RR #128 - Morgan Housel: The Psychology of Money

As author and financial expert Morgan Housel explains this episode, “people don't make financial decisions on a spreadsheet. They make financial decisions at the dinner table.” Today we chat to Morgan about his key insights into financial decision-making — many of which are captured in his book, The Psychology of Money. Our conversation opens with an exploration of how investing success has less to do with what you know and more to do with how you manage your behaviour. We then look into the dangers of emulating top investors and how luck can fuel success. Reflecting the theme that people invest according to their unique circumstances, Morgan shares why he prioritizes endurance as an investor by minimizing his debt and having high cash reserves. After hearing his take on debt and whether young people should use leverage, we dive into how financial expectations impact investing and the importance of deciding what ‘enough’ means to you. We discuss the virtues of saving like a pessimist and investing like an optimist before looking into the role that financial advisors play in guiding their clients. In the latter part of the end of the episode, Morgan touches on active versus passive investing, the purpose that bonds serve in your portfolio, his top lesson from 2020, and why he’s empathetic toward people who sell their portfolios during a downturn. Throughout our discussion, Morgan shares his clear understanding of how our psychology affects our relationship to money. Tune in and benefit from his incredible perspective.

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Links From Today’s Episode:

[luanjot]

Hi. Unfortunately, I spent years without looking for this type of content in youtube because I always ended up either on weird channels about investing in cannabis delivered in teslas or on news channels. I am not interested in any of those. I am interested in illuminating interviews like this one (already bought the book btw). I just recently discovered Benjamin's channel and this podcast and I really feel the need to say WELL DONE! Thanks. That is all. Cheers.

[MarcoEmeryLinden]

An excellent guest. Ten minutes into the video, I paused it, went to Amazon, and bought his book.

[serialcycleur]

Maybe the most intelligent vidéo about personal finance i ve watched for a long time. Great

[oludayoopanuga]

I honestly admire your sense of humour around the point of being financially independent. I will surely be getting your book.

[pnkrckmom]

"A man is wealthy in proportion to what he can do without."

[BcDano]

Big big fan of Morgan's! Great writing style with straightforward advice/insight. Thanks for having him on.

[daveschmarder-]

Another good one, guys. Listening to Mr. Housel speak reminded me of myself. I've always held a fair amount of cash, compared to others. A couple months ago, I formally took this cash out of my settlement account and put it in a savings account at the credit union. That way, it put friction in case I wanted to invest my safe money.
Last March, I saw the value of my investments go down more than the assessed value of my (cheap) house, IN ONE DAY. What did I do about it? Nothing really. I had my plan. That was to sell positions that showed tax losses and buy other investments. I won't say that I was quite so fast on the buys, but I had most of it done by early April.
I'm an older guy and I've seen this in 1987, 1992 (or so), 1998, 2000-2002, 2008 and now 2020. By this time, I realized that I should just do nothing, but just sit there. (credit: Jack Bogle)

[pierluigiparente]

Probably one of the best interviews on this topic I have ever watched.

[rumpelr]

I am definitely going to read his book! Great episode.

[SteveAgbaneje]

This video just helped me change my view on life.... thank you very much

[DrRenatoSilva]

Well done! Amazing episode and such a clear thinking and message by Morgan! Great job guys

[AnhNguyen-bivg]

I watched this a year ago and watched again and found insights that when understand and apply will improve my well being, the concept of enough, invest like an optimist and save like a pessimist. Fantastic episode! Thank you

[alexfv]

Really appreciate the nuance you bring to topics I thought I had already explored thoroughly. Thanks!

[og]

Really like Morgan's opinion and energy. Awesome interview, was hooked from few seconds in

[hillo]

Amazing conversation guys, this podcast will compound in value over time just you wait.

[JosiahTaschuk]

Fantastic content as always.
Very glad to have found content creators like yourselves. The fact you are focused on canadian finances is a bonus.

[adnanwaheed]

Appreciate you guys keeping the length under an hour.

[Woj_Poznanski]

Great interview. I love his way of reasoning. Just bought 2 of his books. :)

[SanFranSicko]

a little late, but this was a fantastic episode!

[duramajin]

I feel like with the topic of leverage we seem to be talking in extremes. Either no debt, or people going 10x leverage with margin calls. There are other ways to leverage, without margin calls and without 'swinging for the fences' . There is a middle ground between those two points.