genuinely surprising to me that it wasn't something that you could just buy. It was something that created a little. Required a little thought, a little creativity. Yeah.

[Morgan Housel]

And foster new relationships for you and I. Oh, God.

[Barry Ritholtz]

I peop people giving me cards. Hey, I want to. I'm hosting this event. Can you bring this car like it was? And every time I bring that car anywhere, people lose their minds.

[Morgan Housel]

That's great.

[Barry Ritholtz]

It's so, it's so fascinating. And it wasn't a function of spending a boatload of money. It was A function of, hey, this is kind of odd, kind of different. You have. Every time I spend money, you're in the back of my head. I wanna go through a couple more quotes before we get to our favorite questions. You cite the University of Pennsylvania, Professor Killingsworth. If you're already an unhappy person, it's unlikely that more money will ever fix your problem.

[Morgan Housel]

Yes, it's gonna leverage who you are in either direction.

[Barry Ritholtz]

Either direction. And then our friend Michael Batnik said something. I hope I'm not talking out of class. Wealth seems like a burden and an obligation. The people I know have become wealthy. Other people treat them differently. They always have their hands out at a certain point. It doesn't seem like it's worth it.

[Morgan Housel]

I think everyone can make it worth it. But it's easy for it to spiral out of control and to let it change what other people think of you. Your family, your friends, the rest of society. And so it's very easy to think that when we are spending a lot of money, we are gaining people's admiration. But you have to be careful because often what you are, the emotion you are fostering is envy. That other people envy you. And it's hard in real time to know which is which. You're like, oh, they're looking at me. They're looking at me. They're talking about. They're talking about me like they admire me. No, no, they envy you, which means they hate you.

[Barry Ritholtz]

So that's a good point to bring up. Fomo. FOMO is recklessness masked as ambition. Explain.

[Morgan Housel]

It's outsourcing your critical thinking to other people. People. And those other people got rich quickly, which of course is going to. Is going to inhibit their own ability to think rationally and cleanly about it. It's a very dangerous thing.

[Barry Ritholtz]

Let's talk about wealth as everything you don't see, which is effectively double entry accounting. You see the asset, you don't see the liability.

[Morgan Housel]

Yeah, I can see your house. I can see your car, your EV911 car. I can't see your bank account. I can't see your brokerage statement. I can't see how much you save for retirement. Like all wealth is actually hidden because wealth is the money that you didn't spend. It's the cars you didn't buy, the vacations you didn't take. It's money that you've saved for independence. And it's completely invisible. And it's pretty pernicious because if you think, like for physical health, you. You can see physical health. This person's overweight, this person's ripped there. You can. You can see it. And so it's easy to find a role model. I want to look more like that person, less like this person for money. It's very difficult to do because you can't see wealth.

[Barry Ritholtz]

You don't see the debt, you don't.

[Morgan Housel]

See the leverage, you don't see the leverage, you don't see what went into it. And of course, of course, there are a lot of people who appear to be wealthy who are absolutely broke, and the reverse is true. So it's very difficult to know who to follow, who to take your cues from.

[Barry Ritholtz]

If you're. I love this quote, and this is your words. If you're a good dad, a good husband, an honest person, a hard worker, a helpful friend, and a funny joke teller, you've probably earned 98% of the respect and admiration that I'm capable of giving you. You, if you happen to be rich and successful, I might bump that up.

[Morgan Housel]

To 99%, but let's not pretend it makes much difference. I told that to a good friend of mine who is one of my favorite people in the entire world, earns a modest but not substantial income, and it bothers him. And I told him that one day. I was like, look, if you have these, like, if you're a good husband, a good father, if you're fun to hang out with and you're funny, that's about all the respect and admiration I can give you. And if you happen to make more money, like, okay, kind of cool, maybe that brings some more stories and whatnot, but it doesn't make sense. Much difference. I like you for this stuff, not the stuff that you're actually chasing.

[Barry Ritholtz]

Last question before we get to our favorites. What do you think people don't know about the art of spending money, but should? What's the most important aspect of this that just seems to slip by on notice?

[Morgan Housel]

Probably that there's no formula for it, that what works for you might not work for me, and vice versa. And a lot of people get into trouble with finance, whether it's investing, earning or saving or spending, when they follow the advice that is good for one person, but. But not for them. And it's a very vicious trap to get into because it worked for somebody else. You're like, oh, that's what I should do. It worked for them. It surely should work for me. You have to spend more time kind of looking in the mirror, so to speak, and figuring out who you are, what you want.

[Barry Ritholtz]

Really, really Great insight. All right, let's jump to our favorite question, starting with who were your early mentors who helped shape your career?

[Morgan Housel]

I would be lying, and I'm not blowing smoke if I said you and Josh. I think in equal amounts, you're gonna.

[Barry Ritholtz]

Have to explain that, because you and.

[Morgan Housel]

Josh, this would have been 2013. Were some of the first people who recognized me outside of the Motley fool, who broke me out of that. Now, I was. I was. I felt good and was comfortable within the zone of the Motley fool for their members and whatnot. I had a pretty big audience there. It was pretty good. You and Josh were the first ones outside of the Motley fool who recognized me. And I feel like that was. It was unbelievable. And I think about this a lot of, like, when you see somebody like that, that particularly if they're young, anything you can say or do to help them is enormous. It might be the smallest thing in the world to DM them or reach out and say, hey, you're doing some good work. I'm really proud of you. I like your stuff. It takes nothing, and it can completely change their life.

[Barry Ritholtz]

Nothing brings me more joy than hearing people say things like that.

[Morgan Housel]

Well, that's the only nice thing I'll.

[Barry Ritholtz]

Say about you today, because the thing that's so amazing is these are throwaway that you say, hey, really like that column? Really like that piece. I thought it was that to you, it's three seconds and of little bit of honesty and someone says, this was really meaningful. That I kind of felt like I was lost, or I kind of felt like no one was appreciating me. And just hearing that somebody recognized that I had some skill and talent was huge. You forget what it was like when you were in your 20s and 30s, grinding away unnoticed for a decade or so. Right. How long were you with the Motley fool before?

[Morgan Housel]

I was there for 10 years before I left. But I remember when you and Josh did that for me. It was 2013. That's how you know vividly. I remember it. And I remember how much the confidence boost that it gave me to keep going was. Was enormous.

[Barry Ritholtz]

Well, that's lovely of you to say. I really, really appreciate it. Both of us have an eye for talent. I could. I could. I could say that. And you have fulfilled all of our highest aspirations for you. Let's talk about books. What are you reading right now? What are some of your favorites? And I know when you finish writing a book, like, the whole process, you're not reading anything other than research, so Talk about your favorites.

[Morgan Housel]

I'm reading a book right now by Stefan Zweig, who was a journalist in the 20th century and he wrote his book Memoirs, which is basically about how the world went from. He was. He was living in Austria, in Vienna, and how the world went from before World War I. Europe was so civilized and so great and everyone viewed that that was discontinue indefinitely. That it was so organized and so polite and so. Which of course is somewhat of an exaggeration, but that was the view that he had. And then he talks about how the world changed both with World War I and then especially with World War II, and how everything happened that nobody thought would have been possible before it happened and how culturally and socially that world changed. So that's. That's a reading right now.

[Barry Ritholtz]

Thank goodness something like that would never happen.

[Morgan Housel]

Exactly right.

[Barry Ritholtz]

Let's talk about streaming. What are you listening or. Or watching these days? Be it out. I don't want you. This isn't another solicitation for a compliment, but what are you watching? What are you listening?

[Morgan Housel]

I finished Succession not too long ago. It starts out one of the best I've ever seen. Seen one. No, no, no. I. I didn't take that at all. One of the best I've ever seen.

[Barry Ritholtz]

I love every second episode. I don't like any of these people.

[Morgan Housel]

Oh, but that's the point. I loved every second of Succession.

[Barry Ritholtz]

Wow.

[Morgan Housel]

And then I just finished your Friends and Neighbors.

[Barry Ritholtz]

Really good. I really good.

[Morgan Housel]

I can't wait for Jodham.

[Barry Ritholtz]

Just gets better and better.

[Morgan Housel]

So good.

[Barry Ritholtz]

And if when that first came out, he hosted Saturday Night Live and I want to say the best episode all season.

[Morgan Housel]

So good. I can't. I can't wait for the second season.

[Barry Ritholtz]

That there's a lot of status, spending, earning. I mean, it fits right into the sweet spot of what you write.

[Morgan Housel]

Just such good writing. Character development there.

[Barry Ritholtz]

Our final two questions. What sort of advice would you give a recent college grad who was interested in a career in either investing or writing about finance?

[Morgan Housel]

Read as much as you possibly can. It's very boring advice, but that's everyone. No one has more confidence in their ability or where they think the world is going than a 21 year old man who's never read a book about history or investing. Nobody thinks they've figured it out more than that, right? And spend as much time as you possibly can reading as much as you can from the diverse field of topics that you can.

[Barry Ritholtz]

And our final question. What do you know about the world of investing, writing, earning and spending today that would have been useful back in, in the financial crisis, when you were first launching your career.

[Morgan Housel]

We mentioned diverse things there, like writing and spending. And I actually think I have very similar philosophies on both, which is when I write, I want to write for an audience of one, which is me. I just want to write things that I think are interesting, telling stories that I think are funny and unique. And if other people like them too, that's wonderful. But I know that I can't please everybody and that's just an inevitable part of it. So if I'm going to pander to one person, it might as well be myself. And I think that's how I spend money, too. I spend to please myself and my family. And I don't care if other people do it differently. I don't care if other people think it's the wrong way to do it. It's what works for me. And again, if I'm going to pander to anyone in how I spend it might as well be myself.

[Barry Ritholtz]

Well, thank you, Morgan for coming in. This is everything I was expecting it to be. We have been speaking to Morgan Housel, author of the Psychology of Money, Same as Ever, and the new book the Art of Spending Simple Choices for a Richer Life. If you enjoy this conversation, check out any of the 581 podcasts we've done over the past 11 years. You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever you find your podcasts. And check out my new book, how not to Invest the Ideas, Numbers and Behavior that Destroy wealth and how to Avoid Them at your favorite bookstore. I would be remiss if I did not thank the crack team that helps put these conversations together each week. Alexis Noriega is my video producer. Anna Luke is my podcast producer. Sage Bauman is the head of podcasts here at Bloomberg. Sean Russo is my researcher. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.