Deconstructing Success Down To The Psychological Level - Morgan Housel

Morgan Housel is a partner at The Collaborative Fund, an investor and an author. The world continues to change, but the hairless apes that inhabit it stay the same. So there must be some laws of human psychology which remain true, no matter what time and place you're in, and today we get to go through some of the most fascinating ones. Expect to learn what reasonable optimism looks like, the difference between overnight tragedies and long term miracles, what we can learn by the divorces of the richest men on the planet, how people become tragedies of perfection, why most competitive advantages eventually die and much more... - 00:00 What is Rational Optimism? 01:15 The Benefits of Stress for Innovation 11:04 Good News Takes a Lot of Time 14:51 Why Is Bad News More Memorable? 21:25 Progress Requires Pessimism & Optimism 28:55 Hiring the Greatest Leaders 35:30 What Do You Think is Productive But Isn’t? 41:58 Good Things Are Supposed to Be Hard 51:56 Most Competitive Advantages Die Out 59:21 Never Discount the Potential of New Technology 1:04:12 Why Success Looks Easier than it is 1:10:57 Incentives Are the Most Powerful Force in the World 1:16:20 Nothing is More Persuasive than What You Personally Experience 1:20:02 The Tension of a Long-Term Mindset 1:31:07 Why Humans Are Seduced by Complexity 1:34:32 Who Would You Be if You Were Born to Different Parents? 1:40:23 Why the Richest People in the World Are Divorced 1:47:20 Where to Find Morgan - Get access to every episode 10 hours before YouTube by subscribing for free on Spotify - https://spoti.fi/2LSimPn or Apple Podcasts - https://apple.co/2MNqIgw Get my free Reading List of 100 life-changing books here - https://chriswillx.com/books/ Try my productivity energy drink Neutonic here - https://neutonic.com/modernwisdom - Get in touch in the comments below or head to... Instagram: https://www.instagram.com/chriswillx Twitter: https://www.twitter.com/chriswillx Email: https://chriswillx.com/contact/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Chris Williamson?

  Who are the rational optimists?

• 0:02Morgan Housel?

  I came up with the term rational optimist. I don't know if I did, but I don't know if I came up with the theory. But my idea was if you think the future is just going to be great, that's not optimism. That's complacency. My definition of rational optimism was you think the future is going to be better than it is today. But the path between now and then is going to be a disaster. It's going to be a constant field of landmines and setbacks and recessions and bear markets and pandemics and wars and terrorist attacks that you have to endure financially, psychologically, career wise, in order to get the reward of optimism on the other end. So it's like getting optimism and pessimism to coexist. That I think is realistic optimism.

• 0:41Chris Williamson?

  Yeah, it's like the looking at price goes from here to here, but it doesn't go like that. Price goes from here to here by going.

• 0:49Morgan Housel?

  Yeah, of course, you see it in the stock market where, you know, over a 10 or 20 year period, you can make a crazy amount of money. But in any given month, in any given week, in any given year, sometimes even any given decade, it's a disaster. And that's the price you have to pay in order to get the returns over 10 or 20 years.

• 1:05Chris Williamson?

  So we went through some of your book, Same As Ever. One of my favorite things, everyone needs to go and buy it now. It's a super easy read, very, very enjoyable. Next lesson I want to go through is when the magic happens, stress focuses your attention in ways that good times can't.

• 1:20Morgan Housel?

  There are so many examples in history of the world going through a crazy tragedy, wars, pandemics, awful things happen, millions of people die. And then you look back 20 years later and you realize that because of that incident, because of that war, because of that pandemic, there was this crazy amount of innovation and technology that took place because people were panicked and the incentives to innovate were off the charts. And you look back and you're like, look, as terrible as that was, we created because of that, all these inventions that everyone benefits from today. The most technologically innovative period in, I would say, human history

• 2:01Morgan Housel?

  took place in the 1930s and the 1940s, the Great Depression and World War II. It started with the Great Depression, which was, in analytical terms, the most. Like the the amount of productivity that increased in 1930s is more than any other decade that's taken place because it was all by necessity. Every single business in America in 1930s woke up and they were like, if we don't become more productive today, we're out of business tomorrow. So every business learned how to become more efficient. And what came from that was the supermarket, laundromat, all these new businesses that were just designed to become more efficient. The the factory line really exploded during this period.

• 2:41Morgan Housel?

  What Henry Ford did with the factory line in the 1910s and 1920s, every business took up in the 1930s out of necessity. World War II comes along and the incentives that happened because of that were just completely off the charts. During good times, boom times, people's incentive to innovate is if I create a new product, I might become rich. That's your incentive and that's a good incentive. You'll get people moving in that world. In the 1940s, it was if we don't innovate and figure out new technologies, Adolf Hitler's going to control the entire planet. That was literally what was going on back then. So the scientific community, the government, businesses overnight, they were like all hands on deck. We need to innovate like there's no tomorrow.

• 3:25Morgan Housel?

  And what came out of that in a very short period of time, I mean, I've summed it up like this. World War II began in 1939 on horseback. It ended in 1945 with nuclear fission. And what took place in those six years, what did we get out of it? Nuclear energy, jets, rockets, penicillin, like all of these things that benefit the world in massive ways today. And it specifically happened because people were panicked. You could also imagine a world, it's too early, in which 20 years from now, we look back at COVID and say like, look, because of what happened in 2020, there was probably 30 years worth of vaccine mRNA research and understanding that got compressed into like six months. And you could imagine a world, it's so consistent with history, where we look back and we're

• 4:09Morgan Housel?

  like, look, COVID was terrible and shut the world down and millions of people died. But look what we got out of it because of this happened. You could even say something about work from home and like, just like the change in culture that sped up during that period. So it's kind of this idea, it's too much to say a silver lining of World War II. You don't want to go that far. It's a terrible thing, but it's a thing of like, be careful what you wish for. Like, society improves when the world is on fire, not when everyone's is happy and their bellies are full and everyone's gainfully employed. That's when the magic happens.

• 4:39Chris Williamson?

  What what are the? Regular elements of when the magic happens. Is it being time bound? Is it people just being panicked? Is there some sort of a threat? Like, what are the motivators?

• 4:52Morgan Housel?

  I think it's the power of incentives. And mainly, it's the downside incentives. When the economy is strong, you have positive incentives. If I innovate, I might get rich. If I don't innovate, I'll still probably be fine. When you have the Great Depression or a war, it's downside incentives. It's if we don't innovate, we're all going to go out of business. We're all going to die. We're all going to be taken over. That downside incentives is what people, it gets people to be like, oh shit, we need to go now. This is not a nice to have. This is a survival. We need to go. And so, for example, in the 1940s, during World War II, the scientific community was like, literally digging through file cabinets of like, what are some like scientific papers? Like, what did we discover 30 years ago? What's this thing about splitting atoms? Like, let's try to do this one right now. And they just went full bore.

• 5:36Morgan Housel?

  And you see what humans are capable of during a period like that. Now, there's a limit to it. If you're, if you are too stressed, under too much pressure, it all breaks down. So not a lot of huge scientific innovations in the 1940s came out of Europe, with some exceptions, but that was too much trauma, too much tragedy. The United States was like, we were panicked, but there was not physical destruction of our factories. So like, we could keep it going.

• 5:59Chris Williamson?

  What are the costs that people pay for this? Like, there has to be a reason why we're not moving at that pace all the time, despite the fact that it seems to give great returns. So there has to be some sort of downside, which is disincentivizing people from doing it when we're not facing a war or a pandemic or a Great Depression.

• 6:22Morgan Housel?

  I don't know if there is a financial cost that you could put to it, but I think it is that the opposite of stress-induced innovation is when the economy is really strong, like right now. And in relative terms, everyone becomes fat and happy. And they don't have the, they don't wake up every morning a little bit panicked. I mean, I think most people will see this in their individual lives, where during a recession, even if you have a job, you're like, This is kind of hanging by a thread here. I gotta, I gotta really show up early, be the first one to the office and work really hard in a way that you don't tend to see that when everything is going well. So it's less about like what I think the cost during good times is just like the cost of, of things going well, which is just like a lack of urgency to

• 7:05Morgan Housel?

  get moving. I mean, the, the extreme example of this would be the trust funder who has like no downside. If, if, if they, if they wake up and don't innovate, don't find a new job, they're fine. Nothing's, nothing bad's gonna happen to them. And you see this in like companies that are big and rich and successful. They kind of atrophy over time and you compare that to the scrappy startup. It's night and day.

• 7:25Chris Williamson?

  I had Mackin Murphy, who's a behavioral ecologist halfway between behavioral economics and evolutionary psychology sat in that seat. He was telling me that as the economy gets worse, the average BMI of women in Playboy and centerfold mags goes up. And as the economy gets better, the BMI goes down. So there is a relationship between male preference for female body size and resource scarcity. If during periods of highly scarce resources where the future is very uncertain, you see a woman that is able to hold on to her body fat, you

• 8:09Chris Williamson?

  think, wow, I mean, what an amazing hunter gatherer. She would be phenomenal to be with me. This would be great. And they've done this in phenomenal study in canteen halls of universities. And they would show guys images of women before they had dinner and then in different iterations after they had dinner. And when they were hungry before they had dinner, they picked girls who were bigger.

• 8:36Morgan Housel?

  I mean, this has been well known that like in in way earlier times, hundreds of years ago, thousands of years ago, that women who are a little bit heavier were the more attractive ones. They were the healthier ones. There were them. And the skinny people were the ones who are like maybe facing famine. And then so it's it's a pretty recent phenomenon of like a preference for thinner women over time. That's a new thing.

• 8:55Chris Williamson?

  One of my favorite quotes from When the Magic Happens is, "The same people with the same intelligence have widely different potential under different circumstances."

• 9:04Morgan Housel?

  Yes.

• 9:04Chris Williamson?

  This ability to sort of unlock that that was already there.

• 9:09Morgan Housel?

  Yeah.

• 9:10Chris Williamson?

  Because of the external pressure. We were talking last night about Goodhart's Law. When a measure becomes an outcome, it ceases to be a good measure. But a similar one is Parkinson's Law, right? Work will expand to fill the time given for it.

• 9:26Morgan Housel?

  Yes.

• 9:26Chris Williamson?

  And this is kind of like all of these things just coming down on top.

• 9:31Morgan Housel?

  Yeah.

• 9:31Chris Williamson?

  At the same time.

• 9:31Morgan Housel?

  I mean, there's stories during World War II when FDR would be like, "We need to start producing 20,000 planes per year," I think was the number. And everyone in the room was like, "Mr. President, the absolute maximum we can produce is 5,000 per year." And he was like, "20,000 a year, go do it." And they figured out a way to do it. They figure if they're like, it's so cliched that if there's a will, there's a way. But you see what people are capable of during those periods. And again, I think that's been true for my life and then sure it's true for your life during different periods of things are going well, or like I got some big risks in my life right now. What you are actually capable of doing like changes dramatically.

• 10:07Chris Williamson?

  The biography, the Isaacson biography of Musk, I think can be summarized as make insane demand with ridiculously short timeline and continue to push people until it happens.

• 10:21Morgan Housel?

  Yeah.

• 10:23Chris Williamson?

  Under deliver a little bit, but only by your own insane metric. And what that results in is you over delivering. Buying a ridiculous margin.

• 10:33Morgan Housel?

  Yeah, and other stories of Musk building particularly at SpaceX, where someone would come to him and be like, hey, this part costs $3,000. And Elon will be like, that part should cost $20. You need to go build it. And they're like, there's no, they're like, $20, go build it. Just, just like FDR. And they eventually figure it out, like they eventually do it. And it makes you realize like, how much in life is an artificial constraint of laziness of, and like, maybe that's the wrong word, but like a good enough ism, that if that is taken away, you realize you're capable of literally multiple times what you think you are.

• 11:03Chris Williamson?

  Overnight tragedies and long-term miracles. Good news comes from compounding, which always takes time. But bad news comes from a loss in confidence or a catastrophic error that can occur in the blink of an eye.

• 11:15Morgan Housel?

  So think about the really bad things that have happened in modern times. Pearl Harbor, September 11th, COVID. They, they literally happened in an instant, particularly Pearl Harbor and 9/11. It was like one hour, everything was fine. And the next hour, the world had gone to hell. And there is no equivalent of that with good news. What is the good news equivalent of Pearl Harbor in which at 9:00 AM, everything's okay? And 10:00 AM, everything is amazing. There's no equivalent on the other end. Good news tends to take a lot of time. It tends to play out slowly over the decades. So one of the best pieces of news to happen in our, in our modern times is the massive decline in heart disease mortality. It's declined like more than 70% since the 1950s.

• 11:57Morgan Housel?

  It has saved millions of lives because we're better at controlling blood pressure. Back in the 1950s, if you had a heart attack, you're, you're dead. Whereas now, if, if you make it to the ER on time, there's a good chance you're going to pull through. They're going to get you out of it. They made massive strides, but we tend to ignore that because what happened is over the last 70 or 80 years, heart disease mortality improved like 2% per year. And in any given year, you're never going to hear about that. There's never going to be breaking news in the New York Times, like, heart disease mortality improves by 70 basis points. You'll never hear about that. But the bad news that happens quick, you can't look away from it. And so I think it leaves people more pessimistic than they should be because they are constantly bombarded by the bad news that happened very quickly and you can't ignore.

• 12:40Morgan Housel?

  And the good news that is a slow compounding over 50 years, it's so easy to ignore, even if over time, that good news is so much more powerful at like improving lives than the bad news that happens quickly.

• 12:52Chris Williamson?

  Overnight tragedies and long-term miracles. Such a lovely. Beautiful framing. Do you know the difference in climate-related deaths over the last hundred years? It's decreased by 50 times.

• 13:07Morgan Housel?

  Because so much of it used to be coal?

• 13:08Chris Williamson?

  A 98% decline. No, this is through climate mastery. So this is people that live in hot places being able to cool themselves down and people that live in cold places being able to warm themselves up.

• 13:17Morgan Housel?

  Hmm.

• 13:18Chris Williamson?

  98% reduction in the last century of people dying from climate, right?

• 13:24Morgan Housel?

  It makes perfect sense when you say it.

• 13:25Chris Williamson?

  And yet here, look at all of the people that are dying from climate. Not to say that climate change isn't something that we need to address.

• 13:32Morgan Housel?

  Right.

• 13:32Chris Williamson?

  But it's so, it's this overnight tragedies and long-term miracles.

• 13:37Morgan Housel?

  That's exactly it.

• 13:38Chris Williamson?

  In a single incident that's occurring at the same time.

• 13:42Morgan Housel?

  Yeah.

• 13:42Chris Williamson?

  And you're like, hang in a second. How can the climate-related mastery, reduction in deaths be 50 times better, like 98% reduction? But it's also the worst thing in the world and it's killing everybody in, in, in poor countries.

• 14:02Morgan Housel?

  It happens so slowly, you don't hear about it. Now, there is some bad news that plays out slowly over time. If you smoke cigarettes, that's, that's like a slow compounding. And eventually the bad news might hit you in a jerk when you die of lung cancer after 30 years.

• 14:13Chris Williamson?

  To be honest.

• 14:14Morgan Housel?

  But you're doing damage at a slow rate.

• 14:15Chris Williamson?

  Maybe so would climate change moving forward as externalities. That might be an interesting one. Look at all of this energy we've got. Look at how we've fixed it. And it's like, ah, yeah, but there's this like weird just number that keeps ticking up, the fucking CO2 PPI.

• 14:30Morgan Housel?

  Yeah.

• 14:32Chris Williamson?

  And the sea level and a couple, it's, ah, it's, you know, it's whatever. But that's the sort of thing that given enough time would be a, a long-term tragedy.

• 14:42Morgan Housel?

  Yeah. So there are a lot of those things where by the time you do notice it, you're like, oh, okay, that, that is a big deal. Now, now I can see it. I get it now.

• 14:50Chris Williamson?

  Why does bad news stick out so much? Is it just because it's more salient to us?

• 14:54Morgan Housel?

  I think it's, I mean, it's always true from an evolutionary perspective that bad news is going to capture your attention. Threats are going to capture your attention more than opportunities. Cause in order to get the opportunity, you have to first survive the threat. So that's, it's always been like that. But I think the biggest reason it occurs is just like we said, like the bad news is happening so fast. You can't look away from it. It's true in the stock market as well. There are historically over time, there have been days, months, weeks where the stock market falls 10%, 20%. During COVID, the market fell 40% in four weeks, something like that. Very rarely, if ever, will that occur on the way up. Almost no examples of the stock market rising 40% in one month will never happen. So like the ability to go down very quickly. I mean, it's the classic cliche.

• 15:38Morgan Housel?

  I think it's escalator up, elevator down kind of thing is usually how it works. But I think that's a good analogy for how a lot of things work in life too. It's just like the speed at which they occur gets your attention much, much more.

• 15:50Chris Williamson?

  Tiny and magnificent when little things compound into extraordinary things.

• 15:55Morgan Housel?

  I think it's, it's pretty common to think that a big event in the world has to be caused by a big action. That if you're going to have a major war, a major recession, it has to be caused by something enormous that is causing that thing to happen. It's usually not the case. It's usually a bunch of really small things that interact in the right order that create this massive event. I mean, this is definitely true during the Great Depression, like the biggest economic calamity in the history of this country. And what was it caused by? You had a stock market crash. Well, those happen all the time. You had a bank run. Those happen all the time. You had a Dust Bowl. That was like kind of unique.

• 16:31Chris Williamson?

  What's a Dust Bowl?

• 16:31Morgan Housel?

  The Dust Bowl was a period just around here in the middle of the country where, I mean, the backstory is after World War One or during World War One, farmers in the United States were heavily incentivized and incentivized to plant crops because we were trying to feed the starving Russians during this period. So the US government came in and said, as much corn as you can grow, we'll buy it from you. I think it was $2 per bushel at the time, something like that. So tons of farmers.

• 16:56Chris Williamson?

  That's a premium presumably.

• 16:57Morgan Housel?

  It was huge premium, tons of farmers from all over. The country came to Kansas and Oklahoma and just planted, planted, planted way too much corn. And they were terrible farmers. They were just like plowing up land in the most like voracious way that they could. And then it all kind of stopped and they all bailed and left these fallow fields to just sit there and kind of dry up. So they got dusty and then you had these massive dust storms that would, that pretty much wiped out a region. These dust storms that were just like as apocalyptic as you could imagine. How did that impact the economy? The entire farming region in the breadbasket of the United States that was producing all this corn was just wiped out. I mean, literally just covered in dust and wiped out, I mean, a huge portion of the people.

• 17:40Morgan Housel?

  And so many of those people ended up just, just abandoning it. There was no way you could make a living here anymore. So that happened at the same time that you had a stock market crash and a, and a banking run. All three of those things individually would have been bad, but then happening at the same time, you get the Great Depression. And I think there's a lot of incidences like that over time. One of the most interesting ones was during the 1950s, when we were experimenting with nuclear weapons and this was the nuclear age of war. We started to build really small nuclear bombs. The idea was that yes, we can have a nuclear bomb that one bomb can wipe out a city. But we also want to use this technology for more like tactical warfare. And they came up with really small bombs, one of which you could literally launch off of a shoulder fire like bazooka.

• 18:23Morgan Housel?

  And it would, it was a nuclear bomb, but it was like a very low yield. So it would do a lot of damage, but this was not like, like thermonuclear weapons. And the idea was like, oh, great. Like we can use these tactically. There was a joke that they even came up with a nuclear hand grenade, but they couldn't find anyone dumb enough to throw it, which was the joke at the time. But the idea was that small nuclear weapons would be safe to use. But the actually, they were actually the riskiest thing in the world. Because mutually assured destruction was, was a, a, a real thing. And it made it so that the Soviets and the United States were not going to launch a thermonuclear missile and wipe out a city because the other would just retaliate and the world gets wiped out. But if you had a small nuclear weapon that you were going to use, would you use that? Like the barrier to using that was much lower, but then if.

• 19:08Morgan Housel?

  The Soviets used a small nuclear weapon on us. Would that justify us to use a bigger one?

• 19:13Chris Williamson?

  Yeah.

• 19:14Morgan Housel?

  Absolutely. The Cuban Missile Crisis in the 1960s. The missiles that Russia had lined up to the United States, pointing at the United States, were in order of magnitude lower yield than what we we used in Japan during World War II. Way smaller, the bombs that they had. But if they launched one of those, we would have retaliated with the full force, the biggest bombs that we had. So these, like, what created the biggest risk in nuclear war were not the big bombs. It was the small bombs that we were actually more likely to use.

• 19:43Chris Williamson?

  Hmm.

• 19:43Morgan Housel?

  And so you have this tiny thing that we're like, oh, it's a, it's a nothing. It's a nothing burger. But that was going to be the trigger to actual nuclear warfare. I just read this recently. This is not in the book. The guy who invented the machine gun, his last name was Gatling, the Gatling gun. He actually invented it with the idea that the machine gun would end all wars because it was so destructive and has such a killing machine that every country would look at it and be like, we can't go to war. We're just all going to get wiped out. It's too deadly now. And so you have all these things that are like.

• 20:13Chris Williamson?

  Little do you know, Mr. Gatling. Beginning of it.

• 20:16Morgan Housel?

  You won't believe what happened next.

• 20:18Chris Williamson?

  Yeah, yeah, yeah.

• 20:18Morgan Housel?

  And so you have all these things where someone creates something that they either think is small or they're like, oh, it's not that big of a deal to use it. But it just like compounds into a much bigger thing.

• 20:27Chris Williamson?

  So fascinating.

• 20:28Morgan Housel?

  So the takeaway from all that to me is like, people underestimate the odds of big events because you think a massive recession needs to be caused by like an economic meteor. And it doesn't. It can be like five small events compounding at the same time in just the right order that set off a chain reaction.

• 20:44Chris Williamson?

  But this is evolution as well, right? This is how you go from single cell eukaryotic to prokaryotic or the other way around. Bacteria in a vent somewhere to me and you sat in front of microphones having a chat.

• 21:00Morgan Housel?

  Yeah, it's never, yeah. And like, I think if you are a skeptic of evolution, it's because you think, you make the jump of like, how do we go from a frog into a human? That makes no sense. But you're like, well, if you have point zero zero zero zero infinite change in every generation and you compound that for a billion years, then you get something great. It's like the tiniest little thing for a massive amount of time. You get something amazing.

• 21:24Chris Williamson?

  Elation and despair. Progress requires optimism and pessimism to coexist.

• 21:29Morgan Housel?

  I remember hearing this story from Admiral Stockdale, who was the highest ranking POW in Vietnam. And he was talking, after he was released, he was talking about how some of the POWs behaved when they were in prison. And he said, do you know who did the worst as a POW? It was the optimists. Because optimists would say, we're going to be home by Christmas. And then Christmas would come and go, and they were just crushed. They were just destroyed. And he said, the people who did the best were like the rational optimists, as I would define it. It'd be people who would say, we're going to go home by Christmas. No, no, I'm sorry. They would say, we're going to go home eventually. This war is going to end, and you're going to see your wife again. But we're not going home by Christmas. No, no one's going home by Christmas. This is going to be a long war. That's who actually did the best.

• 22:14Morgan Housel?

  Like, they could take optimism and pessimism at the same time, and put them together, and be a rational optimist. Another great example of this in business is Bill Gates, who, in the 1970s, when he started Microsoft, took the biggest optimistic swing any entrepreneur has ever taken. And by saying, like, there's going to be a computer on every desk in the world. Like, the craziest bold vision anyone's ever taken. At the same time, he managed Microsoft as conservatively as you possibly could, in terms of, like, tons of cash on the balance sheet, no debt. He always said that he wanted enough cash in the bank so that Microsoft could make payroll for one year with no revenue. The most conservative way you can run a business. At the same time, he's taking this ridiculous swing for the fences.

• 22:58Morgan Housel?

  And I think there are so many other businesses that are just as good, if not better, at creating products than Microsoft might be. But they were managing the business with an equal level of optimism, of like, leverage and debt, and they eventually just get wiped out. They run themselves over a cliff. So Gates could take massive optimism and crazy pessimism and be like, these things are going to coexist at the same time. And that's an analogy for how a lot of people do well over time. Like, the person, like, the pure optimist runs over a cliff. The pure pessimist never gets out of bed. The person who knows when each needs to come into play is who actually does well over time.

• 23:34Chris Williamson?

  What's that Taleb thing about, like, I'm an authoritarian with my family?

• 23:38Morgan Housel?

  Oh, yeah.

• 23:39Chris Williamson?

  I'm a socialist with my community. I'm a communist with my village.

• 23:43Morgan Housel?

  He says, at the federal level, I'm a libertarian. At the state level, I'm a Republican. At the local level, I'm a Democrat. And at the family level, I'm a socialist. It's such a brilliant. I think it's a great thing to say, like, as the size of something changes, what you expect out of it and your relationship with it also changes.

• 24:03Chris Williamson?

  It's also your nature must be able to adapt to the demands of the situation that you're in and the vertical that you're in. Okay, so a business is not just a thing, this amorphous thing. It's not just Tesla doesn't just make cars and invent shit. It also has to make money and like pay payroll and and be in compliance and it deals with lawsuits and it does all of these other things. It's like, do you really want Elon steaming into the lawsuit department for the person that's just been run over by an autonomous car? Probably not. That's where you have different horses for different courses.

• 24:37Morgan Housel?

  Yes.

• 24:37Chris Williamson?

  Right? And this is, I suppose, the difficulty comes when you, as an individual agent, try to amalgamate all of this into one brain. You know, in an organization, you can specialize, you can chunk things down. You find the person that has the nature that you want. We want to be conservative in the accounting department. We want to be creative in the advertising department. Fantastic. Like, don't get those the other way around, or else you end up with boring ads and insane accounts.

• 25:03Morgan Housel?

  And a huge problem with entrepreneurship is the assumption that because you can understand a technical product, that you know how to run the business of a technical product. It's pretty rare. So someone like Mark Zuckerberg is very rare. He had the technical chops to build Facebook, build it himself, and to run it today as a trillion dollar company. That's very rare. It's way more common for you to be an entrepreneur who knows how to build a product. And then as soon as it scales, you're like, I don't know what I'm doing here. I need to call in the big boys who know what they're doing. I mean, a good example of that was Uber, where Travis, like, no one could have built Uber other than Travis Kalanick. His ability to take a risk, his willingness to just give the middle finger to the regulators was like, no one else was willing to do that. And once Uber became a big company,

• 25:47Morgan Housel?

  Probably nobody was worse at running a company than Travis Kalanick because that same attitude of like, fuck the regulators, we're just gonna do our thing. Once Uber was a hundred billion dollar company, that's not the guy you want running the place. You can't play the game. So it's so, but that's more common to have like a different, like the person who was right to run it at this size is not the person who's right to run it at this size.

• 26:06Chris Williamson?

  I told you the story of Ben Francis last night, and I mentioned that Ben was founder, founder CEO, stepped back as CEO, guy that used to run Puma or Reebok came in, then Ben came in as like CBO or something like something to do with brand or like some sort of consultant, stepped back, then came back in as CEO. And he said this thing on the podcast that really struck with me. And he said, when your ambitions for the brand are bigger than your ambitions for yourself, that's when you'll become successful.

• 26:35Morgan Housel?

  I like that.

• 26:36Chris Williamson?

  That he was prepared to be like, hey, am I the best person for the job right now? Yes. Okay, let's not to 10 mil, let's do that. Do I have the first idea about how to run a 20 million pound business? Not really. In comes the person from Reebok. We're now at a $3 billion business. Well, you know, maybe it's actually that there's different challenges and it's useful for me to be back. And he was just completely prepared to put his own ego to one side and say, what am I supposed to do? So that shows a person who is right at multiple different stages, but not right at all stages.

• 27:11Morgan Housel?

  Yeah, I think there's an interesting alternative history in which Steve Jobs does not die in 2011 and keeps running Apple. What would Apple be today? Because the truth is after he left and Tim Cook came in, Apple did great. Apple did phenomenal in terms of like units sold, like net income, Apple has absolutely thrived under Tim Cook. And I think you'd actually make the argument that around the time that Steve Jobs happened to die, what Apple, the company actually needed was a Tim Cook. Because and, and what they needed before that was Steve Jobs. Like in the early 2000s, you needed a crazy maniac like Steve Jobs to come in and be like, I've got this crazy idea for new products and no one else is thinking of. That's what Apple needed. Once they came up with those products, what you needed was someone to come in and keep the

• 27:56Morgan Housel?

  trains moving on time, like Tim Cook. So there is a weird alternative history and I'm totally making this up. It's anyone's guess. Steve Jobs doesn't die. He keeps running Apple.

• 28:06Chris Williamson?

  Into the ground?

• 28:07Morgan Housel?

  Yes, yes. I actually don't think that's likely, but I think it's like a very real possibility that could have happened.

• 28:13Chris Williamson?

  You could, it depends what metric you want. Do you want to continue to have this sort of pioneering spirit? This person that's just like out there doing crazy things and it's exciting and all the rest of it? Yeah, in the beginning.

• 28:25Morgan Housel?

  Yes. My, my hot take I've shared with some people, and I say this tongue in cheek, I'm not actually making this bet. Within five years, Elon Musk will either be a trillionaire or bankrupt. And there's like 50, 50 odds of either. That's my hot take. I don't actually take it that seriously. But he's the kind of person who is like completely incapable of slowing down. It's always just bigger bet, bigger bet, bigger bet, bigger bet. And eventually that might, that usually catches up with people. But it's so fascinating to watch while he's doing it.

• 28:52Chris Williamson?

  Yeah, yeah, it really is. Uh, one of my friends that lives here in Austin was working for a company that recruited the highest level C-suite executives. So they didn't place Susano was Jicky or Tim Cook, but they went through the process with both of them. And what he was able to do, he had access to their internal company Intranet and every archive. And he was able to go in and see the biggest executives in the world and see what their recruiters were saying after they'd had this sit down. And I was like, this is fucking fascinating. Tell me, what did you read? And he said, well, there's a difference between the A players and the triple A players.

• 29:35Chris Williamson?

  So the A players are in there and there's, you know, the usual stuff. And there's often something that pops up that's maybe a little bit of a concern, but they're, they're good. They're well-rounded. He said, but the triple A players are 10 times better and they stand out as that as well. I think in, um, Tim Cook's, the first two words were absolute stud, were the first two words of Tim Cook.

• 30:01Chris Williamson?

  Susano was a rock star was like one of the first few sentences. And you think it's very interesting, like these people.

• 30:10Chris Williamson?

  They're more than just like, again, I don't know much about either of the guys, but from the conversation I had, they're more than just business people.

• 30:18Morgan Housel?

  Yeah.

• 30:18Chris Williamson?

  There's something like ineffable in them where people who are exposed to the best talent, the best paid, most highly placed talent on the planet for the biggest companies in the world, look at them and go stud, rock star.

• 30:33Morgan Housel?

  Yeah. And I think like back to Apple, like, once Steve Jobs invented the amazing products, the next step is, okay, can we literally make a billion iPhones and keep the quality as high as they need to be? And that's what you needed a Tim Cook for. And I don't know if Steve Jobs would have had that skill to keep that going. But you could also imagine a world in which he doesn't die. And as everyone knows, the last 10 iterations of iPhones have been exactly the same. And that would not have been the case under Steve Jobs. They would have, he would have kept innovating and created new things.

• 31:01Chris Williamson?

  Casualties of perfection. There is a huge advantage to being a little imperfect.

• 31:08Morgan Housel?

  I think it's always the case that people want to squeeze as much opportunity as they can out of everything in life, whether it's in your career or whatever it might be. And that invariably is going to eventually catch up to you. Like, room for error in what you're doing is a massively important thing to have. You saw this in 2021, where in manufacturing all over the world, the biggest trend over the last 20 years was efficient, efficient, efficient, just in time manufacturing. And then 2021 rolls around and there's a little bit of like, what is, was honestly like a hiccup in the global, in global supply chain.

• 31:40Chris Williamson?

  Big tanker gets stuck in the fucking thingy canal.

• 31:43Morgan Housel?

  Everything collapses. Everything breaks. There was no leeway whatsoever for anything to go wrong in the system. And you can imagine a world in which those companies that were doing just in time manufacturing and then like collapsed in 2021, if they had actually held a little bit more inventory in their warehouses, their ROI would have been a little bit lower in 2019, but they would have actually been able to supply products in 2021. And so it's always a case that like, having a little bit of room for error, having a little bit of leeway is great. And it's true in your personal life, too. Most people these days have what I call thought jobs. Their job is to work with their head. It's not to dig a ditch or like pull a lever. Their job is to make a decision with something. And in that world, what you really need more than anything else is time to think,

• 32:28Morgan Housel?

  time to ponder, time to like figure out a problem in your head. And what does that look like? It looks like sitting on the couch. It looks like going for a walk. It doesn't look like work, but most bosses will not allow that. Most bosses, even if you have a thought job is like, I need you at your desk, moving your fingers on the keyboard eight hours a day. And so they don't have any time in their day for something that looks inefficient, but is actually going to be like the thing that's actually critical to their job.

• 32:52Chris Williamson?

  Yeah, Rory Sutherland has this idea about no one gets fired for hiring KPMG.

• 32:57Morgan Housel?

  Yeah.

• 32:58Chris Williamson?

  Which is the safe bet, following the blueprint, doing the thing that signals busyness to a lot of people. Look at my average response time on Slack. That's really good. And it's like, yeah, but did we hire you as a Slack replier?

• 33:11Morgan Housel?

  Yeah.

• 33:11Chris Williamson?

  Is that your job to be the Slack response guy? Or is your job to be, so George, one of my good friends, his first job at Social Chain, they literally created a role for him. They called him Innovation Lead. I was like, that's like vague. What's that mean? Don't know. Not sure what they just make a, make a role for him, put him in there. He'll do something cool. He used to go, uh, this was Stephen Bartlett or company, and they had all of these different big fan pages. So they were able to design social media marketing campaigns, but they were also able to deploy them because they had the pipeline. They had a, a, a two million person Harry Potter fan group or whatever it is.

• 33:52Chris Williamson?

  And, um, George found that it was one of these open plan offices with fucking AstroTurf everywhere. And there's a slide and a ball pit, you know, like one of the classic sort of mid 2000s-y type things. And, um, George hated working in it, didn't like the open plan office, way too distracting. He needs a little bit more order. Uh, so he found that there was a room upstairs, all of these different places filming content. There was a room upstairs where they were trying to build the world's largest Harry Potter jigsaw puzzle, but no one could be bothered doing it. And it was like, there was no time limit on the product. Uh, the, the project to be completed and to be filmed. So he would go upstairs and sit on the floor in this empty room that was forty feet by forty feet with no one in it, no desk, no nothing, just a laptop on the floor

• 34:35Chris Williamson?

  and bits of Harry Potter jigsaw around him that he wasn't allowed to move because that would like wreck the continuity. But he would go upstairs and sit surrounded by fucking Harry Potter jigsaw puzzle pieces. But that was his thing.

• 34:46Morgan Housel?

  Yeah.

• 34:46Chris Williamson?

  His thing was, I don't want to be the Slack response guy.

• 34:49Morgan Housel?

  Yeah.

• 34:49Chris Williamson?

  That's not.

• 34:50Morgan Housel?

  I want to actually make a decision.

• 34:51Chris Williamson?

  Yes, that's my thing.

• 34:52Morgan Housel?

  You're a big walker. I'm a big walker. Virtually every, I mean, whenever I write a book or an article, that was written during a walk. Like, I don't think very well if I'm sitting at my desk being like, okay, time to be creative, time to work. It doesn't, doesn't happen. You get good ideas in the shower, you get good ideas going for a walk, going for a run at the gym. That's when things happen. So big people, I think people intuitively understand that you need unstructured time in your day. Where you should just have like a four hour block in your calendar that says thinking time. But, but you, you can't do that. And it's because everyone wants to like squeeze efficiency and opportunity out of their calendar.

• 35:27Chris Williamson?

  Yeah, I had, uh, I release each year the same annual template that I've done to do my end of year review. And I have to admit that this year, even though I sent out the one that I've done for five years, I actually changed it. So I did a completely different process and I love the new one that I did. So that'll be available next year for the people that are listening. And I asked myself a really interesting question. I thought it was fucking interesting, which was, what do I think is productive but isn't?

• 35:55Morgan Housel?

  Hmm.

• 35:55Chris Williamson?

  What do I do that I think is productive but isn't? Other stuff like what would I do if I wanted to make eighty five year old me miserable? What are the things I would continue doing? What would I do if I wanted to make eighty five year old me? What would eighty five year old me wish that I did more of? What do I think is productive that isn't? Calls, Slack and WhatsApp.

• 36:14Morgan Housel?

  Yeah.

• 36:14Chris Williamson?

  Staying in on weekends, sitting at my desk when I'm not working. What is productive that I don't realize dinners with new people, attending events, travel, reading?

• 36:26Morgan Housel?

  That's so good. Like what you think is productive, but isn't is like things that look like work and what is productive are things that don't look like work. Like most people would be like, oh, going out for dinner. That's just pleasure. That's just like, no.

• 36:38Chris Williamson?

  Last night, two chapters probably from you for my new book and a couple of quotes from me for yours.

• 36:43Morgan Housel?

  So Chris, you and I had dinner last night for two or three hours. And I think both of us got tons of idea for.

• 36:48Chris Williamson?

  Way more than I've done by sitting down at my desk, trying to write something.

• 36:51Morgan Housel?

  If I had, and if I had skipped dinner and just sat in my hotel trying to work, I wouldn't have come up with absolutely nothing.

• 36:55Chris Williamson?

  Yeah.

• 36:56Morgan Housel?

  But it's so hard for people, particularly if they are employed by a company to do that. Cause if you tell your boss, hey, I need a budget to go out with, to go out to dinner with my smart friends three times a week and I need to expense that and that's going to pay off. Go fuck yourself. You need to sit at your desk and type and every boss thinks that. That's what's so hard. And I think that's also why it's very difficult to innovate within a company. Like what looks like productive work is not what's actually, what's actually productive work.

• 37:22Chris Williamson?

  I wonder whether this is good heart's law again, when a measure becomes an outcome, it ceases to be a good measure. If an organization that gets to a particular size starts to be broken down, anything that can ever be seen on a dashboard is dangerous because it removes all of the things that can't be seen on a dashboard, which for the most part are the things that are the highest outliers in terms of your return in any case.

• 37:42Morgan Housel?

  Yeah.

• 37:43Chris Williamson?

  Like we, I was telling you this idea of hidden observable metrics last night and a lot of the creativity and the biggest outlier returns that you're going to get are going to come from hidden metrics. They're going to be driven by hidden metrics, not observable metrics. Like, yeah, sure. Your editor for your book probably needs to be observable metrics guy. Like how many hours?

• 38:06Morgan Housel?

  Changes did you make?

• 38:07Chris Williamson?

  How many times did you look at this one sentence?

• 38:09Morgan Housel?

  How much red ink did you use on this manuscript?

• 38:11Chris Williamson?

  Yeah, yeah, yeah, yeah.

• 38:12Morgan Housel?

  Yeah. Jeff Bezos talked about this recently on, on, on a podcast where he's like, A lot of metrics within businesses, maybe they made sense at one point, but then people just keep using them. And you're using the same metric and people don't ask like, does this metric actually lead to success? Or is this just what we're been trained, what we've been told to do? And that's, that's a lot of it too. So like, there might be some point in your career in which calls were productive. There might be like very early in your career, like your job is to cold call, like the number of calls you did. But if you keep that for the rest of your career, like you need to change the metrics in what you're following.

• 38:43Chris Williamson?

  That's why I, I think that it is a, it's an error for people to not see the advantage of saying yes to someone that comes through town. Someone's coming through town, they're in your town. Maybe they're only in your town for like two hours. They've got a layover or something, but they're allowed to leave the airport. And maybe you can grab a coffee with them. Fucking go for the coffee with them. Like say yes to meeting new people. Dude, I had, I stayed with Douglas Murray. You know Douglas is a British political commentator, author, journalist. I stayed with him in New York, uh, January, two years ago, when I first moved out to America and I spent three days in Manhattan with him in his, in

• 39:23Chris Williamson?

  his apartment. That three day period, uh, didn't do much for my liver because he likes to have cocktails. But I shit you not, it came up with like six life-changing insights. That I still think about at least weekly.

• 39:40Morgan Housel?

  I feel like I can get that from a single book or a single podcast too. And it's a constant reminder to me that what does good look, what does good work look like for me? Sitting on the couch in my sweatpants with a book. That's the most productive thing that I can possibly do. But even after doing this for 18 years, I still feel like I'm not working when I do that. It's, it's really hard to actually switch your mindset into being, to saying that's what I need to do.

• 40:04Chris Williamson?

  I was telling you before that Rob Henderson is one of my favorite people. He was sat in that seat not long ago as well. And he, his most popular Substack article of last year, given that he's done 5,000 word, 10,000 word breakdowns of advanced socio-psychological textbooks and all this sort of stuff, was a thousand word blog post called How I Read. And he's, he got this one line in it, which is, reading is like going to the gym. You must dedicate time to it. And I think for me still now, I think, oh, reading's like somewhere between a relaxation activity, a leisure activity, and something I do when I have spare time. I don't think that about the gym. I think the gym is the thing that I make myself go and do. So. A lot of people get frustrated at the fact that they don't read enough.

• 40:48Chris Williamson?

  First off, they should download my reading list, which you can get at chriswillx.com/books and psychology of money is in it. Second thing that they should do is actually commit some fucking time to it. Like, you have to, because your reading time, and this is me shouting at me, your reading time is always going to be the important thing that gets pushed to the side by the urgent thing. There's always going to be more Slack messages. There's always going to be another fucking invoice to reply to. There's always going to be emails or a call to take or something that you need to do or a fucking dinner that you need to get ready for. And you say, no, I can't. I've got a gym session at that time. Can we do it an hour later?

• 41:20Morgan Housel?

  Yeah.

• 41:21Chris Williamson?

  No, I can't. I'm busy at that time. Like, might be a bit odd to say, like, push dinner back because I'm reading. But like, that's the philosophy that you need to have going into it.

• 41:29Morgan Housel?

  I'll tell you how this impacts me. My wife, bless her, she's wonderful. If I'm sitting at my desk typing, she's like, oh, Morgan's working. I can't bother him. I work from home. I have a glass door in my office so she can see it. If I'm on the couch reading, she's like, oh, he's not working. Can you come help me fold the laundry? That's kind of thing. Like, her bar for interrupting me if I'm reading is so much lower than if I'm typing. And I don't blame her for that. Like, what looks like you're working is not what is actually productive.

• 41:58Chris Williamson?

  It's supposed to be hard. Everything worth pursuing comes with a little pain. The trick is not minding that it hurts.

• 42:05Morgan Housel?

  There's this great scene in Lawrence of Arabia where a guy pulls out a match, lights it up and puts it out with his fingers, doesn't even wince. This other guy watching him is like, oh, let me try that. Pulls out the match, lights it up, puts his fingers on it, goes, ah, it hurts. What's the trick? And Lawrence goes, the trick is not minding that it hurts. And it's like, that is such a brilliant scene. And that applies to almost everything. Like, there is a cost to pay for almost anything. And a trick in almost any endeavor in life is figuring out what the cost is and just being willing to pay it. It's true in investing of putting up with volatility. It's true in your career where there's a Jeff Bezos quote where he says, like, look, if you can get to the point in your career where you enjoy half of it,

• 42:48Morgan Housel?

  where half of it is fun, that's like as good as it gets. Like, there's things in any job that just suck. It's like dumb, boring, admirable. And if you can get to where half of it is fun, that's great. You and I were talking about this last night in both of our careers. A lot of it is fun and very fulfilling. A lot of it is kind of just manial, just work. It's just capital W work. So I think in almost anything, figuring out the cost of it is is the most vital part of being successful over time. And you see this a lot in people's careers. You and I were talking about this last night. Take someone who was uber successful. Musk, Gates, Zuckerberg, those kind of people. If you actually drill into what it took for them to achieve that success. Michael Jordan, Kobe, LeBron, all those kind of people.

• 43:30Morgan Housel?

  The cost that they paid to get that success in their personal life, often for their health, for their mental wellbeing is off the charts. But it's so common for us to look at them and be like, I want that life. I could have, that looks like an amazing life. But when you actually factor in the cost of what it took, you're like, I don't know. I don't know.

• 43:48Chris Williamson?

  It's the thing that I've been the most obsessed by, I would say, from a other people's psychology perspective over the last two years. Tiger Woods, perfect example of this. I had an entire bit in my live show about this. James Joyce, you know, masterful author, but posthumously a long series of fart fetish love letters that he wrote to his wife were released on the internet. Like Salvador Dali, you know much about Dali?

• 44:15Morgan Housel?

  Complete maniac.

• 44:17Chris Williamson?

  His parents gave birth to a child 10 months before him that they called Salvador. And then almost immediately got pregnant again. That one died. They were adamant that Dali was the reincarnation of his dead older brother. That's how you entered the world. When he was a child,

• 44:33Morgan Housel?

  No pressure.

• 44:34Chris Williamson?

  Throw himself down the stairs. He found out that he was a masochist very early in life. He would throw himself down the stairs for fun. When he was giving a lecture, he was suffocating inside of a deep sea diving suit that he had to be wrenched out of mid talk while he was giving a lecture. He married a woman who was married at the time. They were both married. They both separated from their current partners, got together. And then Dali immediately started to treat her as halfway between a god and royalty. So he bought her a castle and then would send formal letters of request asking to visit her in the castle that he bought her. And he would refer to her as his muse and all the rest of it. But All of those things contributed to.

• 45:18Morgan Housel?

  That's how you end up painting like melting clocks and then stuff like that now.

• 45:21Chris Williamson?

  As brilliant as he was, Da Vinci didn't do Dali and Michelangelo didn't do Dali. The only way we get Dali is by Dali being the throw myself down the stairs, lock myself inside of the deep sea diving suit, buying my future wife a castle person. That's the only way. There's a quote from Alex that I spoke to him about the start of last year. It's one of my favorite ones. Whenever I get to a low point where I think, why do I even bother? I just try to remind myself, this is where most people stop and this is why they don't win. A reminder for the gladiators in the arena who feel beat up and scarred with no hope in sight. Building a business is hard. Hard feels shitty. This is what hard feels like, and this is why most people can't do it, but you can.

• 46:03Chris Williamson?

  This is what hard feels like was in my memo that I sent to the team this year. It's something, he told me this great story about when pledges, he was in a fraternity at college and he was like high up or whatever, the pledges were whining about what they were being made to do. And he said, right, I know everyone's having a pity party here. So he calls them around and he says, look, who here thought that this was going to be easy? No one puts their hands up. He's like, who here thought that this was going to be hard? Like everyone puts their hands up and he goes, this is what hard feels like.

• 46:34Morgan Housel?

  No, I think in most endeavors in life, people perfectly understand the relationship between price and quality. You want a nicer car, it costs more, bigger house, it costs more. But that like understanding goes out the window when you're talking about career success or career fulfillment or personal health, things like that. Like that, the, the relationship just kind of breaks down in their own mind. But it, it doesn't go away. Like the higher the success, the higher the cost. I love reading biographies of entrepreneurs, of generals, whoever it might be. With very few exceptions, do I finish the biography and think to myself, I want that person's life? What I think is I'm glad they existed. I'm so glad the world had that person that we can all benefit from. But though the crazy success comes with a cost that very few people, including most of the time myself,

• 47:19Morgan Housel?

  are not willing to pay.

• 47:21Chris Williamson?

  How can people not mind that it hurts more?

• 47:25Morgan Housel?

  I think when you talk about someone like Dali, it's like, it's ingrained, it's ingrained in them. I think some, I think whenever you have somebody like Musk, Zuckerberg, Jordan, Tiger Woods, there was not a decision that they made. They had to, they had to pursue. It's a compulsion.

• 47:43Morgan Housel?

  Several years ago, I heard Patrick O'Shaughnessy say that the single word that he would describe for most successful people was not driven, it's not motivated, it's tortured. That they wake up every morning, just like, I am tortured at the success that I have not achieved yet. And I have to, I have to go do this. I have to go work 24 hours. So some people I think are born with it and some people are not, which is why like the success is so stratified. Once in a while, I think you have someone who was like a middling success and became a founder at age 50 and knocked it out of the park, but that's extremely rare. I think it's usually people who, for whom this is just in their blood. They have to do it.

• 48:19Chris Williamson?

  Yeah. Again, from Alex last year, he said, champions are broken. People look at champions and try to find something that they have that everyone else doesn't have, but it's the wrong way around. Champions don't have something that everybody else does have, which is an off.

• 48:32Morgan Housel?

  A sense of, a sense of being fulfilled.

• 48:34Chris Williamson?

  Correct.

• 48:35Morgan Housel?

  And saying like, that's enough.

• 48:36Chris Williamson?

  What was the Donner Party?

• 48:39Morgan Housel?

  The Donner Party was, this is amazing. I see for you, you, you as, as a Brit, probably never heard of the Donner Party. Is that right?

• 48:44Chris Williamson?

  No.

• 48:45Morgan Housel?

  So back in the, in the 1800s, there was a pretty wealthy family, the Donner clan. They were in Chicago, who were moving west, as a lot of people were. And the Donner, like they're very, very wealthy, but they were like driven to the, the wealth and the opportunity and the prosperity of California, which is the new land during this period. So they start making it out west. And this is of course before railroads are making out on wagon train. And they start off, there's a very big party. It's more than 150 of them that start off. And at one point they meet, I think they're in the middle of Nevada and they meet this quack who promises them a shortcut. Who says like, hey, like the route between here and to pass through the Sierra Nevada mountains is pretty tough, but I know a shortcut. You can make your way around here. The shortcut turned it out, ended up being completely bogus and it was, it was nonsense.

• 49:30Morgan Housel?

  They eventually had to basically backtrack back to where they originally started from. That delay made it so now they were going to cross the Sierra Nevada mountains in the middle of the winter, which is not when you want to be doing it. You want to cross it in the summer or the fall before the snow comes. They eventually hit the Sierra Nevada mountains during what was the biggest winter in decades, the biggest snow dump. They got completely stuck and they had to resort to eating each other, cannibalism. And it's a, it's absolutely horrific story. I mean, one of the details that sticks out from there that just shows like the plight that they were in when they were eating each other, and there were still dozens of them alive at this point. They would label the meat that was harvested to make sure that you did not have to eat your sister or your mother, that you were eating somebody else's. I mean, the plight that they went through

• 50:14Morgan Housel?

  was extraordinary. And two things have always like stuck out for me from the Donner Party. Most people just focus on that element of the story. One of the things that sticks out is that they were, they were already rich. They were not going to California to because they're like, we're broke and we want new, they were, they were just like seeking more. They were already crushing it. The other was they were in this situation specifically because they were tempted by a shortcut. And look, I'm all for efficiency. I'm all for doing things the right way. But so many shortcuts are just cutting corners that's eventually going to backfire on you. And they were like such a profound example of that.

• 50:47Chris Williamson?

  The safest way to get what you want is to try to deserve what you want. That was from Munger. What's that mean?

• 50:53Morgan Housel?

  He, he, he mentioned this in several different contexts. The biggest that he mentioned it in was love. If you want to be loved, the way that you get that is to deserve to be loved. Uh, there's another quote from my friend Brent B. Shore, when he's like, he says something along the lines of, "Marriage works when both you and your spouse devote your life to serving the other person and expect nothing in return." So you wake up and you're like, "I'm here to serve my wife and I don't expect her to serve me back." If both of you do that at the same time, you're both serving each other without expecting anything else in return, it's magic.

• 51:27Chris Williamson?

  Think about what the opposite of that is. Neil Strauss said this the other week.

• 51:33Chris Williamson?

  Unspoken expectations are premeditated resentments. Unspoken expectations.

• 51:39Morgan Housel?

  Premeditated. That's exactly it. I think that's Brent's exact point said more succinctly. That's, that's really what it is. So I think, you know, now, and I think it's true for a lot of things. If you want to be wealthy, like you need to deserve it. If you want to be a successful entrepreneur, you need to deserve it. No shortcuts. It's all just like find the price and pay it.

• 51:56Chris Williamson?

  Keep running. Most competitive advantages eventually die.

• 52:01Morgan Housel?

  I think there are so many examples of this. One of the most interesting is Sears, which if you go back to the seventies and eighties, no other company in America had the moat that Sears did. It was completely unstoppable.

• 52:13Chris Williamson?

  What Sears for the Brits?

• 52:14Morgan Housel?

  Oh, are you kidding me? Come on. Sears was kind of the, it was, it was the most successful retailer, mostly clothes and things like that, department store, but they also sold, you know, washing machines, that kind of thing. They're actually still around.

• 52:26Chris Williamson?

  It's like a Walmart type thing.

• 52:27Morgan Housel?

  Yes, but less big than, you know, less, less all encompassing than Walmart. But they were everywhere. They were so dominant back in the day. Nobody could touch them. And they got so big that they started by, they bought Discover Card and like Dean Witter stock. As they started like moving into all these other areas. No, it was truly the Walmart of its day, or even like the Apple of its day. I was just like, nobody compete with this. And then they lost everything and went bankrupt and then lost it. And if you dig back into what happened of like, they became successful because they were so scrappy and so terrified of competitors. That's why they became successful. As soon as they got big, it all went to their head. And they were like, we're Sears. Nobody compete with us. They stopped innovating. They ignored this upcomer that was chasing them called Walmart, completely ignored it.

• 53:12Morgan Housel?

  And by the time that they realized what had happened, it was way too late. They were gone. And I think that's actually a very common story that it happens in individuals' lives as well, where the reason that you are working so hard is so that eventually one day you will achieve a level of success in which you don't have to work so hard anymore. That's what's motivating you is the dream that you can one day relax. So when you become successful, you justifiably think, I can stop working so hard. I don't need to grind as hard anymore. And then the moment you think that and it's justified, you think it's justified, you, you lose what actually made you successful to begin with. And then it's, that's the downfall. And you see like, there's this amazing interview many years ago with Mike Moritz,

• 53:53Morgan Housel?

  who is the head of, of Sequoia, the most successful venture capital firm that's ever existed. And Charlie Rose asked him, he said, why has Sequoia been so successful for 40 years? Not over one market cycle. You've dominated for 40 years. And Mike Moritz said, we've always been scared of going out of business.

• 54:12Morgan Housel?

  And like, look, if there's anyone in Silicon Valley who has the right to say it's because we're smart. It's because we're so good at what we do. He has the right to say that, but he didn't say that. He said, we're terrified of going out of business. And that's like that, like, like you never let your guard down. What made you successful? You never let go of that.

• 54:30Chris Williamson?

  Isn't a business book, only the paranoid survive?

• 54:31Morgan Housel?

  That's it. Exactly. And, uh, you know, there's, I think there's lots of different versions of this. I read recently that the unofficial motto of Nvidia, their unofficial corporate motto is we are always 30 days from going out of business. That's what they tell themselves in their meetings. We're always 30 days from going out of business.

• 54:49Chris Williamson?

  Hanging over their head.

• 54:49Morgan Housel?

  Yes, but I think that's why there's, that's at least one of the reasons why they're so successful.

• 54:53Chris Williamson?

  Well, me and you were talking about this last night, and I think it's a brilliant frame, and I want to spend more time building it out. Serotonin Morgan versus dopamine Morgan. And I think that the only the paranoid survive business model is a dopamine company, not serotonin company.

• 55:12Morgan Housel?

  Yeah.

• 55:12Chris Williamson?

  Right? That is very vigilant, very anxious, very on edge. Making sure that everything is scrutin, heavily scrutinizing all of the different options and keeping abreast of, of competitors and, and, you know, having these sort of underlying resentments, but also knowing that I can't really bring them up because that's also not going to be good, but I'm going to fucking hate them in any case.

• 55:30Morgan Housel?

  Yeah.

• 55:31Chris Williamson?

  It's that energy. It's that lean in. It's that tentative sort of very watchful energy. And I think that especially if you are somebody that's close, not only close to the operating of a business, but also emotionally invested in the operating of a business, or if your professional life and your personal life have blended in a way, it can be very difficult to not have what is effective professionally curse you personally.

• 55:56Morgan Housel?

  Yeah.

• 55:56Chris Williamson?

  Right? It is very, very good for you to be on edge in that manner.

• 56:02Chris Williamson?

  Very good. It is useful and effective as a business to be on edge in that manner.

• 56:07Morgan Housel?

  Yeah.

• 56:08Chris Williamson?

  It is catastrophic and destructive for you to be on edge in that same way in your private life.

• 56:12Morgan Housel?

  And what's so hard is that most people, when they make a mistake, don't know it. They're blind to it. Whereas cutting back because you've become successful is a cognizant decision. You know that you're like, I, because I've become successful, I can now sleep in. I can now work fewer hours. You know you're doing it. You think it's justified. But what you are blind to is like what that's actually going to do to your career. And someone tweeted this just last week. They said, when does a startup lose its magic? And the precise moment when it happens for every one of these companies is when the CEO stops building the product. When the CTO stops coding, when the chief marketing officer is not writing the, the, the copy anymore. It's like, once you've become so big that the senior executives are detached from actually doing the work.

• 56:57Morgan Housel?

  When the musician stops writing their own songs. I know authors who, when they become big, they have so much pressure and incentive to write more books, that they basically hire ghostwriters or at least people to help. And that's when you lose the magic. You're not doing it yourself anymore.

• 57:11Chris Williamson?

  The same thing is so true in the world of podcasting and specifically YouTube, YouTube more than podcasting.

• 57:20Chris Williamson?

  The creators that take their eye off the ball with guest booking, guest research, scheduling, titles, thumbnails and branding.

• 57:29Morgan Housel?

  What actually matters.

• 57:30Chris Williamson?

  The longest points of leverage, like if I, I spend six hours every single week on calls, just doing copywriting for seven videos. That's it.

• 57:40Morgan Housel?

  Yeah.

• 57:41Chris Williamson?

  So it's an hour of video. We spend an hour of video to come up with the right title and the right thumbnail, because it's one of the longest levers that we have.

• 57:47Morgan Housel?

  Yeah.

• 57:47Chris Williamson?

  Every single video that's ever gone out, I've touched every, and I'm like, getting to the stage now. I was telling you this last night, I want to operationalize things. I'm tired. Like, I don't get to just do the things that I used to do. But I also realized, and this is Leila Homose, Alex's wife. I asked her, what are the things that you should outsource and what are the things that you shouldn't? One of the first things that she said, you shouldn't outsource the thing that makes the money or the impact.

• 58:10Morgan Housel?

  Yeah.

• 58:11Chris Williamson?

  Yes, yes, that's good. Outsource everything else. Fucking get a maid, get a cleaner, get a gardener, get a fucking driver, get a whatever you need. But don't outsource the thing that you're there to do.

• 58:22Morgan Housel?

  Yeah, I think you see this a lot in in investing, where you have someone who's a very talented investor, very good at picking stocks, finding the right business, and then they launch a fund. What does launching a fund entail? Half your time is going to be fundraising, half your time is going to be accounting, HR, you gotta hire people, and then you're completely detached from what actually made you good to begin with. And that is so common in any business. I think it's, I think it's, I think if you, identifying that point, if you can't effectively outsource those kinds of things, I think if you are the entrepreneur, the CEO, whoever it is, and you get to a point where you're like, hey, I've become really successful and I I became this successful because I wanted to step back. You need to be honest with yourself and detail and remove yourself from the situation.

• 59:06Morgan Housel?

  The people who fall into problems are like, I grinded for 20 years, now I'm successful, but I'm not going to leave this business that I built. I'm going to stay here and just become fat, happy and lazy.

• 59:17Chris Williamson?

  Yeah.

• 59:17Morgan Housel?

  That's when it eventually just crumbles.

• 59:19Chris Williamson?

  Yeah. The wonders of the future. It always feels like we're falling behind and it's always easy to discount the potential of new technology.

• 59:28Morgan Housel?

  It's so like, very rare is there a single new invention that is amazing in and of itself. It's usually that you have a small invention and then 10 years later, another small invention, 20 years later, another small invention, and those things come together and that's what creates something amazing. Jeff Bezos talked about this recently where he was like, when he launched Amazon in the 1990s, he did not need to build a payment system. It already existed. It was called Visa, Mastercard. He didn't need to create a shipping system. It already existed. It was UPS. But like, he took all of those things and combined them and built on top of them. And it's true for a lot of innovations of like, I mean, the the most like stunning example is Thomas Edison did not invent the light bulb.

• 1:00:10Morgan Housel?

  It was first invented by a guy named, uh, name Humphrey Davies, who was a Brit, who created something that looked exactly like the light bulb. I think 20 years before Thomas Edison. The difference was that light bulb that he built, it was impossibly bright. You would go blind by looking at it. And and it would only stay lit.

• 1:00:29Chris Williamson?

  Perform, what can I say?

• 1:00:30Morgan Housel?

  And it would only stay lit for like five seconds. What Edison did is he moderated the intensity and he lengthened the endurance of the light bulb. That was incredible, but let's not pretend that he built that flaming bulb from scratch. He didn't. He took what other people had done and built on top of it. And it's true for almost any invention of like, obviously, uh, obviously Henry and Ford did not invent the engine. He didn't invent the wheel. He just like combined all of these things. So whenever a new invention comes out, I think it's very easy to be like, what is this useful for? And a lot of times the answer is like, we don't know, but someone like this is going to be something that somebody combines with other things in the future that's going to become something incredible.

• 1:01:11Chris Williamson?

  You've got a typical path of how people respond to what eventually becomes world changing new technology. First, I've never heard of it. Then I've heard of it, but I don't understand it. I understand it, but I don't see how it's useful. I see how it could be fun for rich people, but not me. I use it, but it's just a toy. It's becoming more useful to me. I use it all the time. I could not imagine life without it. Seriously, people lived without it. It's too powerful and needs to be regulated.

• 1:01:37Morgan Housel?

  And it's true for almost every like big invention. The two that are most interesting to me was the invention of the car and the airplane, which when both of those came out in the early 1900s, the first reaction to those was like, I don't understand why anyone would want this. The first car was so inferior to the horse and the first plane was so inferior to the train. So everyone looked at it and they're like, what the hell is the use? And then it was like, oh, I see. It's a rich person's toy. If you're, if you're a zillionaire, you're going to have a car that you can putter around town with. I kind of get it. And then it becomes better and better. Both the car and the plane, the first uses that people saw for it was like, oh, we could strap a machine gun to this and use it in the army. Virtually nobody saw, even the people who worked in those industries, what it would

• 1:02:22Morgan Housel?

  become, which was like good for transporting people. And like, nobody saw with the car. They're like, oh, this is going to open up a new form of living called the suburbs and people can drive to the city now. Nobody saw those things coming. It was a very long path. It usually takes 10 to 20 years at least before people are like, oh, Now I get it. You saw this too. There's so many classic examples of in the 1990s of articles written in Time Magazine about like,

• 1:02:46Chris Williamson?

  The internet.

• 1:02:47Morgan Housel?

  Why would anyone want to use the internet? How could anyone possibly like lug around this thing called a laptop? Nobody's ever gonna do that. And it's easy to poke fun at those and you should poke fun at them. But it's actually common for virtually every new technology that you cannot fathom what it's gonna eventually become.

• 1:03:03Chris Williamson?

  How should we interpret this consistent trend? Should we be less quick to cynicism and skepticism around things?

• 1:03:13Morgan Housel?

  It's also very common historically that people say, we haven't had a big invention in 30 years. We used to innovate, but over the last 30 years, what can you think of that we've actually created? That's a very common view. And usually what's happening is that it's not that we haven't invented in 30 years. It's that it takes 30 years for us to recognize any invention. So we look back today and we're like, yes, the internet was big, but the internet came about 30 years ago. But if you go back to the 1990s, it was like, no, we really haven't invented much in a long time. Like, it's always that lag in how long it takes you to understand how big something is gonna become. And you can imagine that happening in 30 years from now. That in 30 years from now, we're like, oh, we haven't invented anything in a long time. But in 2024, we came up with the whatever it would be.

• 1:03:57Morgan Housel?

  That that is such an obvious new technology. Cause when we were inventing the car and the airplane or the transistor, the radio or the internet, very few people knew at the time what it was gonna become. It takes decades for you to understand what it's actually gonna be.

• 1:04:12Chris Williamson?

  Harder than it looks and not as fun as it seems. The grass is always greener on the side that's fertilized with bullshit.

• 1:04:17Morgan Housel?

  Which is a wonderful quote. I can never find who originally said it. I can't take credit for it, but it's such a great quote. I think there's a truth in life that everything is sales. Everything is sales and it's done in an innocent way. But a big part of this is that people tend to exaggerate and advertise what they're good at and hide the hard parts, hide the flaws. And it creates this in this view among virtually everybody that your success was much easier than it was. This business is better run than I think it is. I was talking to a friend a couple of years ago. Who was like, oh, this rival company is so much better run than the company I work for. They're so much more efficient, so much more organized. And I'm like, how do you, how do you know that?

• 1:05:02Morgan Housel?

  And, and basically what it is, is like from the outsider's perspective, everything looks like it's easier and, and better run than it actually is. But if you have the insider perspective of how the sausage is made, you realize like how inefficient virtually everything is. And so that's, I think that's, that's a big part of life is just like realizing that success is harder than it looks. We, we, we talked about this earlier with Tiger Woods, Colby Bryant, Michael Jordan, all these people, like if you actually dig into what their life is, it's infinitely harder than it looks.

• 1:05:31Chris Williamson?

  Did you see Elon on Lex where he said, my mind is a storm. Most people would want, think that they want to be me, but they don't, they don't know, they don't understand.

• 1:05:39Morgan Housel?

  Because what people look at Elon and they're like, oh, richest man in the world. He's got a Gulf Stream. He's got big homes. I don't even think he actually does, but like he, he has, he's worth a quarter of a trillion dollars and can do anything he wants. That seems like an amazing life. Like, no, I think if you actually dug into it, I think Elon is in like probably the bottom, I'm making this up, 20% of like mental health in society.

• 1:05:58Chris Williamson?

  Tortured.

• 1:05:58Morgan Housel?

  You know?

• 1:05:59Chris Williamson?

  I had this idea called the cookie test that I did on stage during my live show. And it's kind of about this, but from the way that we perceive other people. So imagine that there's a cookie here and I decide that I'm going to make the decision about whether or not to eat it. When I do that, this unholy war begins inside of my mind between, you know, there's platoons and one of them's got a dragon and there's a trebuchet and there's the, my old PT teacher, Mr. Henderson from year nine, saying you're a cookie eater and you've always been a cookie eater and you're always going to be a cookie eater. And then after a little while, the better version of me succeeds and I turn away. That's what I saw internally. What you saw was some bloke stare at a cookie for a while.

• 1:06:45Chris Williamson?

  And then turn away, hungry and sad.

• 1:06:47Morgan Housel?

  Yeah.

• 1:06:48Chris Williamson?

  From the outside, everybody else look like slick rational agents. And from the inside, we look like wavering idiots.

• 1:06:54Morgan Housel?

  Yeah.

• 1:06:54Chris Williamson?

  Because the asymmetry in what we observe of our own uncertainty and what we perceive of someone else's uncertainty is so asymmetric. I also had this idea about how people going through breakups or people that feel like they've been hard done by, or maybe they're whistling after a friend or a partner that they used to have and were able to romanticize, especially people that have scorned us or that have left us. There's something sort of particularly alluring in their aloofness, right?

• 1:07:24Morgan Housel?

  Yeah.

• 1:07:25Chris Williamson?

  But I think it's something that we can all take. You can use this asymmetry to your advantage as well. Think about how much more deep and dexterous and nuanced and subtle and finessed your thoughts are than even the person you know the best on the planet, your twin brother's thoughts are that you know of, right? It's a one ten thousandth, one millionth, right? Of what you have observed of yourself. So if you are someone that's struggling with the wistfulness and I'm never going to be able to find anybody like them, there is also a very easy argument of they're never going to be able to find anybody like me.

• 1:08:07Morgan Housel?

  Yeah.

• 1:08:08Chris Williamson?

  Because you only see this very rough hewn version of them, whereas the depth that you get of yourself is so much greater.

• 1:08:14Morgan Housel?

  There's also almost the opposite of this, which is Daniel Kahneman's observation, that it's much easier to spot other people's flaws than your own. Even though you're very aware of what's going on in your head and your thought process and whatnot, it's very easy for me to look at your decisions and say like, oh, you're missing this and you're incomplete on this. You're making a bad decision here. But you can justify your own very, very easily because you know the internal dialogue in your head that's justifying your decisions. I'm doing this because of this reason and whatnot. Here's why I'm doing it. But for when I'm watching you, I only see the actions that you're taking. And I can just judge you much more objectively in that measure. But I think if you. Could see the thoughts going on inside of everyone else's head.

• 1:08:56Morgan Housel?

  You would see that the world is a thousand times crazier than you think it is. You'd see people are a thousand times more depressed than you think they are. They're a thousand times more creative than you think they are. They're a thousand times more evil than you think they are. Because what they're actually putting forth in speaking and the actions that they're taking is such a tiny percentage. It was actually going on in their head.

• 1:09:16Chris Williamson?

  We had movies a long time before Neuralink or Elon Musk were even even sort of objects in the pop culture. But like Minority Report, you know, the ability to be able to see what someone is thinking or be able might be prepared to do in future.

• 1:09:30Morgan Housel?

  Yeah.

• 1:09:30Chris Williamson?

  To be able to predict that and then go after them. Was it Minority Report? No, it wasn't. What was the thing with Tom Cruise? Where they could see into the future? And he had that big screen. There's people screaming into their iPods at the moment.

• 1:09:43Morgan Housel?

  I don't know, but it sounds good.

• 1:09:44Chris Williamson?

  It's great. Anyway, good movie. My Minority Report was the one with uh uh fucking Matt Damon, right? Why do you spend more time watching movies?

• 1:09:53Morgan Housel?

  I'm reading books.

• 1:09:54Chris Williamson?

  Stop it. Stop it. Um, anyway, uh, that's gonna kill me that I can't remember. Anyway, that movie.

• 1:10:03Chris Williamson?

  The ability of what we have at the moment, people are only culpable for the actions they take and the things that they say, not the thoughts that they have. There's no such thing as thought crime at the moment. And you can say, we live in a world that senses and all the rest of it. It's like, yeah, but if you keep your thoughts literally as fucking thoughts, no one knows. So.

• 1:10:19Morgan Housel?

  Imagine if you got thought cancelled.

• 1:10:20Chris Williamson?

  But that's my point. My point.

• 1:10:22Morgan Housel?

  Everybody would be cancelled.

• 1:10:23Chris Williamson?

  Yeah. That's where the toxic compassion thing that I was telling you about last night comes from, which I believe is. Performative empathy is a front. It's a very shiny veneer that nasty people put over the front of their meanness to appear nice.

• 1:10:40Morgan Housel?

  Yeah.

• 1:10:41Chris Williamson?

  It's like a small gold bar that's been beaten so thin that it's in gold foil. And it gives the illusion of something that's glittery. But if you poke it a little bit, it's just a hole through the other side.

• 1:10:52Morgan Housel?

  Yeah, that's a great analogy. I like it.

• 1:10:55Chris Williamson?

  Incentives, the most powerful force in the world. When the incentives are crazy, the behavior is crazy. People can be led to justify and defend nearly anything.

• 1:11:04Morgan Housel?

  I think people underestimate the extent to which the boundaries of their morality, the boundaries of the actions that they're willing to take can be changed so easily if their incentives change. I mean, I saw this during the financial crisis of 2008, when people after the crisis, and in a somewhat justifiable way, would say those greedy Wall Street bankers who crashed the economy. I'm not saying that wasn't completely justified, but what almost every one of those critics didn't understand is that if they were a 25-year-old mortgage broker at Goldman Sachs, at Lehman Brothers, and your boss said, "If you package these subprime bonds, we'll pay you $4 million this year", you would do the same thing. You'd have done the exact same thing.

• 1:11:46Chris Williamson?

  It's Nazi concentration camp guard, but in reverse.

• 1:11:48Morgan Housel?

  Yes, yes. And I think there's so many stunning examples of this, of when the social incentives, the tribal incentives, to do something that is objectively bad, but you can easily rationalize it by being like, "Well, this is the incentive for me to do the right thing." There's this documentary about El Chapo in Mexico, the drug lord. He was a pretty vicious, terrible guy. And they're going to this rural town in Mexico, and they love El Chapo. All the people are just like, "Chapo, Chapo, Chapo, he's so great." And they talk to him, and they're like, "Well, yeah, like, we live in absolute utter abject poverty." And Chapo would come in and build us schools, build us roads, give us food, pay for our children's wedding. We love the guy. Absolutely love the guy.

• 1:12:31Morgan Housel?

  So when the incentives are there to overlook some element of someone's behavior, their personality, people just suck it up right away. Another stunning example of this, there's a book called What We Know, no, sorry, What We Knew. And it interviews German civilians after World War II. And these are German civilians who experienced, who are in Nazi Germany in the 1940s. And the, the book is just interviewing these people, saying, what did you know? What did you see? What did you know about the Holocaust? What did you see about what was going on? And they're interviewing this German civilian woman. And she says, oh, you know, when Hitler came to power in the 1930s, everybody embraced him. And the interviewer is like, why? Like, how could you embrace this monster? And she says, well, you have to understand, in the 1920s, I'm paraphrasing her. The German economy fell apart.

• 1:13:16Morgan Housel?

  They had hyperinflation. Nobody had anything. Hitler came along and said, I have a better way. We're going to give you jobs. We're going to give you prosperity. And the woman says, in that situation, you do not say to that person, no, I don't want that. In that situation where you are in a desperate situation and someone come along and offer what looks like help? You take it. And that's, I think it was, I think that was a very honest description of what happened in the situation. That when the social incentives are to embrace something that is otherwise wicked and evil and terrible. Like millions of people can embrace it if their incentives for one aspect of their life are, are to embrace it. What about Heaven's Gate? Heaven's Gate, I think, so Heaven's Gate was the cult. They eventually all killed themselves. They all committed suicide.

• 1:13:58Morgan Housel?

  But there's this amazing part of the Heaven's Gate cult where at what point? At one point in their, um, in their cultish behavior, they believed that there was a spaceship that was going to come save them. Come down, they could all board the spaceship. Everyone else on earth was going to die, but they would be saved. They're waiting for the spaceship to come. And they go to a store and buy a telescope so they can see the spaceship coming in. They go out, point it up to the night sky, looking for the spaceship. Don't see anything. No spaceship. They bring the telescope back to the store where they bought it. And they said, this telescope is clearly broken. It doesn't work. And the store owner says like, well, what happens to us? It looks like it works to me. And the Heaven's Gate guy says, it doesn't work because it doesn't show the spaceship. So it clearly doesn't work.

• 1:14:42Morgan Housel?

  The spaceship is obviously coming, but I can't see it. So the telescope is obviously broken. Like when you firmly believe whatever kind of bullshit that you're going to believe. Any evidence that's going to come that to show you that you're wrong can easily just be purely dismissed. And that's like a humorous, I mean, it's kind of a sad, extreme example. But virtually everyone falls for this in some way where like, if you believe X, then evidence that X is not true can easily just be pushed away in a second. You see this a lot in the economy where like, if you are a pessimist and you're like, there's going to be a recession, we're in a recession. And then GDP data comes out and you're like, oh, it's actually pretty strong. By the way, that happened this morning. So many pessimists will be like, well, you got to dig into the numbers and see like, you can easily spin anything you want

• 1:15:26Morgan Housel?

  in order to justify the decision that you've already made.

• 1:15:29Chris Williamson?

  Pessimists get to be right and optimists get to be rich.

• 1:15:32Morgan Housel?

  I think that's, that's by and large right. There's also a thing where a lot of economic pessimists, pundits, they can be wrong forever and they're never penalized for being wrong because they're giving somebody a product that they really want. And a lot of what it is, is I think at its core, I think there are a lot of people in the economy who are feel inadequate about their own position in the economy. And they literally fantasize about other people suffering economically.

• 1:15:57Chris Williamson?

  A transfer of wealth from the people who have to the people that they feel like don't.

• 1:16:01Morgan Housel?

  About a stock market crash because if other people got poor, they would feel better about their own situation. And I think that is why economic pessimism in the punditry space is so like, when it comes out, people are like, yes, that's what I want. Like, tell me the economy is going to end in hell. Makes them feel better about their own situation.

• 1:16:18Chris Williamson?

  Now you get it. Nothing is more persuasive than what you've experienced firsthand.

• 1:16:23Morgan Housel?

  I read this thing, this is a pretty common that in military boot camps, this was during World War Two, but I think it applies to any era. There would be so many soldiers who after boot camp would be filled with bravado. And they'd be like, I'm going to go get those Nazis. Like when I get out there, I'm going to come guns blazing. Like, watch out, here we come. And then the moment they are put on the front lines and a bullet whizzes over their head, they are terrified out of their minds. There've been some studies that showed, and they're very controversial about whether this is actually true, that only a small fraction of the soldiers on the front line

• 1:16:55Chris Williamson?

  ever fired their gun.

• 1:16:56Morgan Housel?

  pulled their trigger. So many of them. And who's to say it would not be me or you either?

• 1:17:00Chris Williamson?

  I can't remember what it's called. There's a particular type of firing. That it's like non-mortal firing or something like that. So they would do it, but they'd fire just in the air.

• 1:17:11Morgan Housel?

  In the air because they couldn't.

• 1:17:12Chris Williamson?

  And over the top.

• 1:17:13Morgan Housel?

  And I do not, this is not a criticism in the slightest, that even when you're facing a Nazi soldier, Japanese soldier, whatever it would be, to stick your gun at him and pull the trigger, you just say, I don't have it in me. I can't do that. I that's not, I think there's a very good chance that I maybe would fall in that situation too.

• 1:17:28Chris Williamson?

  So this is one of the interesting, I guess, incentives, going back to one of the lessons we learned about earlier on of war. Yes, it would be hard, especially if you hadn't gone through the training. But then you go through the training, which is basically trying to remove the type two thinking and just put you in type one. Like you see enemy bang, you see enemy bang, like it's not person, it's response, right? They're trying to drag it out of that deliberate thinking and into that responsive thinking. But kind of like the ever escalating ladder of nuclear weapons that you were talking about before. If my friend that I've been through bootcamp with just gets shot and is either dead or injured, that's going to be pretty motivating for me to think, first off, I'm in that kind of a danger and it's either them or me. And secondly, fuck you. You just shot my friend.

• 1:18:13Morgan Housel?

  Yeah.

• 1:18:14Chris Williamson?

  So you get this almost, I would guess, if you could track this, if you could study this appropriately, I bet that you will find the lethality and rate of firing of soldiers on the front lines will probably follow a U shaped curve.

• 1:18:32Morgan Housel?

  Yeah.

• 1:18:32Chris Williamson?

  There will not be some, then people will begin to die, threat will begin to increase, people will begin to fire more and more and more and more and more and more. And then it will tail off on the other side.

• 1:18:41Morgan Housel?

  And at some point, and this is a nuance that maybe doesn't even matter, but you're not firing to kill the enemy, you're firing to save yourself.

• 1:18:47Chris Williamson?

  Right.

• 1:18:47Morgan Housel?

  It's just like, you're in a situation where it's like, it's either you or me. And I'm not, and this is not about like the strategy of what we're doing. This is just a pure survival mechanism right now. But I think, I think the broader point is like, you do not know how you're going to respond to a situation until you've experienced firsthand. And the military is an extreme example, but this is true for like bear markets in the stock market. So common for people to say, if the stock market fell 50%, I would view that as an opportunity. I would back up the truck and buy more. And then it actually happens. And they're like, oh, this sucks. I'm terrified. I don't want anything to do with this. It's like way easier to quote Warren Buffett than it is to actually take those actions in the heat of the moment. A lot of this is because if I were to say, How would you feel if the stock market fell 50%?

• 1:19:30Morgan Housel?

  By and large, you imagine a world in which everything is the same as it is today, except stocks are 50% cheaper.

• 1:19:36Chris Williamson?

  Yeah.

• 1:19:37Morgan Housel?

  And in that world, you're like, oh, it's great. It's an opportunity. But the reason the market might fall 50% is because

• 1:19:42Chris Williamson?

  It's a pandemic.

• 1:19:43Morgan Housel?

  There's a pandemic, there's a terrorist attack. And in that situation, you're like, how would you feel if the market fell 50%? Because it's the day after September 11th and everyone on TV says there are more attacks coming that are going to impact you. In that situation, you might be like, that's not such an opportunity anymore. That's always what happens.

• 1:20:03Chris Williamson?

  Time Horizons, saying, I'm in it for the long run is a bit like standing at the base of Mount Everest, pointing to the top and saying, that's where I'm heading. Well, that's nice. Now comes the test.

• 1:20:13Morgan Housel?

  You see this so often of like, particularly in investing, but this happens in a lot of areas in life where people are like, I'm a long term, I'm in it for the long term. I'm a long-term investor. You're like, great, that's a good mindset. But the long-term is just a collection of short terms. And you need to experience all, like, all of those short terms. So a long-term investor does not get to ignore the short-term volatility, the short-term recessions, the short-term bear markets. You have to experience and endure all of those. So I think in investing, very often, saying that you are long-term is a cop-out. Just saying, I don't need to, to, to like, manage my behavior and my expectations over the next 12, 24, 36 months, when you do. A lot of this too is like, maybe you, the investor, the fund manager, is a long-term

• 1:20:57Morgan Housel?

  investor, but are your clients, is your spouse, are they going to put up with having a shitty year? Maybe you're willing to do it, but is your business partner willing to do it? Like, saying you're long-term is very different than actually being a long-term person.

• 1:21:10Chris Williamson?

  Hmm. How can people make the long run easier? If there's so many, you are Mr. Compounding, right? If there are so many gains to be accrued by playing long-term games with long-term people and long-term investments and piecing into the S and P and not being that fussed about what happens and looking at signal, not noise and all the rest of it. How can people improve their long-termism?

• 1:21:33Morgan Housel?

  One of the things, like, one of the ways I've subtly changed how I think about investing over the last couple of years is a bigger realization of how much of successful investing is nature and nurture, leaning towards the nature side. I think some people are just wired to get it and some people are not. Charlie Munger made this point where he says, when young people learn about investing, they either understand it instantly or never at all. And it's one of those two. I think that's a little too black and white, but I think he's directionally correct, that some people just get it. You and I were talking last night about like, what is the genetic soup that you're born with? You have no control over it, but yours is different than mine. It's different from everybody's. And so I think some people are much more able to think long-term than others. I'll tell you a little

• 1:22:15Morgan Housel?

  story. My brother-in-law is a social worker, works with very impoverished families, homeless families, children who are in terrible situations. And he was talking to this family at one point, a very impoverished family, and he said something along the lines of saving your money for the next week or the next month. And they laughed at him and they said, oh, you're a future thinker. And he's like, what? And he said, you're a future thinker. They said, you got to understand, when you're in our situation, you do not have a time horizon that exists beyond 24 hours. There's no such thing as next week. We don't know where we're going to get dinner tonight. There's no next week. We're just like, our field of vision is 24 hours. And I think that's an extreme example, but there's a lot of people like that of like, when, if you say like, oh, you shouldn't invest for

• 1:23:00Morgan Housel?

  the next 30 years, they literally cannot envision what next month is going to look like. So why would like next 30 years is completely and utterly theoretical for them.

• 1:23:08Chris Williamson?

  Who was that actress? Was it like Margot Robbie or someone that said, we're going to be married forever? I can see us being together for at least 10 years and then got

• 1:23:18Morgan Housel?

  They got divorced next month. That was Elizabeth Taylor. Of her, one of like a dozen divorces that she got, where she says like, yeah, there's no world in which we're ever going to get divorced. And she gets divorced 30, 30 days later. So I think, I think it's, yeah, it's, you know, people, there's a thing in psychology called the end of history illusion, where people are very aware of how much they've changed in the past, but they completely misunderestimate how much they're going to change in their future. So if you compare Chris today to 18-year-old Chris, you're like, oh, completely different. But if I said, who is Chris going to be at age 60? Most of the time, you're gonna be like, oh, probably very similar to who you are today. And that's not true. It's never true for anyone. Chris, at age 60, is gonna be maybe as different as the difference between you and 18 year old Chris.

• 1:24:02Morgan Housel?

  But it's very hard to come to terms with that. Most people think they're gonna be the same person for the rest of their life, even if they know how much they've changed in the past. So it's easy to say, I'm gonna be married to this person forever. I'm gonna be a long-term investor forever. But things change. Like, what you want out of life changes, your wisdom changes, your incentives change to push you to do something different.

• 1:24:21Chris Williamson?

  The con verse is true when it comes to personal growth as well, that if you ask yourself, what would you tell you from 10 years ago? You could go back in time and write them a tweet or send them a text or whatever. What are the things that you would tell them to start doing and stop doing and focus on and let go of? A lot of the time, people use that as a, it's a subtle brag, to humble brag about, these are the things that used to be a malady for me, but now I've transcended.

• 1:24:51Morgan Housel?

  Yeah.

• 1:24:53Chris Williamson?

  I would wager that at least 70% of the things that you in 10 years from now would tell you today are things that you today would be things that you would tell you 10 years ago.

• 1:25:06Morgan Housel?

  It's more just like a wish or a fantasy of like, I wish, I wish I knew this 10 years ago. But frankly, like, do I actually even know it today? I wish I could accept this truth today, but frankly, I still have a problem with it.

• 1:25:16Chris Williamson?

  You are your patterns and they continue to repeat.

• 1:25:19Morgan Housel?

  Yeah.

• 1:25:20Chris Williamson?

  And you, you are the common denominator between all of the different situations that you end up in. Is it that every single girl is a bitter, spiteful bitch that always wants to try and ruin your reputation all the rest of it? So, well, what do all of those girls have in common with each other? The only thing that they have in common with each other.

• 1:25:42Morgan Housel?

  They knew you.

• 1:25:43Chris Williamson?

  Is you. You're the only common denominator.

• 1:25:46Morgan Housel?

  You piece this together.

• 1:25:47Chris Williamson?

  Yeah, either that you chose them, or you created them, or you molded them, or you did something, but it's fucking you.

• 1:25:53Morgan Housel?

  There's some other corollary where it says something like, if you meet one asshole, you've met one asshole. If you meet an asshole every day.

• 1:26:00Chris Williamson?

  You're the asshole.

• 1:26:00Morgan Housel?

  You're the asshole. If everyone you meet is a jerk, like this should be telling you something.

• 1:26:04Chris Williamson?

  Yes. Trying too hard. There are no points awarded for difficulty.

• 1:26:09Morgan Housel?

  I think it's, it's true that in almost any endeavor, there's going to be a very small handful of variables that drive the majority of your returns. It's true in business, careers, investing, relationships. And I mean, it's definitely true in investing in particular that in, in, in many endeavors in life, if you want to get better at, at golf, you should, you should practice a lot. If you want to get better at basketball, you should practice a lot. If you want to get better at investing, you should do less. You should not, you should not practice more. You should not try harder. You should not pull more levels or levers or turn more knobs. You should do less. There are no points awarded for difficulty. And it is so counterintuitive in investing that the smartest people who went to the best

• 1:26:52Morgan Housel?

  schools, who have the best education are the ones who try the hardest and very often earn the lowest returns. Uh, there was this thing, um, that I read recently that as recently as a hundred years ago, the people who in society who had the worst medical care were the richest people. The rich got worse.

• 1:27:08Chris Williamson?

  They were fucking with it too much.

• 1:27:10Morgan Housel?

  Because they, they could afford all the miracle cures sold by quack doctors that were actually just going to poison you. And I think there is a perfect corollary with financial advice, that some of the people who get the worst financial advice are the richest people who can afford the highest priced consultants and advisors that tell them to justify their fee, to turn the knobs and pull the levers and fiddle with the system as much as you can to earn higher returns. Those are the people who 95% of them or more are going to underperform the simple basic index fund.

• 1:27:43Chris Williamson?

  One of my favorite Rory Sutherland stories was Terminal 5 London Heathrow. You'll have been through it if you've ever flown international connecting through London.

• 1:27:50Morgan Housel?

  Yep.

• 1:27:51Chris Williamson?

  You go in and you go up this escalator set of stairs after that, there's like one bloke checking everybody's tickets. It's insane. And then you go upstairs and you're at the top gang level of Terminal 5 and you're in a snake queue and you need to get rechecked to go through security. And.

• 1:28:09Chris Williamson?

  They were getting complaints. There were too many complaints. The amount of time that people were waiting, they were missing flights and they just couldn't deal with it. So as always, they, the humans of this situation looked at it like an engineering problem, an optimization problem. Let's get, retrain the staff to be quicker. Can we fit more lanes in? Can we change the machines so that the machines move more quickly? Can we do all the rest of this stuff? And either Rory or one of Rory's friends stepped in and said, before you drop 50 mil on this, you know, two football pitch sized area of security machines, just let's see if we can find a behavioral solution to this. And sure enough, they did. And they just put signs along the queue that said 15 minutes from this point, 30 minutes from this point,

• 1:28:53Chris Williamson?

  45 minutes from this point. And all of the signs were five minutes longer than the wait time.

• 1:28:57Morgan Housel?

  Make it easier for people to adjust their expectations.

• 1:29:00Chris Williamson?

  And they just got there and they were like, oh, I mean, it's 40 minutes, but you see it was supposed to be 45.

• 1:29:04Morgan Housel?

  This was the biggest thing with Zappos when it came out too, the shoe company. They always did this intentionally. When you made your order, they would say, we'll deliver it by Friday. And it was always just a bold faced lie. They knew they were going to get it to you by Tuesday, that Tuesday. So then when it came on Tuesday, you're like, this is amazing. I thought it was going to come Friday. And they always did it intentionally. Amazon does this well. I know this because I've been so in the mix with it with book sales. A lot of times on Amazon, they will intentionally quote you a ship date that is way longer than they know they can get it to you because they're always just managing your expectations. And then when you get it earlier, you're stoked. And almost never, it will happen once in a while, but very rarely will Amazon quote you a ship date and then it comes later than

• 1:29:47Morgan Housel?

  that because they know even if it's one day late, you're livid. If it's two days early, you're a customer for life.

• 1:29:53Chris Williamson?

  What are the areas in which trying harder or touching it more?

• 1:29:59Chris Williamson?

  Like with investing, touch it less is kind of the the rule.

• 1:30:04Morgan Housel?

  Yeah.

• 1:30:04Chris Williamson?

  Don't stop fucking with it, right? You're an 1850s person at the doctor. Just stop fucking with it.

• 1:30:10Morgan Housel?

  I think I think if the endeavor is technical, then you need to mess with it more. Tiger Woods can hit a ball better than you and I because he knows how to angle his shoulder and swivel his hips in whatever way that lets him do it that you and I can't. Investing is behavioral. So there's no, there's very, like, what really matters is like, can you leave it alone? Do you have the patience to leave it alone? Do you have the fortitude to

• 1:30:32Chris Williamson?

  Bravery, courage.

• 1:30:33Morgan Housel?

  endure the volatility? It's pure behavioral. It's not a technical thing to do. So I think whenever the endeavor is technical, you need to try harder. When it's behavioral, you need to try less.

• 1:30:43Chris Williamson?

  Why?

• 1:30:43Morgan Housel?

  I think in many ways, relationships are behavioral as well. And if you wake up every morning, you're like, I need to make a list of all the ways that I can become a better boyfriend, a better husband. Like, you're probably trying too hard. It's probably just a behavioral, just like, can we just focus on like, respect, admiration? Like, very simple behavioral things that are actually going to move the needle? Not like a list of the best presents that my wife is going to want for Christmas. That's trying too hard.

• 1:31:06Chris Williamson?

  Why are we so seduced by complexity? What makes it so attractive to us?

• 1:31:11Morgan Housel?

  I think very often, it's the only signal that the other person who's trying to help you, the consultant, the financial advisor, knows what they're doing. And everything, like, it's very clear in investing in finance that simple works. Like, low-cost index fund, buy and hold, it works. But you, as a financial advisor, you can't make a living saying that. You can't charge people a high fee for doing that. If you charge a high fee that you need to do to run your business, you have to be able to say, here's this black box that I created, and it's worth the fee because it's so complicated. And this is why I think a lot of people in finance too use jargon that's completely unnecessary. And a lot of academics use jargon that's completely unnecessary. Because simplicity is so synonymous in people's heads with, you don't know what you're talking about.

• 1:31:55Morgan Housel?

  And it's pretty rare that you have someone like Warren Buffett, let's say, who talks very simply, is very simple when he explains what he does, and is, and is crazy successful as well. It's usually like, the lawyer, the financial advisor, even sometimes the doctor, is, and I think it's innocent. They're not, they're not, you know, trying to pull the wool over your eyes. It's an innocent way that they're doing it, but they're trying to justify their education, their intelligence, and their fee. With complexity.

• 1:32:20Chris Williamson?

  Yeah, simpleness is indistinguishable from cluelessness.

• 1:32:23Morgan Housel?

  I mean, it's very rare that you would have a healthcare company that it's like, why don't you eat some vegetables and go for a run? Like, they want to make it more complicated, and sometimes the complexity is necessary. I'm not saying it's always bad. But the difference between giving advice that is good and works, and running an advice business can be a mile apart.

• 1:32:42Chris Williamson?

  Things that you don't understand create a mystique around people who do understand it as well.

• 1:32:46Morgan Housel?

  Yes. If I convince you that I know something that is so complicated that you can't even understand a single word of it, you're gonna look at me or look at whoever it is and be like,

• 1:32:55Chris Williamson?

  Oh my God, did you hear all the words he said?

• 1:32:57Morgan Housel?

  Usually all those acronyms.

• 1:32:58Chris Williamson?

  Yeah.

• 1:32:58Morgan Housel?

  I experienced this firsthand many years ago when a family member of mine, I accompanied her to a meeting with her financial advisor. And this family member does not have a background in finance. And she sits down and the financial advisor, I'm sitting with her, and the financial advisor mentions something about the yield curve. And this family member just nodded her head and moved along. And I remember thinking to myself, she does not know what the yield curve is. She has no clue what the yield curve is. No fault of her own. It's not a simple topic. But the financial advisor, I think maybe innocently too, you probably thought to himself, like, if I talk about the yield curve, I'll look really smart. Like, I know what I'm talking about. Even if the person on the other end, but the person on the other hand is like, oh, he said something I don't know. That's why I pay this guy. He knows things that I don't. And so it's like an intentional confusion.

• 1:33:42Chris Williamson?

  It's that reliable signal of effort as well that we were talking about before. It's the person whose Slack response time is always under 15 minutes. He happens to be online at three in the morning, who always gets the... But that's not always the highest point of contribution. And in fact, it can get in the way of being the highest point of contribution.

• 1:34:01Morgan Housel?

  Yeah, I mean, if you, let's say you have like a lump in your body and you're like, oh, this might be cancer. And you go in and get it x-rayed, get it MRI, whatever. And the radiologist goes, he's slacking his chair and he looks at the x-ray, he goes, you're fine. Get out of here. But do you trust that guy? I think what you want is someone who's gonna spend an hour, like with all of his tools, measuring things to make it look like you really put some effort into this. So like, very often, effort is the only measurement that we have. Complexity is the only F measurement that we have to say, like, this person knows what they're doing.

• 1:34:32Chris Williamson?

  Wounds heal, scars last. What have you experienced that I haven't that makes you believe what you do? And what would I think about the world like you do if I experienced what you have?

• 1:34:42Morgan Housel?

  I think it's so often in finance and politics and a lot of areas in life where people who are debating a topic about what you should do with your money or who's the best politician. They're not actually debating. They're people with different risk tolerances, different time horizons, different experiences, talking over each other. So if you say, making this up, Tesla is a good investment. And I say, no, it's not. We might not actually be debating with each other. It might be that you have a higher risk tolerance than I do. And so I think when you realize that like, we're all just mirrors of the experiences that we've had in life. And I've experienced something very differently than you have. Even if we're both white men roughly the same age, you grew up in the UK. I grew up in California. I experienced things that you didn't and vice versa.

• 1:35:25Morgan Housel?

  And even if we're very similar in so many regards, you know, things about how the world works that I don't. And I, and vice versa. And it's true for every single person. And so like the idea that if I, I think it's a really good question to ask. Who would I be and what would I believe if I were born to different parents? If I was born in a different generation, if I was born in a different country? And it's impossible to answer those questions. You don't know for any precision, but it's important to realize that if you were not born, where, when, and to whom you were actually born to, you would be a completely and utterly different person. And you see this a lot. One thing that's really interesting is that the German stock market has actually performed like very well. It's since, you know, since the end of World War II, it's actually done very well.

• 1:36:10Morgan Housel?

  But a lot of German investors want absolutely nothing to do with it. And, and you compare that to American investors who are like stocks, stocks, stocks. It's like they, they, they can't get enough of the stock market. And a lot of why that is, is because well, what happened to the German stock market in 1940? Went to zero, got completely wiped out. And the people's grandparents or their parents who experienced that, like that left a social scar. That was even passed down through the generations. So if you look at a German investor compared to an American investor, you might be like, man, the American investor is like, man, they're all in this. Like these guys are gunning for it and they're going to become rich and you guys are just hanging out in bonds? Like, what are you doing? And it's just because they experienced something that you didn't and vice versa. Another example, Australia before COVID went almost 30 years with no recessions.

• 1:36:53Morgan Housel?

  Like a full generation, never experiencing any economic decline. Well, that was because China had so much demand for like the iron ore that they were digging up. But because of that, in the United States during that period, we had three recessions, two of which were devastating and reshaped society. So to an American, a recession was a very real thing. To an Australian, it was like a theoretical possibility. And the Australians, of course, are just as smart as us. They have the same textbooks, the same data, but they viewed economic risk completely differently than we did. And I think you could say in that moment, were the Australians oblivious to recession risk? Or are Americans overly paranoid about it? There's no one right answer. All you can say is like, we've experienced very different worlds. We have very different takes on life.

• 1:37:37Chris Williamson?

  What's the difference between wounds and scars?

• 1:37:40Morgan Housel?

  I think a lot of it is wounds heal. And I made this analogy of like, if you go to the Pentagon in Washington DC, there is no sign of September 11th, of the plane that hit the building. They rebuilt it. There's not a single scar of it anywhere. But if you go to Reagan Airport, one mile away, the wounds, pardon me, the scars of 9/11 are everywhere. Take off your shoes, take your toothpaste out of your bag, take your belt off going through security. All of that is a scar from 9/11. So a lot of times, like the physical damage of a recession, or a pandemic, or whatever it is, like heals very quickly. But the psychological trauma is going to leave a scar forever. You saw this at the end of World War II, like Europe was rebuilt very quickly.

• 1:38:24Morgan Housel?

  The physical scars of the war were gone in 20 years or so. But the psychological trauma, the people who experienced that will never go away. And this was measured in the children who grew up in Germany, in the UK, in France during World War II. What was the psychological trauma that stayed with them through adults? It was very measurable compared to the children who didn't, say, in the United States, where there was not physical destruction. So even if the physical destruction is rebuilt, the scars last forever. And I think it's just the acknowledgement that we all have scars in one way or another from what we've experienced in life. And my scars are very different from yours.

• 1:39:00Chris Williamson?

  I had a conversation with a historian of existential risk. So he was looking at how scientific knowledge had progressed over time and how humanity's awareness of our ability to go extinct through or not through our own hands developed. And he taught me this term called conceptual inertia, which is...

• 1:39:22Chris Williamson?

  You even bring it up in Same As Ever, where you say there are murmurings amongst some of the scientists that maybe the earth isn't at the center of the solar system, but most of them are a little bit scared to do it. But even after it was proven and accepted and people were stopped being burned at the stake by the church for suggesting that this was the case, it still took like two generations

• 1:39:45Morgan Housel?

  To accept it.

• 1:39:46Chris Williamson?

  For that to actually infuse into the scientific discourse.

• 1:39:51Morgan Housel?

  Yeah.

• 1:39:52Chris Williamson?

  Why? Well, because of conceptual inertia, because assumptions about the world move very slowly. Culture's able to sort of adapt quite quickly, but when it's a foundational thing, it takes a very long time.

• 1:40:06Morgan Housel?

  You almost have to wait for the generation who accepted it to die.

• 1:40:09Chris Williamson?

  Yes.

• 1:40:10Morgan Housel?

  And it's the constant, it's like the Max Planck quote, like, "Science does not progress by new discoveries. It progresses when the old generation who used to believe something eventually dies and the new generation who didn't come up with the old dogma is now in charge."

• 1:40:23Chris Williamson?

  You tweeted a little while ago that there are 13 divorces among the 10 richest men in the world. Seven of the top 10 have been divorced at least once. What's the lesson to learn from that?

• 1:40:33Morgan Housel?

  One, it's a very small sample size. This is not like, you know, like hardcore statistics, but a variable that is so important to your lifetime happiness, like whether or not you get divorced, among a group of people who are so admired by society, "Oh, I wish I could be one of the richest people in the world," has always been so fascinating to me. And to me, this is just like the seen versus the unseen, or what you're paying attention to. When you look at one of the richest men in the world, you look at their net worth and you fantasize about what it would be like to have that much money, to have planes and yachts and mansions. What you don't see for a lot of those people, and like it's too firm to say this is pure cause and effect, but a lot of those people were so focused on their career, a singular focus for their entire life, seven days a week for decades on end of attention on their

• 1:41:18Morgan Housel?

  business that came purely directly at the cost of their personal life, their relationships with their spouses, with their children, with their friends, wherever it would be. And so this is another of like, careful what you wish for, and that there's a cost of everything that's so easy to ignore.

• 1:41:32Chris Williamson?

  The most valuable personal finance asset is not needing to impress anyone.

• 1:41:37Morgan Housel?

  I mean, so much of spending in our society after basic needs are met and after things that actually impact you are met is spending money to show other people how much money that you have, most of whom are strangers who are not even paying attention to you to begin with. I heard this this structure that I thought was so good. It was a high end Toyota is a nicer car than an entry level BMW.

• 1:41:59Chris Williamson?

  Yep.

• 1:41:59Morgan Housel?

  Or you could also say a suite at the Hyatt is a nicer room than a basic room at the Four Seasons. There's various ways that you could spin this. And I think a lot of what it is, is the high end Toyota is filled with things that are good for you. Comfy seats, good sound system, moon roof, whatever it is. The entry level BMW is purely bragging rights. You're paying for the emblem. That's all you're paying for, to show other people like, look at me, look how great I am. If you can just dispose of that in your life with the need to impress strangers outside of your core, family, friends, coworkers, whoever it might be, who like, want you to be a good person. If you can dispose of that, I think that is a financial asset on your balance sheet that could literally be worth millions of dollars to you. Just lacking the need to impress strangers.

• 1:42:43Chris Williamson?

  I think that there is a genetic set point for materialism. Everything's genetically heritable from our parents. Around about 50% of everything we are psychologically is inherited from our parents. And whatever combination of the hexico, big five personality traits contribute to materialism. Keeping Up with the Joneses, how much do I believe that love is shown through gifts? How much do I think that it's important for me to give and receive gifts, et cetera, et cetera. And I would 100% agree with you that the people for whom your next book is written and the people for whom Die With Zero by Bill Perkins is written.

• 1:43:23Morgan Housel?

  Yeah.

• 1:43:25Chris Williamson?

  In many ways have different challenges that they need to get over, scarcity mindset, and a concern and a discomfort about upgrading spending with their lifestyle and a fear about getting it wrong and all the rest of it. But you can also see it as a huge competitive advantage.

• 1:43:41Morgan Housel?

  Yeah.

• 1:43:41Chris Williamson?

  Because the total amount of money that you need to meet the standard of living that you want to. I'll never forget this dude, one of the early podcasts I did with Yusuf and Johnny, and we were talking, I'd love to bring this back up to them because their business is like. Thirty times bigger than it was back then or something like that. They're making way, way, way, way, way more money. And I remember one of the guys talking about like some arbitrary number like, you know, after a hundred and fifty grand a year. You're like, I don't really know what like, what do I do with that? Like, what am I going to do? Buy a nicer coffee? And it was that sentence. What am I going to do?

• 1:44:17Morgan Housel?

  Buy a nicer coffee. Yeah, that's good.

• 1:44:19Chris Williamson?

  Just really hit it home. And I was like, well, what you're doing is, and we talked about this last night, and you're also talking about it with the with the BMW thing. The difference between flying coach and flying business is fucking massive.

• 1:44:30Morgan Housel?

  Enormous, yes.

• 1:44:31Chris Williamson?

  It's absolutely ginormous. It is double the cost, maybe if you bucket in advance something.

• 1:44:36Morgan Housel?

  Maybe five times nicer. On an international flight, no comparison.

• 1:44:39Chris Williamson?

  But the difference between business and first is maybe another two or three times.

• 1:44:44Morgan Housel?

  It's bragging rights.

• 1:44:45Chris Williamson?

  The cost. But yeah, it's the fact that in business, people have to walk past you to get to economy. In first, you don't even see them.

• 1:44:51Morgan Housel?

  That's what you're going to pay $5,000 for.

• 1:44:53Chris Williamson?

  I've, I gotta tell you this. So Michael Easter's most recent book, The Scarcity Mindset, The Scarcity Effect. Did you see that thing in there where planes in which the people going to economy have to walk through business have a nine times increase in passenger, uh, like complaints and and and argumentation.

• 1:45:17Morgan Housel?

  It's such a distinct, like, they call it like the, the, the, the poverty parade of like when coach has like walked past. And I think, I think there, there, there's some comedian, I forget who it was, but like, uh, it's like when, when the people are walking past people in first class, the first class people are like, man, sucks. You couldn't have worked harder. You could have been sitting up here. And it's like, yeah, it's such like a, like a pure stratification of in society. I had this interesting realization recently. My father in law, my wife's father, grew up in abject poverty. He was homeless for some part of his childhood and then became a very successful businessman. When my wife was 17 and thinking about going to college, her dad, who was by then a successful businessman, said, pick the most expensive school you can find.

• 1:46:00Morgan Housel?

  And to him, it didn't matter about the education. What mattered was showing himself what he had overcome in life. That to him, going from homeless to being able to send his daughter to whatever the most expensive school in the country was, he didn't know what it was, he didn't care what it was. That to him meant so much to him as a symbol of what he had overcome.

• 1:46:19Chris Williamson?

  It's the

• 1:46:20Morgan Housel?

  And I think a lot of spending is like that. It's a symbol to yourself of like, I used to be this, but now I'm this.

• 1:46:25Chris Williamson?

  Yeah. Yeah. Well, I think that's, you know, apart from the people who genuinely adore watches, that's what a lot of watches are to people. It is a very ostentatious display of signal. It's just a super, super strong signal. Taleb, and I think you resurfaced this Taleb quote, "The world is split between those who don't know how to start making money and those who don't know when to stop."

• 1:46:49Morgan Housel?

  So good.

• 1:46:50Chris Williamson?

  Phenomenal framing, but I think that there is an equivalent twist when it comes to people who do personal growth. The world is split between people who don't know how to change their lives and the people who don't know when to stop.

• 1:47:03Morgan Housel?

  Know when to stop. They imply just so many things.

• 1:47:05Chris Williamson?

  Yeah.

• 1:47:08Morgan Housel?

  What was I gonna say? I had a good one. All teed up.

• 1:47:12Chris Williamson?

  Valuable first personal finance asset is not needing to impress anyone.

• 1:47:15Morgan Housel?

  No, I had a great spending thing that I was gonna say. Anyways.

• 1:47:19Chris Williamson?

  Morgan, I appreciate the hell out of you, man. This is episode number five or six or something. It's honestly, I said it on the first episode, people need to go and buy Same As Ever. I love it as a book. I think it's phenomenal. It's super easy read. You know, it's, what's the audible? Seven hours, six hours, something like that?

• 1:47:35Morgan Housel?

  Maybe less, four and a half or five.

• 1:47:37Chris Williamson?

  Four and a half, five hours. Super easy read, chunked up into individual chapters. We've gone through loads of the stuff today. There's tons more stories. Everyone needs to go and collect that. And where can they go? Where else can they keep up to date with the stuff you do?

• 1:47:47Morgan Housel?

  Most of where I am is Twitter. I'm always gonna call it Twitter, never X. Most of where I am is Twitter. My handle's first and last name, Morgan Housel.

• 1:47:55Chris Williamson?

  Hell yeah. Morgan, I appreciate you.

• 1:47:56Morgan Housel?

  Thanks, Chris.