Morgan Housel: What You Need to Master (And Avoid) to Get Rich, Stay Rich, and Build Wealth

The skills it takes to get rich are drastically different from the skills it takes to stay rich. Few understand this phenomenon more than Morgan Housel.

In this conversation, Shane and Housel discuss various aspects of risk-taking, wealth accumulation, and financial independence. Morgan explains the importance of understanding personal financial goals and the dangers of social comparison, lets everyone in on his personal financial “mistake” that instantly made him sleep better at night, and why the poorest people in the world disproportionately play the lottery—and why it makes sense that they do. They also touch on the influence of upbringing on financial behaviors, the difference between being rich and wealthy, and the critical role of compounding in financial success. Of course, we can’t have a writer as good as Morgan Housel on the podcast and not ask him about his process, so Housel concludes with insights into storytelling, his writing processes, and the importance of leading by example in teaching financial values to children.

Morgan Housel is a partner at Collaborative Fund. Previously, he was an analyst at The Motley Fool. He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers and was selected by the Columbia Journalism Review for the Best Business Writing anthology. He’s the author of two books: The Psychology of Money and Same as Ever.

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00:00 - Intro
01:20 - Risk and income
04:14 - On luck and skill
06:44 - Buffett's secret strategy
09:02 - The one trait you need to build wealth
12:54 - Housel's capital allocation strategy
13:22 - Index funds, explained
17:33 - Expectations and moving goalposts
18:51 - Your house: asset or liability?
24:13 - Money lies we believe
28:46 - How to avoid status games
31:38 - Money rules from parents
36:49 - Rich vs. wealthy
38:20 - Housel's influential role models
39:22 - Why are rich people miserable?
42:33 - How success sows the seeds of average performance
46:24 - On risk
47:33 - Making money, spending money, saving money
49:24 - How the Vanderbilt's squandered their wealth
1:00:45 - How to manage your expectations
01:03:00 - How to talk to kids about money
01:06:26 - The biggest risk to capitalism
01:10:30 - The magic of compounding
01:12:52 - How Morgan reads
01:19:16 - How to tell the best story
01:21:16 - How Morgan writes
01:32:16 - Parting wisdom and thoughts on success

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