Morgan Housel: The Investing Expert’s “System” for Stress-Free Wealth

Morgan Housel, best-selling author of The Psychology of Money, Same as Ever, and The Art of Spending Money, has a “system” for building wealth that seems too simple, too easy to be true—but is. Most Americans think getting wealthy is only for those willing to work 100+ hour weeks, build a business from scratch, inherit millions, or get a high-paying six-figure job. That’s not the case. The average American can get wealthy—you just need to follow this “good enough” system. Morgan spent the early part of his career covering lessons from the fallout of the 2008 Great Financial Crisis. Economics couldn’t make sense of it, and what he found was that psychology could. Knowing how to win the money game puts you in the player’s seat, instead of watching from the sidelines. And today, Morgan shares the biggest lessons to get in the game. From the simple “system” both he and Dave use to build wealth to the #1 skill of a wealthy investor, when you should spend more money, and why merely working harder isn’t going to get you what you want. Morgan even shares his strong opinion on the #1 thing wrong with the housing market today—and how we could actually fix it. In This Episode We Cover Morgan’s simple “system” for building wealth even if you don’t have tons of extra income Why retiring early is not the goal worth striving for (and what is better) How much of a return should you be making on your investments? Morgan’s unique answer Knowing your “enough” so you can stop worrying, start living, and do what you’re meant to do Spend more money before it’s too late? The argument for why you shouldn’t wait to give And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1292⁠⁠⁠⁠⁠. Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠[email protected]⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

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

• 0:00Dave Meyer?

  Morgan Housel, the bestselling author of The Psychology of Money, Same as Ever, and The Art of Spending Money, didn't get wealthy by chasing huge investments, making genius stock picks, or building a 100-unit rental portfolio. Instead, he used a simple system for building wealth that's not only easy, but repeatable by everyone hearing this right now. It allowed him to reach financial freedom with less stress and more free time without the burnout. In fact, Morgan even says that working more could be counterproductive to what you're actually trying to achieve. Today on the show, we're getting access to this system, which you can directly apply to your own investments in real estate or any other asset class.

• 0:45Dave Meyer?

  Plus, Morgan shares a strong opinion at the end that every real estate investor needs to hear.

• 0:57Dave Meyer?

  What's up, everyone? I'm Dave Meyer, Chief Investment Officer at BiggerPockets. Today's guest on the show is a special one. It's bestselling author Morgan Housel. I am personally a huge fan of his books. Reading The Psychology of Money absolutely changed how I think about building wealth. So I am super excited to share this conversation with Morgan with all of you. Let's bring him on. Morgan, welcome to the BiggerPockets Podcast. Thanks for being here.

• 1:26Speaker 01

  Thanks so much for having me.

• 1:27Dave Meyer?

  Yeah, I'm excited for you to be here. I'm very excited that you're going to be joining us at BPCon this year as our keynote speaker because honestly, I've learned a lot from you and I think you have so much value to add to the BiggerPockets community. Maybe you could start by just telling us a little bit about yourself. You've become one of the most prominent thought leaders in the financial investing space. Like, what drew you to this space in the first place?

• 1:52Speaker 01

  No, it was it was very much an accident. It was never part of the plan. It was never part of a plan to become a writer. And even once I was a writer, it was never part of the plan to write about the topic that I do now. I graduated college in 2008, and I wanted to be an investment banker or a hedge fund manager. That was the plan. Obviously, 2008 was like a nuclear explosion in financial world, not a good time to be looking for a banking job. And then so out of desperation, and nothing more than that, I stumbled haphazardly into a job as a writer for The Motley Fool. And I did not want to do it. I was not excited about doing it. I was not proud of becoming a writer at the time. It was not where I saw my career going. But frankly, like, I had rent to pay. I needed to do something. And in 2008, that was the the only finance job that I could wrap

• 2:35Speaker 01

  my hands around and that I could that I had. And so I became a writer in 2008, which obviously was a very interesting time in the world. When I started as a Motley Fool writer, I was assigned the banking sector to cover. And I forget the exact numbers, but it was something like at the beginning of 2008, I had like 16 banks to cover. And by the end of 2008, only like seven of them were still alive and still around. And so I spent those first couple of years, let's call it 2008 through 2012, let's say, trying to answer the question like, what the heck happened in 2008? It seemed like such an A, very important question to answer. And B, it should have been an easy question to answer. And as the years went on, it was like, oh, it's not easy at all. And the reason it wasn't easy is because there was nothing in a finance textbook or in an economics textbook

• 3:18Speaker 01

  that would explain why 2008 happened. Like, just wasn't really there. But as I started like peeling it back and reading other people and figuring out, it was like, oh, there's nothing in an economics textbook that'll explain it. But psychology explains it. Sociology explains it. Political science explains it. Biology explains it. Like, evolution explains. There's all these fields that had nothing to do with investing or money. They were like, oh, like, if you want to understand why people keep up with the Joneses and bury themselves in mortgage debt, don't read a finance textbook. Read a sociology textbook. It talks all about it. Like, it's all right there. Yeah. And so that, to me, was just like, oh, if I want to understand markets and finance and money, I need to think about this not through a finance lens, but through a behavioral psychological lens.

• 4:02Speaker 01

  And look, that was not that unique back then, and it's definitely not unique now. But that's where this all started coming from.

• 4:10Dave Meyer?

  Well, you're very effective at it. I've recommended your first book, Psychology of Money, to many people because it just does such a good job of putting into really simple, relatable terms, some of the fallacies that we all have about money. And it makes you really think about our culture and how we've sort of pushed people in the wrong direction, how they think about money is not always optimal for their happiness and for their lives. What are some of the biggest things you've discovered people do wrong or some misconceptions they have about money?

• 4:46Speaker 01

  One, I've always felt like I wrote for an audience of one, which was me. And all of this time for the last almost 20 years now, I've just been trying to figure out my own problems and my own psychology and trying to make sense of the world. And one of the defining moments, I would say, of my career was a moment, most of this was probably 10 years ago, around 2016 about, where I had a group of friends, most of whom were financial professionals, ranging from financial advisors to portfolio managers, hedge fund managers, and how much crap they gave me about some of my financial quirks. Why are you doing it this way? Why are you spending more on this? Why do you spend so much more on that? Why do you invest like that? Why do you have so much cash? Why are you doing it like that? And it was interesting to me that they could not understand, like there was not room in

• 5:29Speaker 01

  their brain for them to understand that maybe I'm doing it this way because that's what works for me. And maybe you're not doing it that way because your way works for you.

• 5:38Dave Meyer?

  Right.

• 5:39Speaker 01

  And it wouldn't work for me. So I think, to answer your question, one of the biggest fallacies is that, you know, most of the last 100 years in finance, we've treated it like it's physics. And most of, like, the people who win the Nobel Prize in economics mostly do it for, like, Greek formulas that are very math-heavy. We've treated it like a math-based field. And I think it's something closer to like your taste in food of just like, you like this, I like that. Okay, good for you, move on. And so, a lot of damage is done in finance when people follow a financial plan that is right for somebody else but wrong for you. And it's very easy to fall for that because it is right for somebody else. It's good advice for somebody else, but it's disastrous for you.

• 6:23Speaker 01

  And so that's, I think that's the biggest by far is that there is no one right way to manage your money. And you have to think of this through a very individualistic lens and figure out what works for you.

• 6:33Dave Meyer?

  I appreciate that and fully agree with it, but it can be a little bit intimidating too. I think a lot of people who maybe are new to investing or personal finance, sometimes just want to be told what to do. At least in my experience, when I was first starting, I was like, just tell me exactly where to put my money, what stock to buy, which for our audience, where should I go out and buy my next rental property? And managing it yourself and sort of forming your own path, I do believe is the right thing to do. But without some background or knowledge of the basics of finance, that can be hard to do, right?

• 7:11Speaker 01

  You're absolutely right. That, of course, some background, some technical background of understanding budgeting and how compound interest works and the basic mechanics of the stock market and you know, earnings per share and dividends, that baseline knowledge, of course, is very important and it should be taught in schools where by and large it is not. But I would say, I think an appropriate analogy is this. If I said, everybody in order to become healthy, needs to be able to deadlift 250 pounds. That advice might be very good if you're a, if you're a 19 year old boy. If you're an 87 year old grandmother, it's disastrous. And of course, that's like an extreme example, but I think we do versions of that with investing. Watch CNBC. There's no nuance in terms of who they're talking

• 7:53Speaker 01

  to. They have a guest on that just says, you should shorten Microsoft before earnings. Like, who are you talking to? Like, that advice could be very good for one person and disastrous for another. And so I really think it's that. And I, why I think like the health analogy is appropriate is because there are two areas in life in which every single person on the planet has a personal obligation to become, if not experts in, at least very well knowledge in, and that is health and money. Because it is almost impossible to have a good life if you don't pay any attention to those two things. They will eventually catch up with you. So when I hear people say like, "Oh, I'm just not interested in finance. I'm just not interested..." Well, like, finance is interested in you. Like, it's gonna catch up to you. And if someone said,

• 8:37Speaker 01

  "I'm just not interested in health. I just don't want to be healthy," you're like, "Well, you're gonna have a hard life. That's gonna be a difficult one to get around." And so when people say, like, "I don't understand it. It's intimidating," A, I empathize with that, because it can be intimidating, and B, I think you need to get over that and you have an obligation to learn about it.

• 8:54Dave Meyer?

  So, you know, you talked about some of the basics here, you know, budgeting, personal finance. A lot of our audience, they're pursuing financial freedom. They're looking to buy back a lot of their time. I know a topic that you talk a lot about. What basics do people need to be able to set a long-term goal and then pursue it consistently? Because I think that's what holds a lot of people back, is that the goals feel so far away, or so far into the future, that they wind up not getting started at all.

• 9:24Speaker 01

  I think there's two things to keep in mind here. One is that long-term goals can actually be very different, because everyone is gonna change between now and whenever then is. And so if your goal is, let's say you're 30 years old, and you say, "By age 65, I want to have $2 million in the bank," that's a goal. It's so far in the future. It's, you know, 35 years in the future that you're like, "Why even buy?" Like, I'm trying to, I'm trying to cover groceries next week. You're talking about 65 years old? Like, forget about it. If you're thinking about it that far in the future, it is very difficult. But if you were to say, if you flipped it around and said, like, "Look, that's not necessarily my goal. My goal is to save $200 per month," or whatever it might be. And that's, it's not even a goal per se, it's a system. So

• 10:08Speaker 01

  rather than a goal, you're saying, "I am going to save $200 per month." You're taking what is effectively a long-term goal, and you're turning it into a short-term system. And it's easier to wrap your head around the realistic horizon of what you're looking at in life. I'm not thinking about 65 years old. I'm thinking about what I'm gonna do the next paycheck. And so that's, I think that makes it more manageable for people. The last thing I'd bring up, Charlie Munger was the one who brought this up, and I think it was a blunt but profound and probably realistic observation, when he said,

• 10:40Speaker 01

  When you're teaching financial skills to young people, they either understand it instantly or never. It's one of those two. And so I think to your point, there's a harsh truth around this. Buffett has talked about people who have the money mind, where some people just get it naturally. They just understand what we're talking about without any kind of education. And so to your point, I think some people find it very easy to save for the future without any effort. It's just a natural course of events for them and other people will always struggle doing it for the rest of their lives. It's just kind of how people are wired.

• 11:15Dave Meyer?

  Yeah, that makes sense. Well, hopefully everyone in our audience has that money mindset that they're listening to this show. So I think they at least have some leg up. We got to take a quick break, but we'll be back with Morgan Housel right after this. Summer bookings sound great until someone slips by the pool, gets hurt on your dock or damages your property during a long holiday weekend. A lot of short-term rental investors don't realize their standard policy may leave gaps when it comes to short-term rental activity. That's why investors use Steadily. They offer landlord insurance built for real estate investors, including short-term rentals. And if you're a BiggerPockets Pro member, you'll also get 5% off your landlord insurance premiums. Visit biggerpockets.com/landlordinsurance to learn more.

• 11:59Henry Washington?

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• 12:41Henry Washington?

  And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and Potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13% of the home price, which exceeds $60,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited. Learn more at biggerpockets.com/retirement or text REI to 33777. Again, text REI to 33777.

• 13:23Dave Meyer?

  I just booked a backpacking trip through Olympic National Park. Two nights out on the trail, no cell service, nothing to do but eat trail mix and stare at mountains I'll never get tired of. That's the whole appeal. But while I'm off grid, my place doesn't need to sit empty. I can list my space on Airbnb and make a little extra income while I'm away. And with Airbnb's co-host network, I could partner with a vetted local co-host to help take care of the details, from guest communications to onsite support, so I can fully unplug and enjoy my time out in the backcountry. If you've got upcoming travel plans, you can find a co-host at Airbnb.com/host.

• 14:05Speaker 03

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• 14:34Dave Meyer?

  Welcome back to the BiggerPockets Podcast. Let's get back into my conversation with Morgan Housel. You said something, Morgan, about systems, which I really appreciate, and trying to just focus a couple of years out. Do you work backwards from where you want to be at 65 to develop those systems? Like how much money you need to be saving? Even if you wind up changing it? Don't you have to sort of like start with some idea of where you want to be long term?

• 14:59Speaker 01

  Yeah, and this goes back to like the the basic technical financial skills of understanding growth and compounding. And so I do this with my own money. I max out the accounts that I can. And that's my system. Now, once in a while, I'll be like, hey, I'm just curious. If I keep doing that for 30 years, how much am I going to have when I'm 70 years old? Like, oh, let's do the math. Oh, that's kind of cool. Great. But that that's secondary to the system of I'm doing the best I can right now. And that's that's all that I can do. And that's the system. And so I think that's very similar for health again. It's a good thing, and it's a fine thing to say, I want to lose 10 pounds. That's a goal. That's great. A better system is I run five miles per week or whatever. And that's I think that's how I think about my own health. I don't have any health goals.

• 15:44Speaker 01

  I don't have any fitness goals, but I run every other day.

• 15:47Dave Meyer?

  Yep.

• 15:47Speaker 01

  It's part of the schedule. And when I do it, I don't think to myself, oh, I'm one step closer to whatever the goal might be. It's just this is what I do. It's just part of the routine. I think if you can get your financial habits closer to that, the irony is you're more likely to reach whatever goals you might have in the future than if you're only thinking about the very far distant future and trying to shape your daily habits around that.

• 16:09Dave Meyer?

  Yeah, that that makes a lot of sense to me. And I think it's very good advice for just basic budgeting and what you're talking about, but also for real estate investors as well. Just getting in the process of managing your properties well, saving for your next properties, just doing it, not thinking about, oh, I need to get X number of units or X number of doors. But one, you're more likely to succeed. I also just think you kind of enjoy it more. If you're just like always living for something that's 10 years or 20 years or 30 years down the line, it's not very satisfying. Like, that's the whole point of money is to enjoy it incrementally while you still can, not waiting till you're 65 years old.

• 16:49Speaker 01

  I think there's a point too, where this has happened with a lot of things in life with technology, where we can now track the progress of of almost everything we do down to, you know, the third decimal point. And I think that amount of data and optimization can drive people crazy. And so I'll give you an example with my my Apple Watch and tracking my daily steps. A it's a good thing that if it's 6pm and I say, hey, I don't have a lot of steps today. I should go for a walk. That's a good thing. You could also kind of drive yourself crazy of becoming this like neurotic like optimizer in life. And I think there's a lot of that with finance too.

• 17:22Dave Meyer?

  Oh, man.

• 17:22Speaker 01

  Where if you just have a good enough savings philosophy and spending philosophy. Look, I save about X percent of my income. And I enjoy my life and I save about then like, I don't know, that's good enough. Could I do better? I don't know. Could my portfolio be a better allocation? Like I, I don't, it's probably good enough. And but I'm not going to become neurotic optimizing around the edges. I think that's, that's important too. And I think a lot of people, when they get burned out with finances, it's, it's because they were too obsessed with optimizing down to the third decimal point, when it should have just been good enough. Because the truth is like, there are so many unknown variables of stock market returns, your income, your career, that we shouldn't pretend that we should be optimizing this

• 18:05Speaker 01

  in, in, in any meaningful way. If you could just get like directionally right, that's about as good as you can be over time.

• 18:11Dave Meyer?

  I feel like the best thing in finance is to not think about finance. That's how you, is an important, in my mind, barometer of success is if you're wealthy and you're thinking about your money all the time, you're kind of missing the whole point.

• 18:25Speaker 01

  Totally right.

• 18:26Dave Meyer?

  I understand that if you don't have money, you're worrying about money, that sucks. You should try and hopefully find a way to get out of that. But the whole point of doing all this is to not be thinking about it.

• 18:39Speaker 01

  One little story that was related to this that I loved. Um, this was in the 1980s. And I think it was Morningstar, maybe it was Forbes, one, some big financial magazine would track the best fund managers of the year. And one year in the early eighties, the best mutual fund manager with the highest returns was somebody that nobody had ever heard of. He just came out of the blue and all of a sudden was the top performing fund manager for like the previous two years, I think it was. And so, uh, the magazine Forbes Fortune, whatever it was, sent a journalist to go interview this gentleman. This guy no one's ever heard of. And they came in and they're like, hey, you've earned such good returns. How did you do it? And he pulled out Value Line, which was a magazine that ranked how cheap stocks were just formulaically.

• 19:22Speaker 01

  And he pulls that value line and he says, I bought the cheapest stocks. And that's it. And that was just, and you compare that, like this brainless, simple strategy to other portfolio managers that like hire astrophysics PhDs and pull their hair out with the most complicated models and do worse. And there's so much, the modern version of that guy in the eighties are people who just dollar cost averaging index funds and beat the pants off of 90% of investors.

• 19:47Dave Meyer?

  Yeah.

• 19:48Speaker 01

  The era of big data and big tracking can really backfire in a lot of ways.

• 19:54Dave Meyer?

  I agree with you. And you said something earlier about being directionally right. Like, that's the whole value of dollar cost averaging, right? Like, you just want to tie your results to the overall performance in most cases in the, in the stock market. But Morgan, we also teach our audience to dollar cost average into real estate, to try and do this regular, to, to tie their performance to the long-term average of the US housing market. You're gonna be fine. Like, sometimes you might buy an okay deal, sometimes you're gonna buy a great deal. But over time, it actually just works. And, you know, I have been thinking about this a lot recently, that I think maybe the best skill of an investor is just, is just patience, just being willing to wait for it and not focusing on, in our,

• 20:39Dave Meyer?

  in our line of work, like, oh, my cash flow went down this month, or I had to fix a water heater, or, you know, I had a vacancy this month. Like, that stinks. But if you just zoom out, if you're just willing to look at this thing over 10, 15, 20, 30 years, it's fine.

• 20:55Speaker 01

  Yeah.

• 20:56Dave Meyer?

  And all these worries that you have are completely trivial in the grand scheme of things and are probably causing you more harm than good, because you're just stressing out over something that isn't really going to matter.

• 21:10Speaker 01

  Right. I'll give you another example of this. And this has to do with like, having too much data and tracking. On most modern cars, including a car that I bought a couple of months ago, it shows you your recent gas mileage, like, for this trip.

• 21:22Dave Meyer?

  Oh, I hate that.

• 21:22Speaker 01

  Like, hey, in the last 10 miles, you got X miles per gallon. And it drives me nuts. Because I can be like, hey, the last trip, it was 26.4, now it's 26.3. Like, what, what happened here? And even if I know, like, hey, I know this is Going to average out to 30 miles per gallon or whatever. And like, that's what it's going to be over the course of a year. And I'm freaking out that it went down by like a couple tenths of a percentage point. Especially when you're like, hey, let's say it used to be 30 and now it's 29.8. What does that cost me over the course of a year? Like $3. It's like the difference in gas mileage that it cost me.

• 21:55Dave Meyer?

  And you're spending the whole time you're driving just thinking about that. You're like, it's $3 and I just spent an hour thinking about it.

• 22:00Speaker 01

  It's a gauge in front of you. And then I'm thinking, I was like, oh, are my tires not filled up enough? Am I lead footed right now? Like, what's going on? You drive yourself crazy. Rather than just being like, I got a car that will get about 30 miles per gallon. And even if it's 28, it's not, it doesn't matter. It's good enough. So the equivalent, like, that's the mentality that I want with money. And that's why I dollar cost averaging into index funds. Do I think that there are smart investors in the world who will outperform index funds over time? Yes, there are, there have been, there will continue to be. I'm fine doing my good enough approach. And my desire with money is not to outperform my neighbors or outperform my peers.

• 22:43Speaker 01

  It's to use money to give myself and my family like the most effort adjusted quality of life that we can have.

• 22:49Dave Meyer?

  I love that.

• 22:50Speaker 01

  People in finance always talk about risk adjusted returns. That term is everywhere, risk adjusted. I think we need to talk about effort adjusted returns and stress adjusted returns. Because let's say as an index fund investor, I can earn 10% per year. And an active manager can earn 10 and a half percent per year. But they do it working 50 hours a week, stressed out beyond belief. It's not spending as much time with their family and their kids and going for walks and sleeping in and taking naps. Like, who's actually earning a higher return? I think in effort adjusted terms, I'm earning a way higher return than they are.

• 23:23Dave Meyer?

  I love that. And I think for our audience, that the effort spectrum is really large in real estate. Because like, if you're going out and doing renovations, you know, scaling at all costs, which has really become sort of like a pervasive mindset in our industry. Like, it's so much work. You're getting, you're doing so much work. And sometimes it's worth it for certain people who really want to scale a massive business. That can be worth it, but really think that more real estate investors need to think about that. For example, like I've been just selling off properties that are a pain in my butt and just buying ones that are in really good condition recently. Because I just don't want to deal with it anymore and I, I will take a lower return, but I have a higher quality of life. And that's like the entire point of all of this.

• 24:08Speaker 01

  Yeah.

• 24:08Dave Meyer?

  And Morgan, I think that's something I've always resonated with, with your writing and work is it's really thinking about the big picture and less about individual performance, but like, what are you gaining by having more money? Because it requires a balancing act, right? Like saving and building up a financial cushion sometimes does require some sacrifice. But then I think you have some people who get so obsessed with that, to your point about data and tracking, that they can never like pull back and actually spend and enjoy the fruits of their labor. So like, how do you recommend people balance that? How, how do you toe that line?

• 24:49Speaker 01

  I, I've written about some of these people in like the introduction of the psychology of money. Every couple of years you'll see a new story of an uneducated, minimum wage country bumpkin who dies with $8 million and leaves it all to charity. Like these stories come up and they're always very positive, like happy stories. And I've profiled some, there are really cool stories, but I think there are a lot of people who die with a substantial sum of money and maybe they don't admit it to themselves. They don't have a lot of regret, but could you have used that money as a tool to live a better life? Even if what you did with it was giving your money away with a warm hand instead of a cold hand.

• 25:27Dave Meyer?

  Yeah.

• 25:27Speaker 01

  Given it away when you were alive and you got to see the benefit that it made until you waited until you're dead and you're the executor on your estate, gave it all away to someone and made their life better and watched the happiness that came from that. Would you have had a better time doing that? I think the answer is, is yes. I've changed a lot of my thinking in terms of giving money to kids and to charity. In terms of, you know, there's, there's a great book, Die With Zero. He talks a lot about this. This is like, if you're going to leave money from your kids, don't wait until they're 70, when they probably don't need it. You know, when they need it, they need it when you're, when they're 30 and they need to buy their first house or they just had their first kid. That's when you're going to make a lot of difference. And so that's, I think that that's a big part of it. So even if you're not going to spend it on yourself,

• 26:09Speaker 01

  figuring out a way to use it as a tool for the betterment of other people around you, that's really important.

• 26:15Dave Meyer?

  What do you make of the FIRE movement, Morgan?

• 26:18Speaker 01

  I love the first two letters of it, and I'm not big on the last two letters of it. Financial independence, love it, love every bit of it, want it for myself. It's pretty much the sole goal that I've ever had with money was to be independent. All I've ever wanted. Retire early, way more complicated because I think that you saw this in the FIRE movement of how many people retired at 32 and that was their goal. And they had this giant celebration, oh my gosh, I'm done. I get to live another 50 years doing whatever I want. And about week two of retirement, they woke up and they said, I'm bored. And boredom leads to depression for a lot of people. And so I always say like, if you think work is hard, try boredom. It's way harder. It is way more psychologically taxing than dealing with a bad boss and commuting.

• 27:02Speaker 01

  It's brutal for people because it's so existential. So FIRE is great if you have backfilled your life with very meaningful challenges, not just work, but challenges. I think there is a minimum level of stress that people need in life. There's a stress floor that you need. And if you don't find that stress from legitimate problems, you will find that stress from fake problems that you've made up and are blowing out of proportion.

• 27:28Dave Meyer?

  Yeah.

• 27:28Speaker 01

  And I also think, I'm going down off a tangent here, but I think one of the reasons that politics is so divisive and so nasty today, more than it was 50 years ago, is because 50 years ago, we had real problems to deal with that were taking up our time. And today we have relatively fewer of them. So we've made up, rather than worrying about like, how am I going to feed my kids? And like, is there going to be a nuclear holocaust next month? We have moved our stress focus to, did you see what this congressman tweeted yesterday?

• 27:59Dave Meyer?

  Like culture wars, yeah.

• 28:01Speaker 01

  Yeah, culture wars, exactly. And so I think a lot of people in the FIRE movement, if they don't have the stress and the challenge of work. They will make it up in other areas of their life that can be very just psychologically taxing.

• 28:15Dave Meyer?

  I couldn't agree more. I love financial independence, the retire early thing. It's so, I see it even with my parents who are in their seventies, you know, they struggle with retirement and they worked fifty some odd years to be able to get there and they're bored, you know, like they don't exactly know what to do. Think about someone with the energy of a thirty five year old doing that, you know, it's hard to wrap your head around. I think this, I don't know for you, Morgan, but for me, the sweet spot is just being able to choose what you work on and how your time and day is structured. I think that's what I try and focus on. I work full time right now and I'm very happy doing it.

• 28:56Dave Meyer?

  But I think, you know, ten years from now, I'd love to work like twenty five hours a week, something like that, and be able to pick and choose when I work. I don't know if you call that retirement. Some people call it like work optional or whatever it is. I just think it's important for people to find something that's meaningful to them and to contribute, like to contribute to society. Find a way to add value to, even if it's just your community, like something like that is so valuable. I don't like the idea of just like tapping out, you know, I mean, like I'm out of being a productive member of society. I'm just going to do nothing.

• 29:31Speaker 01

  Totally. No, I think that's kind of worthless.

• 29:33Dave Meyer?

  Yeah.

• 29:34Speaker 01

  I heard someone say this, that for a lot of tech founders who get rich when they're, you know, thirty, a lot of them will at least take, let's call it a sabbatical.

• 29:41Dave Meyer?

  Sure.

• 29:42Speaker 01

  And be like, look, I cashed out, I made ten million dollars, I'm just going to take two years off and then I'll get back in the game. What so many of them said is that if someone takes two years and then tries to get back, the amount of brain atrophy that they have in those two years is stunning. And like, brain atrophy is a real thing. Like obviously, if you stopped working out, you would lose a lot of money.

• 30:04Dave Meyer?

  Oh, yeah.

• 30:04Speaker 01

  You wouldn't look the same.

• 30:05Dave Meyer?

  It'd take forever.

• 30:06Speaker 01

  But people don't really think about that with their intelligence and just staying on top of things. And so. I think that's, that's a big part of it too, is that you are working out your brain every day with challenging problems that are driving you crazy, that gives you a certain level of stress, that you're trying to figure this thing out. And whatever that thing is, should be contributing to something bigger than yourself. Not just stressing out about where you're going to take your next vacation, but a problem that's going to help other people and is bigger than you. Everybody needs some level of that.

• 30:35Dave Meyer?

  What about the other end of the spectrum? What do you make of these sort of pervasive hustle culture that you see around either entrepreneurship, or investing, or finance? That at least I see a lot of on social media.

• 30:47Speaker 01

  I think it's, I think it's 90% performative. And

• 30:51Dave Meyer?

  You might be generous. It might be more.

• 30:52Speaker 01

  I am. Let's, let's call it 99.9% performative. And look, if you were going to hire someone, one of the traits that you would want is that they were very efficient with their time, that they could, that they could produce a lot in a short amount of time. And so when you look at these people there who are like, I work 100 hours a week. You're like, yeah, it sounds like you're very inefficient at whatever you do.

• 31:12Dave Meyer?

  That sucks.

• 31:13Speaker 01

  Like, it sounds like you're not doing a very good job. That sucks for you. It sounds like you have no time management skills. It sounds like you're not using any technology to leverage what you do. Not the flex you think it is.

• 31:22Dave Meyer?

  Yeah.

• 31:23Speaker 01

  And, and so I think that there's a lot of that. It is kind of sad that we have using the amount of time that you work as a proxy for the value that you add, because it's not even close to that in the, in the real world. And most of you have probably been to a doctor's appointment, where a doctor changed your life for the better in 10 minutes. Like, they, they diagnosed you and they're like, oh, here, here's the pill you should take. And you're like, oh, it's, everything's better now in 10 minutes. It does, sometimes it doesn't take a tremendous amount of time to move the needle by a gargantuan amount. But I, I think the reason that we do associate hustle with results is because it's so easy to track. It's very hard to track, like, how productive you are. But if someone says, I work 100 hours a week, like, I can track that and I can compare that to how often I work.

• 32:08Speaker 01

  It's very apples to apples comparable. And so it has this allure of the ultimate metric. Even if, if you were hiring someone, it would be the last thing you would want is someone who's like, it takes me a tremendous amount of Time to get very little done.

• 32:22Dave Meyer?

  One of my favorite quotes is what gets measured is what gets done. And I think it, we talked about this on the show, but I think that's true with this hustle culture mentality. It's like, oh, I work 100 hours. Like, well, then you're going to fill up your week to 100 hours every week. Because you value that. For whatever reason, you have decided that that's the measurement. That's the metric that's going to take you from where you are to where you want to be. But you're not actually measuring the right thing.

• 32:50Speaker 01

  Yeah.

• 32:50Dave Meyer?

  We have this metric in real estate investing, we're getting a door count. People count how many units they have. I think it's the worst metric out there because it's similar to this. Does not measure efficiency. You could go out and buy 150 awful units. And these are the people who show up to real estate investing meetups and brag about how many units they have. I own not that many, but they're very, very efficient. They're very good at getting me what I need. Because it's taken me some time, but I've actually figured out how to measure the right thing. And focus on that and sort of try to ignore everything else.

• 33:28Speaker 01

  Yeah.

• 33:29Dave Meyer?

  For people who are pursuing their financial path, like, are there good things to be looking at frequently? Like, we've talked a lot about what not to track, but are there things, in addition to having the right systems, that people should be keeping an eye on?

• 33:42Speaker 01

  One thing that I'm reminded of when you say that is that, you know, if, if I can earn a 10% return per year, and you can earn 15% return, just as, just as an example. But I have a simpler life than you do, let's say, then it's possible that I'm actually earning higher returns than you are. Because there's some people, let's say you have a hedge fund manager and they can earn 20% per year. You're like, that's amazing. You're like, yeah, but do you see his lifestyle?

• 34:06Dave Meyer?

  Yeah.

• 34:06Speaker 01

  He needs 20% per year just to break even. And you know, and you have other people who are like, their life is so simple. That if they earn 3% return, all their bases are covered. Everything's good.

• 34:17Dave Meyer?

  That person's killing it.

• 34:18Speaker 01

  They're killing it. And so that's the efficiency level that when we compare returns, like it's not, it's not apples to apples. I think, for example, there are so many pension funds that are so underfunded. That even if they earn 15% return, they're still screwed. Still, it's it's never enough. And there's people who have gigantic retirement funds, you know, that you know, these individuals who like don't need to earn anything. Daniel Kahneman, the late psychologist, talked about this. He went to a financial advisor when he was like seventy five or something like that. And he said, I have no desire to ever see my net worth higher than it is right now. He said, I just want to live off, live out my days on this pot that I've accumulated and that's all I want to do. And he said, the financial advisor told him, I can't work with you. Because it was so antithetical to the financial advisor that somebody would not want more money.

• 35:04Speaker 01

  But like Kahneman was so content with what he had, that he was like, zero percent return is enough for me. That's all, that's all I want. Like, that's the efficiency that you want to track. Like, what return do you need to achieve your goals? That's, that's, I think that's an interesting statistic that we don't talk about a lot.

• 35:20Dave Meyer?

  Yeah, that's a great way to look at it. And it really tells you what kind of investing strategy you need to to pursue. Because, you know, in in real estate, we have rental property investing earns you a good risk adjusted return. Or you could go out and flip, and which is super high risk, high effort. But, you know, if your goals require that you twelve X your money in the next ten years, like, you're gonna have to go out and take a lot more risk. But for most people, it's just not necessary. And so you don't have to be going out and trying to earn this maximum rate of return. You should do this exercise, and maybe you don't have to try so hard. Like, maybe things are a little bit easier than you expect them to be.

• 36:01Speaker 01

  Right. You see this very often in venture funded startups. Where a company will make a big splash and say, we raised a hundred million dollars from venture capitalists. You're like, great, that is like, cool, congratulations. You know what that also means? It means that you now have to absolutely crush it just to break even. Like, your expectations just went vertical. And is there a world where if you had only raised twenty million dollars, but with reasonable expectations, you actually could have managed the business in a much more effective way?

• 36:28Dave Meyer?

  Yeah.

• 36:29Speaker 01

  Perhaps.

• 36:30Dave Meyer?

  Yeah.

• 36:30Speaker 01

  And so, like, people don't realize that expectations are a debt that has to be repaid. Your own expectations, other people's expectations, is a form of debt. It's a hidden form of debt. You don't see it, but it is very real. In terms of that psychological financial hurdle that you have to clear just to break even.

• 36:48Dave Meyer?

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• 38:53Dave Meyer?

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• 41:29Dave Meyer?

  Welcome back to the show. Let's get back into my conversation with Morgan Housel. How do you get that mindset? How do you figure out what's genuinely enough for you? And that you don't need to keep doing the rat race? Because I think our culture has us set up to keep striving, right? Culturally, that's what we value. But when I hear those two possible outcomes, being a billionaire or being perfectly content with what I have, I would choose being perfectly content with what I had. And I hope to try and get closer to that.

• 42:03Speaker 01

  To me, what moved the needle the most in terms of having enough was the realization that nobody is thinking about me as much as I am. And nobody is thinking about you as much as you are. And that we massively overestimate how much attention we get for our position in world and for our stuff. And that it's easy to think that, oh, if I had a bigger house, all these other people would look at me and say, he's so great. He's so amazing. Look at his big house. I so admire. And they don't. They don't do that. If anything, when they look at your big house, they just imagine themselves living in it. They don't give you any credit for it. They just think, wouldn't that be cool if I lived there? Whenever people go to Zillow, and you know, so many people do this of like, what would I buy if my budget was 25 million?

• 42:48Speaker 01

  And look at all these houses. They're not admiring the people who actually live there.

• 42:51Dave Meyer?

  Never thought about it.

• 42:51Speaker 01

  They're dreaming about living there themselves. And so, once you come to terms with how silly that game is, then I think you're, a lot of your desire for social status, not all of it, a lot, some of it is necessary to fit in, but a lot of your desire falls. And then at that point, you're like, look, I don't want to use money. To gain what I think is a higher position in terms of status. I want to use money as a tool for independence and to give my immediate family the most enjoyable, happy, laughter-filled, content life that they can live.

• 43:23Dave Meyer?

  Right, absolutely, yeah.

• 43:24Speaker 01

  And so I think that that moved that moved the needle a lot for me.

• 43:26Dave Meyer?

  That's a really good way to put it. And I'm not like, you know, arguing for so like, complete financial restraint or extreme budgeting. Like, I'm not like that personally. I spend money, but you get around these people and sometimes you do start to see like, oh, my God, they have so much money. Like, how could it be? And it's hard to sort of sometimes just sit back and be like, no, I'm I'm good. Like, I I've worked hard. I'm following my goals. And just being content with your plan that you genuinely feel is best for you and your family. I will just say, I think it's easier said than done. It can be difficult to do.

• 44:02Speaker 01

  I don't know if I've ever told a story, but when I was, uh, this was when I was young, back when I was a valet at a hotel in Los Angeles. I've told lots of stories from that era. But one that stood out, it was, um, one of the members at the hotel who came in all the time was one of the founders of Quicksilver Clothes, you know, the surf clothing brand. It was like huge in the 90s and early 2000s. One of the founders made a huge fortune for himself. And he drove a silver Toyota Tacoma. And he was the nicest guy, so polite, so kind, always smiling and looking you in the eye and saying, good morning, hey, you know, so great. And then there were five dozen other members at the club who drove Rolls Royces and Lamborghinis, and they were pricks, and they were rude,

• 44:43Speaker 01

  and they were jerks, and they did not have a fraction of the wealth that the silver Tacoma guy.

• 44:48Dave Meyer?

  Yeah.

• 44:49Speaker 01

  And I remember at that age being like, this guy, the Quicksilver guy, that's my boy. That's that's my idol. That's who I look up to. And I didn't look up to him because his car had less horsepower or because he was cheap in his car. I looked up to him because I'm like, that guy's comfortable with himself. He has no desire to show off for other people. And the reason that I knew he was comfortable with himself is because he was so kind. And so many of the other people were such jerks.

• 45:12Dave Meyer?

  Yeah.

• 45:12Speaker 01

  And I think a lot of times, there's a saying that I love of like, if you want to find the smartest person in a room, find the nicest person. That's The smartest person in the room. That's the person who understands how long term relationships works. That's the person who has the mental horsepower to look beyond our like caveman emotions of competing with each other and fighting with each other. And so that was, I, I, I always liked that. Like he just had a simple content life that I really looked up to.

• 45:36Dave Meyer?

  Absolutely. And that Tacoma is probably still running too.

• 45:39Speaker 01

  I love it. It probably has 300,000 miles on it.

• 45:42Dave Meyer?

  Crushing it. Absolutely. Well, this has been great, Morgan. I actually just have one more question for you. It's actually about housing. Cause I saw you, you had written something on Substack about, I think you said the, the majority of societal problems are all downstream of housing affordability. I'm curious if you could just talk about that. Cause we talk about housing affordability and the lack thereof a lot on the show. I'm just curious your take on it.

• 46:05Speaker 01

  Yeah, I think it's, I think it's not an exaggeration that so many societal problems are downstream of housing. Cause the evidence is when young people can't afford to buy a house for themselves. They get married less often, they have fewer kids, they're more likely to have drug problems, alcohol problems, mental health problems. They have less successful careers. It is one of the boxes that we check as a society to show that you've made it to the next level. That you have progressed from childhood into adulthood is I can afford a house. And we have, I, I think this is the right phrasing. We have made a choice. That's what it is to make housing as expensive as it is. And the very simple economics of housing right now and why it's so expensive is we don't build enough homes.

• 46:48Dave Meyer?

  That's right.

• 46:49Speaker 01

  Like plain and simple, there are so much more demand than there are available homes for sale. And the reason that we're not building homes is not because we're out of lumber or out of carpenters. It's a local issue of not allowing homes to be built where people want to live.

• 47:05Dave Meyer?

  Yep.

• 47:06Speaker 01

  And it should be more of a pitchfork and torches issue with people if they knew that this was a choice. Look, there are times when like gas prices are really high and they're like, there's not a lot we can do about it. It's a sometimes, sometimes a war that's out of our hands. Or in the early 2000s, we don't have the technology to figure out fracking and horizontal drilling. Like that was a technical problem. Housing is not a technical problem. It's a regulatory issue. And I, I don't think it's more complicated than that. Of course, there are more variables in housing than just that. But the 800 pound gorilla of why we don't build enough homes and therefore why housing is so expensive is because we don't allow the homes to be built and we could make, we could change that decision tomorrow. And once you change that decision.

• 47:49Speaker 01

  You would see, like, all those problems would flow down from there. Within due time, it might take five or 10 years, but I would bet the marriage rate would go up, the fertility rate would go up, drug use would go down, even down to like, when you rent an apartment, you are a guest in your community. When you own a home, you're like, I have a literally a vested interest in making sure this community is on the up and up, and I'm gonna vote differently, I'm gonna pay attention to local policies more than I would, versus if you're just kind of a transient renter, and you're like, I'm in and out, I might move next year, I don't really have any real footing in this. So it has a huge societal impact beyond just the real estate market.

• 48:29Dave Meyer?

  I couldn't agree with you more. I know a lot of people are surprised when real estate investors say this, but I, I think the housing affordability is one of, if not the biggest problem that we face in our society right now. It creates all these downstream issues, and I would personally just like to see these changes get made, even if that means appreciation on assets I own goes down. Like, I would be fine with that. I think it's much more important for our society that people have this access. It's a big part of the social contract in the United States to be able to own a home.

• 49:00Speaker 01

  I would leave you with one little thing, too, to think about. The flat screen TV in 2003 cost $10,000. They're, they're $200 now.

• 49:09Dave Meyer?

  It's crazy, man.

• 49:10Speaker 01

  When, when, when you let a market build what it needs to and become as efficient as it needs to, you can drive the price through the floor. And the fact that we have not done something similar to that in housing, like, look, the housing prices are not gonna drop 90%, just, just based off of the supply and demand, but for a physical good, you can drive the price down substantially if you just build enough of it. That should be very obvious. And that's, that's the issue with housing, is that we simply just don't build enough.

• 49:37Dave Meyer?

  Absolutely. And that does not mean real estate investing, like, won't work. I know people hear these things and they, they panic about it, but like, this business... Well, it worked in times of no appreciation. You still get cash flow and amortization and tax benefits. There's like all these things. There does not need to be scarcity of housing for this to be an industry. Well, Morgan, this was so much fun. I really appreciate it. It was great talking to you. Super excited for you to join us at BPCon. If you guys haven't got tickets yet, it's this October 2nd through 4th in Orlando. Morgan is going to be our keynote speaker on the opening night. You can grab tickets at biggerpockets.com/conference. And Morgan, before BPCon, if people wanted to learn more from you, where should they do that?

• 50:19Speaker 01

  Well, my, my three books, The Psychology of Money, Same as Ever, and The Art of Spending Money. Every good and sometimes not so good idea that I've ever had about money and finance made its way into one of those books. That's where you can check it out.

• 50:30Dave Meyer?

  They're awesome. I, I highly, highly recommend it. It's, they have changed my philosophy and hopefully some of my behavior around money. So definitely check those out. Thanks again, Morgan.

• 50:40Speaker 01

  Thanks so much for having me.

• 50:40Dave Meyer?

  And thank you all so much for listening to this episode of the BiggerPockets Podcast. We'll see y'all next time.

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