The Art of Spending Money with Bestselling Author Morgan Housel

Barry sits down with New York Times Bestselling author of The Psychology of Money, The Art of Spending Money, and Same As Ever. They discussed different sections of market cycles and the psychology of money. Morgan also discussed the role of innovation and financial growth in history. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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

• 0:00Speaker 00

  At Brookfield, we believe you can own wealth that's measured in generations. Because true ownership looks beyond today and beyond cycles. For 125 years, we've built long-term wealth through expertise, discipline, and a clear vision for the future. Providing investors access to alternative strategies built for what's next. Brookfield. Own what's next. Learn more at Brookfield.com/own. This is not an offer to sell or investment advice. Investing involves risks, including loss of capital. Past performance is not indicative nor a guarantee of future results. Please review performance and offering materials before investing.

• 0:38Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices.

• 1:21Speaker 01

  But according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

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• 2:43Speaker 01

  This is Masters in Business with Barry Ritholtz on Bloomberg Radio.

• 2:50Barry Ritholtz?

  On the latest Masters in Business podcast, my conversation with Morgan Housel. I've known Morgan for, I don't know, 15 years, and I've loved all of his writing and his books. The Psychology of Money is one of the best bestsellers in all of personal finance, coming up on 10 million copies sold. Amazing. Same as ever. Timeless stories about human nature. The new book, The Art of Spending Money: Simple Choices for a Richer Life, drops today. I thought this conversation is one of our best. Morgan is a deeply thoughtful person. Everything he says comes from both experience and academics. I love the way

• 3:33Barry Ritholtz?

  he puts stories together with lessons. I thought the conversation was fascinating, and I think you will also. With no further ado, my conversation with author Morgan Housel. Let's, for people who may not be familiar with you and your career, let's give them a little bit of background. You go to University of Southern California where you get a BA in economics. What was the career plan?

• 3:58Speaker 04

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

• 4:18Barry Ritholtz?

  Especially after the crash in 2000.

• 4:20Speaker 04

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

• 4:45Barry Ritholtz?

  That's hilarious.

• 4:46Speaker 04

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

• 5:00Barry Ritholtz?

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

• 5:15Speaker 04

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

• 5:24Barry Ritholtz?

  What about Monday?

• 5:25Speaker 04

  That's not for me.

• 5:26Barry Ritholtz?

  That's great. So I don't have to work weekends. Fantastic. See you Monday, right?

• 5:30Speaker 04

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

• 5:46Barry Ritholtz?

  So were you an analyst or a finance writer?

• 5:49Speaker 04

  I was a writer from day one. I was still in college at the time. And I started covering banking stocks at The Motley Fool in 2007.

• 5:56Barry Ritholtz?

  Good timing.

• 5:57Speaker 04

  And I've been a writer ever since.

• 5:59Barry Ritholtz?

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

• 6:10Speaker 04

  Yeah.

• 6:10Barry Ritholtz?

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

• 6:17Speaker 04

  It had so much influence.

• 6:18Barry Ritholtz?

  Really?

• 6:19Speaker 04

  Because I grew up in a middle-class family, great town, but not a wealthy town, not poor, not out in the sticks, but a decidedly middle-class town in California.

• 6:28Barry Ritholtz?

  Where was this?

• 6:29Speaker 04

  Just outside of Lake Tahoe, California. Also before tech money infiltrated Lake Tahoe.

• 6:33Barry Ritholtz?

  Right.

• 6:33Speaker 04

  So back then, it was truly just a small, little mountain town. It's not anymore because tech money came up.

• 6:37Barry Ritholtz?

  Right.

• 6:37Speaker 04

  But, and so I didn't have much concept of wealth. Because in the town that I grew up in, regular people had old pickup trucks and rich people had new pickup trucks. That was the stratification of wealth. That was as far as it got. And so, but anyway, I started working at these fancy hotels and all of a sudden, people were starting to come in in these cars that just blew my mind. Not just BMWs and Mercedes, but Ferraris, Lamborghinis once in a while. And then I went to college in Los Angeles, stayed working as a valet at even nicer hotels in LA, and then it was Rolls Royces and Aston Martins. And it was just a level of wealth that I didn't know existed. And in my young, you know, 19, 20-year-old mind, it was just so appealing to me. I was just overwhelmed with like, whatever

• 7:21Speaker 04

  that is, I want it. I want some of that immediately. And, but it was also, I think I, not on purpose, but I think I just kind of started picking up the little subtle clues of the psychology of rich people. The first thing that was, that was very apparent, was that a lot of them were not that happy. A lot of them were just kind of old, bitter, broken men, arguing with their wives.

• 7:45Barry Ritholtz?

  Second wives, third wives.

• 7:46Speaker 04

  Third wives, right, right. Always stressed, always barking on the phone. And it was all the time. It was all the time. And I remember picking up on that and being like, hey, on one hand, I really want that. On the other hand, like, is that supposed to be my role model? Because it doesn't look that great. And I know a lot of middle-class people from the town I grew up in who seem a hell of a lot happier than that guy. And so I think that was, I started picking up on kind of the psychology of wealth. Not intentionally, but it was a very good window into that aspect of wealth. Because in my little pea-sized 19-year-old brain, it was in my, what I assumed was, "You have so much money, you must just be a walking ball of happiness." That was, that was the intuition that I had, but it was so clearly not that.

• 8:30Barry Ritholtz?

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

• 9:01Speaker 04

  Yeah.

• 9:02Barry Ritholtz?

  Not the secret to happiness.

• 9:04Speaker 04

  I think what is, tends to be true, and there's no hard and fast rules here, this is not black and white, but it tends to be true that wealthier people might have fewer bad days than poorer people. I don't know if they necessarily have more good days.

• 9:17Barry Ritholtz?

  That's a great way to frame it.

• 9:18Speaker 04

  That is a lifestyle improvement, to have fewer bad days, to not have to worry and stress about making rent and healthcare and whatnot. To remove that is a lifestyle improvement. But it is not happiness. It is different. In the same way that you and I are fortunate enough to wake up every morning not worrying about catching polio.

• 9:35Barry Ritholtz?

  Right.

• 9:36Speaker 04

  That's a lifestyle improvement.

• 9:37Barry Ritholtz?

  Or what you're gonna eat that day.

• 9:40Speaker 04

  Or, exactly.

• 9:41Barry Ritholtz?

  Or what you eat that day.

• 9:42Speaker 04

  Right. And relative to the standards of 100 years ago, that is an unbelievable lifestyle improvement, but it's not happiness. Because you and I didn't wake up this morning thinking about it.

• 9:50Barry Ritholtz?

  That is simply Maslow's hierarchy of basic needs.

• 9:53Speaker 04

  Right.

• 9:54Barry Ritholtz?

  That's different than happiness, than contentment, which we'll talk about.

• 9:57Speaker 04

  Yeah.

• 9:58Barry Ritholtz?

  So, so let's stay with your writing at The Motley Fool. One of the things, two of the things that really distinguish your writing, first, you're a great storyteller, and you find some fascinating stories, but second, you figured out early that finance is not so much about math as it is about behavior.

• 10:20Speaker 04

  Yeah.

• 10:21Barry Ritholtz?

  Tell us how you stumbled into an interest in behavioral finance.

• 10:26Speaker 04

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

• 10:50Barry Ritholtz?

  You're counter-programming.

• 10:51Speaker 04

  Right, and so I had to figure out what to do. For a while, it was macro. This was post-financial crisis and I was like, I'm gonna study the forces of the economy. And that, not intentionally, but kind of just pushed into behavior and psychology. I think a lot of that was, as I was studying macro, this realization, and you've been a big part of this as well, of realizing that there is nothing in a macro textbook that will explain 2008. And so as a writer, as I was trying to explain what just happened in the aftermath of the GFC, it was, there's nothing in there that explained why people did what they did. Nothing in an economics textbook or the academic framework that would explain the housing bubble that preceded it, the behavior during the crash, the pessimism after it, like, not much there.

• 11:35Speaker 04

  But if you looked at it through the lens of psychology, or sociology, or political science, or evolution, all these other fields, like, had a lot to say. And could explain why people were doing the things they do. So that was just the subtle coming to terms with the idea that money and finance is not the study, is not the study of finance, it's a study of how people behave with money.

• 11:55Barry Ritholtz?

  So, I'm pulling forward a quote from later in our conversation that's dead on with that insight. Risk has two stages. First one, it actually hits, then when the scars influence our subsequent decisions. So you graduate into the 08, 09 disaster.

• 12:17Barry Ritholtz?

  Everybody post financial crisis, and I shouldn't say everybody, but so many people post financial crisis was, hey, that was just the first leg after March 09. Wait, wait for the second leg.

• 12:30Speaker 04

  Remember the phrase double dip recession?

• 12:31Barry Ritholtz?

  That's right.

• 12:31Speaker 04

  Everybody said it 14 times a day.

• 12:33Barry Ritholtz?

  82 was decades before.

• 12:35Speaker 04

  Every, if you go back to 2010, particularly 2011, everybody in the financial media said the phrase double dip recession every hour. It was, it was, it was inevitable. It was absolutely inevitable. The other version of this is at the end of World War II, 1945, it was a foregone conclusion that nobody disagreed with, that the US economy would fall right back into the Great Depression. That, that in the absence of military spending, it was not just going to contract and revert to the mean, it was going to go back to the 1932 lows of desperation. And in hindsight, it didn't happen, but it was a foregone conclusion back then. It is always the case that the simple narrative, and oftentimes a simple narrative is just extrapolating whatever just happened, is going to be the most appealing, the most logical, it makes the most sense.

• 13:18Speaker 04

  And the, in the cyclical nature of economies though, like we, we all know in hindsight what happened during those periods, that actually the end of World War II, there were some mild recessions in the late 40s and 50s. But by and large, that was actually the beginning of an epic boom in the 50s and 60s. And after the GFC, you know, 2009, 2010, that was in the stock market and economically, the beginning of a boom. And it's, it's almost impossible to realize that in real time, as it was almost impossible to realize in 99, 2000, that of course in tech stocks, but also in the broader economy, that was about as good as it gets. And when it's about as good as it gets, that was, it was so easy to extrapolate from there, but that was actually the end of the good days.

• 14:00Barry Ritholtz?

  You know, the shocking thing about the post-financial crisis period, and I'll take a little credit for, for floning this phrase out there, it was the most hated bull market in history.

• 14:11Speaker 04

  Yeah.

• 14:11Barry Ritholtz?

  By like October 09, people were talking about, wait for the next 30, 40% dip. And you mentioned hindsight, our hindsight bias keeps us looking backwards and ignoring the fact that, hey, when is a down 50% market in the US? Not a great entry point. All right, 1929, but that is the exception to the rule. Every other time it's been down, cut in half, I'm a buyer.

• 14:36Speaker 04

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

• 14:46Barry Ritholtz?

  That's right.

• 14:46Speaker 04

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

• 15:10Barry Ritholtz?

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

• 15:20Speaker 04

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

• 15:40Barry Ritholtz?

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

• 16:07Speaker 04

  Now, I remember in, in 2011, when there was the double dip recession and the market did fall, I don't know, 20 or 30%, that was probably more pessimistic in 2011 than people were in 2009. 2011, people were like, this is it. This is over.

• 16:18Barry Ritholtz?

  We're going back down to the lows.

• 16:19Speaker 04

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

• 16:40Barry Ritholtz?

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

• 16:54Speaker 04

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

• 17:18Barry Ritholtz?

  Narratives become memes.

• 17:19Speaker 04

  Yeah, you know, Ben Graham had the quote, "The stock market is a voting machine," oh no, maybe it was Keynes, "a voting machine in the short term and a weighing machine in the long run." But he said that 100 years ago, and it's still true. But there, because of how the world works today, stocks can remain voted on, not necessarily weighed, for probably decades. Tesla has been a voted upon stock, not a weighed upon stock, for its entire existence. And maybe that will change someday, but I think in previous eras, in the Ben Graham era, or even not even, you know, 20 or 30 years ago, you could have brief momentary flashes of insanity. And that was probably the late 90s. You had, you know, 18 months of just pure insanity,

• 18:02Speaker 04

  where everything was narrative driven. It wasn't really earnings driven. And now you can have that going on for very long periods of time. I mean, how long has Hertz and GameStop been meme stocks? Like years, five years?

• 18:17Barry Ritholtz?

  Is Hertz still active?

• 18:17Speaker 04

  I think it's still a thing.

• 18:18Barry Ritholtz?

  Is it still a Reddit favorite?

• 18:19Speaker 04

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

• 18:37Barry Ritholtz?

  So let me mix your Keynes quote with your own quote. "In the short run, markets are probability machines. In the long run, they're..." Narrative machines. That's a good blend of you and Keynes. There are worse people to marry. All right, one or two more questions in this segment before we move on. You addressed one of my favorite pet peeves about uncertainty in a sentence that I love. Quote, "There's rarely more or less economic uncertainty, just changes in how ignorant people are to potential risks."

• 19:15Speaker 04

  Yeah.

• 19:16Barry Ritholtz?

  That sums it up perfectly. I hate the uncertainty meme because by definition, the future is always inherently uncertain.

• 19:23Speaker 04

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

• 20:01Barry Ritholtz?

  And if you go back in time.

• 20:03Speaker 04

  Completely insane.

• 20:03Barry Ritholtz?

  I'm going to tell you, there was a lot of certainty in late 99.

• 20:07Speaker 04

  Yeah.

• 20:07Barry Ritholtz?

  Stocks grow to the sky and you go back to March 09, there was certainty that stocks were going to zero.

• 20:12Speaker 04

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

• 20:37Barry Ritholtz?

  Let's talk about luck. I just wrote something about this and found a quote of yours afterwards that I would have loved to use. Most people, when they talk about luck, increasing the surface area of your luck, luck is where preparation meets opportunity. Your definition of luck recognizes that it's something fun. fundamentally outside of your control.

• 20:58Speaker 04

  Yes.

• 20:59Barry Ritholtz?

  Quote, "You can't believe in risk without also believing in luck because they're fundamentally the same thing, an acknowledgement that so much is outside of your control."

• 21:08Speaker 04

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

• 21:18Barry Ritholtz?

  It's hard work and skill.

• 21:19Speaker 04

  It's, it's a value. I, I commend you for it, but it's not luck. Luck is you were born in this era. Luck is your parents told you X, Y, and Z. Luck is you haphazardly met this person. You did not do anything intentionally to do it. It was completely outside of your, your control. The biggest of which is where and when you were born that have an unbelievable impact on this. Bill Groats, a great bond manager, I'm sure he's been on the show before. He, he spoke about this one time that, you know, he was a bond manager from the early, you know, the, the bulk of his career was during the largest decline in interest rates that's ever occurred. And he wondered himself in this piece that he wrote many years ago, like, would he have had the success he did if he was born 10 years earlier or 10 years later?

• 22:02Speaker 04

  Would Buffett have had the same success if he was born 10 years earlier or 10 years later? I would, I would venture to say the answer is no. And so are both of those people very hardworking, very intelligent, able to capture opportunity? Yes. Were they also unbelievably lucky in something they had no control over? Which is when they were born? Yes, as well.

• 22:19Barry Ritholtz?

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

• 22:47Speaker 04

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

• 23:19Barry Ritholtz?

  I'm going to say no. For me personally, I think it's no. I think right place, right time.

• 23:24Speaker 04

  Yes.

• 23:24Barry Ritholtz?

  And, and got. I literally just finished a chapter for someone else's book on how random so much of the world is. And I have to tell you, the first couple of times a billionaire tells you how important luck was, you kind of shrug it off as, hey, these guys are a little false humility. The person who disabused me of that notion was Howard Marks, because he said, you have to be smart, you have to be hardworking, but you also have to get lucky. And I'm like, come on, Howard. Why do you say that, you know, look at what you've done since you graduated Columbia Business School? And his answer was, everybody I went to school with was super smart. They were all incredibly hardworking. Not all of them

• 24:08Barry Ritholtz?

  became wildly successful. And you have to just acknowledge how much of this is just serendipity. And when a guy like that, who has no false humility, when he says, no, I could give you 10 instances where my life changed because of dumb luck, you kind of have to acknowledge that, right?

• 24:26Speaker 04

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

• 24:33Barry Ritholtz?

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

• 25:03Speaker 00

  At Brookfield, we believe you can own wealth that's measured in generations. Because true ownership looks beyond today and beyond cycles. For 125 years, we've built long-term wealth through expertise, discipline, and a clear vision for the future, providing investors access to alternative strategies built for what's next. Brookfield, own what's next. Learn more at Brookfield.com/own. This is not an offer to sell or investment advice. Investing involves risks, including loss of capital. Past performance is not indicative nor a guarantee of future results. Please review performance and offering materials before investing.

• 25:42Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume, so writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 26:24Speaker 01

  and hiring practices, but according to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 27:08Barry Ritholtz?

  I'm Barry Ritholtz. You're listening to Masters in Business on Bloomberg Radio. My extra special guest is Morgan Housel. He is the bestselling author of Psychology of Money as well as Same as Ever. His latest book, The Art of Spending Money: Simple Choices for a Richer Life. Before we get to the book specifically, I want to talk a little bit about your writing process and, you know, some of my favorite essays of yours take historical stories, world wars, business failures, unlikely successes, and I specifically recall Kitty Hawk's story and the solo sale competition around the world, and you connect

• 27:51Barry Ritholtz?

  them to timeless lessons on behavior and money. Tell us a little bit about your research process. How do you find these amazing and crazy stories?

• 28:02Speaker 04

  I think it started with a survival technique as a writer. Because as a finance writer, if I got up every day and wrote, here's what the Dow did today, you're out. There's people who can do that faster than you. You're not really adding much value if you do that. And so as a writer, it was like, hey, if I need to get people's attention, I need to make it interesting. And so, and one of the ways to do that, because myself as a reader, what I enjoyed when other people did, is when they tied the rest of the broader world into finance. Here's a story that has nothing to do with money. It's a story about evolution or World War II, whatever it might be. And let's take the lesson from that and tie it. I loved when people did that. I loved it, loved it, loved it, and wanted to do it myself. The second part is, I think it got you closer to the truth. That when you study those fields, whatever it might be, politics or military history, you're studying behavior.

• 28:46Speaker 04

  And it's the same behaviors that impact investors in the same way. And so a lot of even finance professionals get into trouble when they view and study finance through the very narrow lens of finance without realizing that it's a very broad field of how people behave. So that was the first of it. The second is, when you start looking for it, when you have the little seed in your head, that when you're reading about a broad array of fields, if you have a little bird in your head that says, how does this tie back? Like, what is the behavior and how can tie it back to money? You see it everywhere. You can't stop seeing it. And you realize like how interconnected our behavior is. Because the same way that you and I think about risk and investing, also impacts a lot of things that we think in life. Our friendships, our relationships, our health.

• 29:28Speaker 04

  Tie back to the same framework of how we think about risk and money. It's very tied together. The whole world is kind of woven together in those. And so you start seeing these same themes over and over and over again about how compounding works, how risk works, how envy works. It's the same. And I also think if you see a behavior repeat in several different fields, you found something that is like infinitely important. And then you can be like, oh, that's a, that's a good one. I need to talk more about that in finance.

• 29:54Barry Ritholtz?

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

• 30:11Speaker 04

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

• 30:27Barry Ritholtz?

  Oh, really?

• 30:28Speaker 04

  I think so.

• 30:28Barry Ritholtz?

  Cause you have a lot of.

• 30:29Speaker 04

  Slam dunk.

• 30:30Barry Ritholtz?

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

• 30:41Speaker 04

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

• 30:58Barry Ritholtz?

  Yes.

• 30:58Speaker 04

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

• 31:01Barry Ritholtz?

  And everything to do with ego and behavior.

• 31:03Speaker 04

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

• 31:18Barry Ritholtz?

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

• 31:22Speaker 04

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

• 31:37Barry Ritholtz?

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

• 31:45Speaker 04

  Yeah.

• 31:45Barry Ritholtz?

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

• 32:04Speaker 04

  Yeah.

• 32:05Barry Ritholtz?

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

• 32:13Speaker 04

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

• 32:35Barry Ritholtz?

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

• 32:37Speaker 04

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

• 33:05Barry Ritholtz?

  What's the rope attached to?

• 33:06Speaker 04

  Exactly, exactly.

• 33:07Barry Ritholtz?

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

• 33:10Speaker 04

  But it was the analogy that was given in their biography by David McCullough was if you and I saw a demonstration of time travel today, we would be like, okay, but it's just an illusion. Like you didn't actually do that. Like I saw, I saw what you did, but that's, but there's, but there's a trick here. And that's how they viewed flying at the time. And it really took almost about half a decade before people were like, oh, this is, this is the thing. This is, this is big. And I think that's true for a lot of new technology, that the gap between discovering it and it becoming a world-changing thing can be years, if not decades. It's almost never that it happens overnight, that we come up with a new technology and people are like, that's it, that's the thing.

• 33:49Speaker 04

  People talk about how quickly ChatGPT was, was, was brought into the fold, you know, within a year of it coming out, there were hundreds of millions of users. But AI has been a thing for 30 years, 40 years. So the idea that like, oh, we recognized it immediately, like, no, it took a lifetime to get there.

• 34:04Barry Ritholtz?

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

• 34:47Speaker 04

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

• 34:57Barry Ritholtz?

  Archegos, very recently, 20 billion to zero.

• 35:00Speaker 04

  And the more famous example is Long Term Capital Management, Jesse Livermore. Going down the list of people who are unbelievably skilled at getting rich and completely brainless at staying rich. They're two very different skills. And when you see either a person or a company that has both equal skills of getting rich and staying rich, it's a rare thing. And some companies have this. Microsoft has had that. Apple, no, I'll take that. I'll take Apple back for their.

• 35:25Barry Ritholtz?

  Since 99 anyway.

• 35:26Speaker 04

  Since 99. They went through a very rough period before that. Microsoft is probably the quintessential example of a country, a company that is unbelievable.

• 35:32Barry Ritholtz?

  Or country, in that matter.

• 35:33Speaker 04

  Unbelievable at getting rich and has an equal ability at staying rich in terms of how it manages its balance sheet and staying relevant and whatnot. It's a very rare skill. And it's often a contradictory skill because to get rich, you need optimism and risk-taking. And to stay rich, you need almost the exact opposite. You need a level of paranoia and conservatism to keep you around. You need that Jekyll and Hyde personality to do well over long periods of time.

• 35:57Barry Ritholtz?

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

• 36:32Speaker 04

  Pretty much. Of all the robber baron families here in New York who managed the money, the Carnegie's and the Rockefellers did very well at using their huge wealth to better society and to make their heirs to give them good lives and to keep it around for several generations. The Vanderbilts did by far the worst, by far and away the worst. So when Cornelius Vanderbilt died, adjusted for inflation, he had about 300 or 400 billion dollars. Just an unbelievable fortune. As you mentioned, within about three generations, there was virtually nothing left. And in between those three generations were a series of heirs who, by and large, with few exceptions, were miserable. Were miserable, miserable people. And the reason why was very clear when you study their biographies.

• 37:18Speaker 04

  The money completely controlled their personality. It told them who they could be. It told them where they could live. It told them the lifestyle they had to live. It told them who they can marry. It told them who they could be friends with. It had complete and utter control about it. They had all of the financial independence that anyone in history could ever imagine. And they had no intellectual independence. They had no lifestyle independence. They were completely dictated by the money. And it wasn't until the money was more or less exhausted that the first Vanderbilt heirs who didn't get anything could build a life of their own. And this is now very well-known. The first Vanderbilt heir who virtually didn't get anything is Anderson Cooper. His mom was Gloria Vanderbilt.

• 37:58Barry Ritholtz?

  A designer who famously built her own fashion shop.

• 38:02Speaker 04

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

• 38:16Barry Ritholtz?

  Are you the master of your wealth or are you a slave to money?

• 38:20Speaker 04

  That's it.

• 38:20Barry Ritholtz?

  Really is the key question. You know, you talked about the Rockefellers versus the Vanderbilts. I had the CIO of General Atlantic on, and General Atlantic is the money that comes from the duty-free shops, which has blown up to be a spectacular fortune. The founder you discuss in the book spent most of his life giving away all his money, and he couldn't be happier. Tell us about him.

• 38:49Speaker 04

  So the founder's a guy named Chuck Feeney. Passed away a couple of years ago. Unbelievable story that he has. Started duty-free store, made for him personal fortune, about $10 billion.

• 38:58Barry Ritholtz?

  And this is 20, 30 years ago.

• 38:59Speaker 04

  Yes, a lot of money. The well-known part of Chuck Feeney's story that's been well documented is that he gave 99.99% of it away.

• 39:07Barry Ritholtz?

  During his lifetime, not in his will.

• 39:09Speaker 04

  I think that's...

• 39:10Barry Ritholtz?

  Out regularly.

• 39:10Speaker 04

  I think the statistic was he took out $2 million with an M to live off of. Lived in a small apartment, flew coach, lived like a complete and utter ordinary person and gave $10 billion away. That's the well-known part of it. The less well-known part of this story that I think is actually more important is that if you go back to the 80s, when he first made his fortune, he lived like a billionaire. He had mansions and yachts and a private jet, lived like the quintessential billionaire would.

• 39:37Barry Ritholtz?

  And hated it.

• 39:39Speaker 04

  A sense of it was not for him. He has a quote that I love. He said, "I realized that I was happy when I was giving money away and I was not happy when I was not giving money away." And so he chose, he rejected that and chose to live this very frugal life that he had. And what I love about that is not that he lived frugally. Like, you know, he was kind of obsessive about it in a way that I would not do. I don't think you would do.

• 40:01Barry Ritholtz?

  You can fly in front of the bus. You don't have to sit in the back if you're giving away $10 billion.

• 40:04Speaker 04

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

• 40:25Barry Ritholtz?

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

• 40:53Speaker 04

  I think a lot about nostalgia. I'm a very nostalgic person, so I like, I think about it a lot in my own life. And it tends to be true that we massively overestimate how good the past was because we know how the story ends.

• 41:04Barry Ritholtz?

  Yes.

• 41:05Speaker 04

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

• 41:47Barry Ritholtz?

  If it bleeds, it leads.

• 41:48Speaker 04

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

• 41:56Barry Ritholtz?

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

• 42:13Speaker 04

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

• 42:38Barry Ritholtz?

  Not Morgan's bought a really cool red Ferrari?

• 42:41Speaker 04

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

• 43:27Barry Ritholtz?

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

• 43:37Speaker 04

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

• 44:21Speaker 04

  And you can imagine too, the 95-year-old billionaire who's in very poor health. Everything he wants, not what he needs, kind of thing. But I think that afflicts a lot of people.

• 44:30Barry Ritholtz?

  You know, I'm trying to remember who it was. It might have been Noah Smith. We were involved in a group discussion on wealth and happiness. And I think it was Noah who said, "You have to break the world into two groups." And the group that's been divorced, or is in the middle of going through a divorce, the curve of their happiness relative to their money looks totally different. That it's such a miserable experience, almost no amount of money is going to change their headspace. And you wrote something related to that, which is unhappy people, regardless of how much wealth they have, are always going to be unhappy. That has to be, and happy people, the more money they get, up until a certain point,

• 45:14Barry Ritholtz?

  continues to bring at least some degree of happiness and perhaps some contentment. How true is that? Are some people just unhappy and nothing is ever going to change that?

• 45:25Speaker 04

  Yeah, I think that's true. I mean, that's one of the most important little quirks of the broader topic of the relationship between money and happiness. Does earning more money make you happy? The asterisk there is that if you start out... As an unhappy, anxious, depressed person, it's unlikely that earning money is gonna make you happier. It's not gonna fill the hole that you needed to fill. But if you start out as a pretty happy, joyful, healthy, content person, earning more money is leverage on who you already are. It's like in either direction, it's just leveraging who you already were to begin with. And so, yes, you can find lots of examples of people who earned a lot of money and had an amazing life. The money made them very happy. Most of those people still would have been happy anyways if they earned less. And we can find plenty of examples of the cranky, old, crotchety billionaire.

• 46:08Barry Ritholtz?

  Right.

• 46:09Speaker 04

  And they probably would have been cranky and crotchety. There's no amount of money or success that would have changed that at its core.

• 46:14Barry Ritholtz?

  That's really amazing. Really, the last question. So, right now, The Psychology of Money is on pace to hit 10 million copies. Since this segment is on your writing process, as you were putting this together, and I remember speaking with you as you were writing this.

• 46:31Speaker 04

  Yeah.

• 46:32Barry Ritholtz?

  And stitching together a whole bunch of work, did you have any idea, hey, I'm on to something? Or did it just feel like, I got a deadline and I'm not gonna make it?

• 46:41Speaker 04

  Okay, 100% the latter. 100% the latter. I think it's true that, in many aspects of life, that 90% of virality is luck.

• 46:49Barry Ritholtz?

  We were talking about Derek Thompson and hitmakers and how random hit records are and the impressionists, and that book just goes through a run of, hey, but for this, this, and this, none of these things would be well-known and beloved. Is it really 90%? That's a wild number.

• 47:13Speaker 04

  And sometimes, I'm making that up, but that's what it feels like. I mean, the first print run of Psychology of Money was 5,000 copies, because all the data that we had at the time was, that would be a big success. And if you know anything about publishing, selling 5,000 books is no small feat.

• 47:26Barry Ritholtz?

  Right.

• 47:27Speaker 04

  To get 5,000 people to pull out their credit cards and pay for your words, that's a success.

• 47:33Barry Ritholtz?

  Can I tell you, it's so funny you say that. So I read the the initial manuscript over the summer.

• 47:41Speaker 04

  Yeah.

• 47:41Barry Ritholtz?

  And then the hard copy shows up a couple of weeks ago. And I went through it a second time. And as I'm reading it, I'm sitting on a big, comfortable chair in a well lit room with a lovely view out back. And I'm thinking, you know, I don't really need a lot of money to be happiness. I just need 27 bucks to buy a book to read each week. And what is more delightful than either lying in a hammock or sitting in a comfy chair and taking 2,000 hours of somebody's intellectual output for 27 bucks? Is there a bigger bargain in all of the world than purchasing a well written book?

• 48:23Speaker 04

  And a and a $30 hammock and a nice view and a and a and a warm cup of coffee? Doesn't doesn't take that much.

• 48:29Barry Ritholtz?

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

• 49:02Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs. And hands on experience matters more to recruiters than advanced degrees, with the company looking for people with raw innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting and hiring practices. But

• 49:46Speaker 01

  According to recruiters, advisors, and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company. And Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at chatgpt.com.

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• 50:57Barry Ritholtz?

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

• 51:26Speaker 04

  I think a lot of it was, if you asked me five years ago what my investing philosophy is, I could sit here for hours and tell you my philosophies of investing, and why I do what I do, and what the logic is behind it, and how it fits my person. I could talk to you all day about that, and you and I have over the years talked about that topic. But if you asked me five years ago, "What is my spending philosophy? How do my wife and I think about how we spend our money?" And I couldn't really tell you anything. I hadn't really thought about it. And as I look to you, there are literally tens of thousands of books written about how to grow wealth. Tens of thousands of books written about how to grow wealth. Virtually none written about what to do with it. It's one of the few areas in finance that like has not been trampled over yet. And I think part of the reason why is because we intuitively assume that nothing needs to be said about it.

• 52:10Speaker 04

  That yes, we know how complex markets are. And that's so we can talk all day about the intricacies of it. But when you talk about like spending money, I think most people's intuition at least is like you just spend it. You just buy things and then that's that's it's better. It's all good. And I think, but if you if you observe people, rich people, poor people, everybody in between, you realize it's not that simple. That there are some people who have gotten a lot out of spending money, have done it very well, have used it as a tool to live a better life. And there's probably an equal number of people who've done a very poor job about it for whom it controlled their personality.

• 52:42Barry Ritholtz?

  Equal, I would say a lot more.

• 52:44Speaker 04

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

• 53:01Barry Ritholtz?

  You're saying it's very subjective and it's not. It's called the art of spending money, not the science of spending money.

• 53:08Speaker 04

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

• 53:25Barry Ritholtz?

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

• 53:34Speaker 04

  That was JP Morgan.

• 53:35Barry Ritholtz?

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

• 54:03Speaker 04

  You see it a lot in a lot of fields, particularly politics, of the life that you have lived, the experiences you've had, the town that you live in, the employment situation that you faced during your life, makes up your view of the world, your model of how the world works, and therefore it influences what you think should happen next. And virtually everybody does this, that what you have, nothing is more persuasive than what you've experienced firsthand. And you can go out of your way to try to understand other people and be empathetic of what they've been through, but nothing makes more sense to you than what happened to you personally. And since we've all had very vastly different lives, different generations, different countries, different parts of the world, we all have different models of how we think the world works.

• 54:43Speaker 04

  And, and it's, you know, I, a criticism of my first book, The Psychology of Money, were people who would write and say, "What you wrote might be true for a college-educated, white, American male."

• 54:55Barry Ritholtz?

  Which is what you are.

• 54:56Speaker 04

  Which is what I am, guilty as charged. But they would say, in a way that I, they were absolutely right to say, "It's different for me in this country, in this generation, whatever it may have been." And I would say, "Yes, I totally get that. I tried to make the point in the book, but I'm still beholden to the lens that I have lived, as everybody is."

• 55:12Barry Ritholtz?

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

• 55:57Speaker 04

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

• 56:28Barry Ritholtz?

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

• 56:45Speaker 04

  I make, I make up these definitions, so this is just my, my view of it, but I would define rich as you have the income to buy the things you want. You can make your mortgage payment, you can make your car lease payment, whatever. You, you can purchase the lifestyle you want. Wealth, I would say, is having some level of independence. Over both financial independence, in order, the, the ability to work where you want, as often as you want, as, take time off when you need to, retire when you want to, but also, like, intellectual independence. You don't have to pander to other people. You don't have to pander to a boss, or to clients, or to regulators. You have the independence to be who you are, and wake up every morning and say, "I can do whatever I want today." That's wealth. And the interesting thing is, there are people who make millions of dollars a year who are

• 57:28Speaker 04

  rich, and have no wealth whatsoever. And there are people who make fifty thousand dollars a year, who are not rich, and are extremely wealthy, in their ability...

• 57:36Barry Ritholtz?

  Your grandmother, for example.

• 57:37Speaker 04

  I, I use the example of my, my late grandmother-in-law in the book. For thirty years, she lived off of nothing but seventeen or eighteen hundred dollars a month in social security. She had no pension, no assets, no, she was broke. Seventeen hundred bucks a month, social security. Happiest woman you'll ever meet in your life. Happiest woman you will ever meet, ever. She was perfectly content. She had no money, but she didn't want any of it. She was totally happy and content, working in her garden, and going for walks, and like, bird watching with her friends, it's all she wanted to do. And so, she had no financial wealth, and she was like, off-the-charts psychological wealth. She had total control over expectations. Part of it was, she was a child of the Great Depression, and like, that, and I'm sure that had a, had an impact on, back to, you know, we're, we're just mirrors of our past experiences, but...

• 58:22Speaker 04

  You and I know people who are extremely wealthy on paper, who are the opposite. They might be billionaires, they have financial wealth and they have no psychological wealth. And unlike my late grandmother-in-law, they wake up every morning being like, "It's not enough. I need more, I need more, I need more." So the difference between financial wealth and psychological wealth is a big part of it.

• 58:41Barry Ritholtz?

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

• 59:02Speaker 04

  I think a tremendous amount of it. And you don't need to be, to look very far to see that. I heard this great quote from the comedian Jimmy Carr recently. He said, "In your twenties, most people worry about what other people think of them. In your thirties, you say, 'I don't care what anybody thinks of me.' And in your forties, you finally realize the truth, which is that nobody was thinking about you all along." And it's such a wonderful, such a wonderful quote. The idea that nobody is thinking about you as much as you are, and nobody cares about your house, your clothes, your jewelry, nobody cares about it as much as you do. They're busy worrying about themselves. I think that realization, at least for me, was so liberating to be like, "Look, why am I trying to peacock for strangers if they're not even paying attention?

• 59:44Speaker 04

  What I want to do is use money as a tool to help the things and lever the things that actually make me happy, which is time with my kids, health, independence. Like, those things are great, but to the extent that I'm just using it to try to gain the attention of strangers who are too wrapped up in their own heads to even pay attention to me, then that was a very freeing and liberating moment."

• 1:00:06Barry Ritholtz?

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

• 1:00:19Speaker 04

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

• 1:00:38Barry Ritholtz?

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

• 1:00:40Speaker 04

  But if you asked the woman who was wearing the ugly sweater, the test subject, "How many people noticed?", she basically says, "Everybody." We always overestimate the extent that other people are thinking of us.

• 1:00:50Barry Ritholtz?

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

• 1:01:09Speaker 04

  I've been a big saver for my whole career. I know you have as well. You know, I live below my means, save and invest the majority of what I make. And I've never viewed it as saving money or delayed gratification. I think I always viewed it as purchasing independence. And I get a benefit out of that right now, today. And I think that, like, very simple reframing of it is important. If you view it as saving money, idle money, delayed gratification, it feels like a burden. It feels like work. And it feels like, yes, I have this wealth, but I need to go deploy it quickly. I think if you view it as every dollar that I save is a piece of my future that I own, and I get benefit out of that right now. I get benefit out of knowing that I'm independent today. It's not delayed. That's been an important shift in thinking for me.

• 1:01:54Speaker 04

  That all I want out of money is to be independent. I just want to be able to wake up every day and say, I can do whatever I want today. Even if most days I wake up and say, I want to work today. I want to be productive. It's my choice. And I can do it on my terms with the people who I like and quit when I want to, do what I want to. That is more valuable than any material possession you can have.

• 1:02:15Barry Ritholtz?

  I really didn't start spending money until my 50s. Like, I was a worker saver for most of my life. And it was only, you know, once, I never had a midlife crisis. But you start to realize, and certainly the pandemic, I think, very much made everybody realize, hey, life is short. You never know when your number comes up. So what am I waiting for? I think there was a lot of that going on. Have you made that pivot? Have you, like, because I know, I recall when you were in DC and you were looking for houses back on the West Coast. I remember you wrestling with, do I really want to buy a big house? How many kids are we going to have? How has that spending decision felt?

• 1:03:00Barry Ritholtz?

  How has your personal spending changed?

• 1:03:03Speaker 04

  My wife and I have loosened up over the years. Barry, you and I have known each other for, I don't know, 15 years. And we've been, we've spent a lot of time personally together, talking about our own lives and whatnot. And you've known, and I think you've probably given me playful grief about how cheap I used to be. It was, it's always been a thing. I've always been, or I was for a long time, very cheap. But my wife and I were totally content. And it always kind of, not bothered me, but I'd always found it interesting that people would give me so much grief about how little I spent. When the truth was like, we were, we were living a great life. We were, we were thrilled with what we did. And we've loosened up. We spend considerably more money now than we did five or 10 years ago. But it's always just been on the framework of independence. Because the truth was 10 years ago, I bought anything I wanted. It just wasn't that much. Didn't want that much.

• 1:03:48Speaker 04

  And today we buy anything we want. And it's just marginally a little bit more because we have kids and we've, and we've, you know, found new things that bring us joy and whatnot. And so it's always been, I always feel like we've been in control over it. Even when we were very frugal, or today when we've loosened up a little bit. It's always been our choice, not pushed or forced about by social forces and society and marketing.

• 1:04:10Barry Ritholtz?

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

• 1:04:18Speaker 04

  Yeah.

• 1:04:18Barry Ritholtz?

  So I will buy stuff, but I have to feel like I'm getting value for money. All the junk I've bought over the years, watches, cars, houses, whatever. Everything I own, I could sell for more than I paid.

• 1:04:31Speaker 04

  Yeah.

• 1:04:31Barry Ritholtz?

  Because I feel like, like I can't imagine walking into a dealership and saying to the, the manager of the Ferrari, Ferrari of Long Island, I'll, I'll take that 500,000. It's unconscionable to me.

• 1:04:47Speaker 04

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

• 1:04:50Barry Ritholtz?

  You know, it's not so much a midlife crisis as it's been a post pandemic, life is short. What are you waiting for?

• 1:04:58Speaker 04

  Yeah.

• 1:04:58Barry Ritholtz?

  And in, in the office, we are constantly telling clients.

• 1:05:03Barry Ritholtz?

  True story, I got a call from a client wants to buy a Ferrari, wants to buy a sailboat. And someone says, oh Barry's boater and he's a car guy. I talked to him.

• 1:05:12Speaker 04

  Yeah.

• 1:05:12Barry Ritholtz?

  And the answer I told him is, you've never been a sailor, why are you going to spend $2 million on a 50 foot sailboat that A. needs a crew and B. you'll use twice and sell for a half a million dollar depreciation. But by the way, this guy can buy a Ferrari a month for the rest of his life and still leave a nice estate to his kids. Go buy the Ferrari and not only buy the Ferrari, take the kids to the Ferrari high-performance driving class.

• 1:05:39Speaker 04

  Track, yeah, yeah.

• 1:05:39Barry Ritholtz?

  Which the dirty secret about all these racing schools are effectively defensive driving courses in drag. It's all about staying within your skillset, staying within the parameters of what the car can do. You become a better, safer driver, even though it's about apex turns and high, high-speed driving. And he did, he did that. He bought the Ferrari, loves it, took the fam to the course. Everybody had a great time. Bought the boat, sold it a year later, took a big hit. I'm not allowed to mention the boat anymore. So it's that sort of thing.

• 1:06:14Speaker 04

  But I think, I think you could easily imagine a client that was the opposite, that they're like, sailing has always been my dream.

• 1:06:20Barry Ritholtz?

  Oh, 100%.

• 1:06:21Speaker 04

  It's going to change my life.

• 1:06:21Barry Ritholtz?

  Absolutely.

• 1:06:22Speaker 04

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

• 1:06:26Barry Ritholtz?

  It, it really depends on who you are, what you are. The joke about boaters is every boater's favorite boat is their second to last. Cause they only, always go one step too far.

• 1:06:36Speaker 04

  Yeah.

• 1:06:36Barry Ritholtz?

  No, no, the 40 foot was plenty. I don't need a giant whatever. But, but that's very much a case. So, so let's bring this back to the book and spending. Talk about the connection between money and happiness. And what does spending for contentment mean? How does, how does happiness and contentment differ?

• 1:06:58Speaker 04

  I think one of the issues with money and happiness is that we chase the wrong emotion. We chase happiness and it seems very well intentioned. Of course, I want to be happier, you want to be happier. That's great. The problem is that happiness is always a fleeting emotion. You, people are rarely happy for more than a couple of minutes at a time. I think it's very similar to humor, where if I told you the funniest joke you've ever heard, you laugh for a couple of minutes.

• 1:07:19Barry Ritholtz?

  Couple of seconds.

• 1:07:20Speaker 04

  You don't last for ten years. Last for ten years. It just doesn't work that way. It's always fleeting. So I think when you daydream about the new house, the new car, the boat, when you daydream about how great that will feel, by and large, what you are imagining is being content with those things. You imagine yourself in the future house, sitting in the living room, and what you actually imagine is yourself being saying, "I'm good. I'm totally, I don't need anything bigger." This is, this is what, that's what feels good. The, like, picturing and imagining contentment feels amazing. And I think that's what people should aspire to, not necessarily happiness, but contentment. And I think that's, that's always a goal, because you're not truly independent if you're not fully content.

• 1:08:01Barry Ritholtz?

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

• 1:08:15Speaker 04

  Yeah.

• 1:08:16Barry Ritholtz?

  I remember having an argument with my sister. We were kids. "What do you mean you wouldn't buy me a car?" "All right, maybe I'd buy everybody a car." "What about this? What about buying a house?" And it was, we were having this hilarious debate. No one won anything. It was a dollar lottery ticket.

• 1:08:33Speaker 04

  Right.

• 1:08:33Barry Ritholtz?

  So, so that's always fascinating. Um, I love the story that Carl Richards tells. For people who don't know who Carl Richard is, he's the sketch guy, does these wonderful little diagrams, had a New York Times column for, for a long time. And, and he tells a story of being a big biker, loves cross-country biking. There was a bike he was jonesing for, $6,000 for this really high-end, ultra-lightweight titanium bank bike, and he couldn't bring himself to pull the trigger. And his wife says, "You bike four times a week. Go buy it." And he said a year later, "It's the best purchase he ever made." He goes out with friends, he has these memories from it. "It's just been wonderful."

• 1:09:15Barry Ritholtz?

  How do you distinguish between the purchases that are, that are gonna bring you joy and the purchases that are just empty, unsatisfying baubles?

• 1:09:26Speaker 04

  I think you kind of hit the nail on the head there when you said Carl buying the bike. It was great because of the experience, because he goes out with his friends. And he creates all these memories with it. And like, that's what made him happy. Not necessarily the bike, it was what the bike allowed him to do. I think it's similar for homes, where, well, buying a big mansion make you happier? Uh, the answer might be yes, if it makes it easier to have your friends over.

• 1:09:46Barry Ritholtz?

  And have your friends and family over. Any stories you tell in the book about people who have houses that feel like hotels are so large, needs a staff of 400 to run, nobody's happy in those houses.

• 1:09:57Speaker 04

  Right. And you can compare that to someone who lives in a 1,500 square foot house, but has their friends over every Friday for a barbecue and they stay up till 1:00 in the morning laughing with each other. That's a better life. That's a way better. So it's not what the possessions can do. It's how can they, or what the possessions are. It's how they can serve as a conduit into things that make you actually happier. And for everyone, those things exist. It's like, maybe buying a bigger house will make you happier. And buying a cool car, if you're spending time with your friends and you're going, you're taking your kids to, to, to track races and whatnot, as you're talking about, maybe that, that does make you happier. But it's usually not a direct thing. Because you can easily imagine buying the mansion, but having no friends, having no family. And you're sitting there alone, and then you're wondering why you feel unfulfilled. Why you dreamed for years of having this house and now you're sitting in it and you're like, I don't, I don't feel anything.

• 1:10:42Speaker 04

  Because what, the, the only situation which would actually make you happier and more content is what it would serve as a lubricant for, for bringing other people over that actually make you happy.

• 1:10:52Barry Ritholtz?

  Quick, quick car story that I think you'll appreciate. So, one of my projects was taking a, a 300,000 kilometer, 87, 1987, 9/11 coupe, that had been in an accident, a single owner for like 25 years. Uh, the body and the interior was in really good shape, but it needed a lot of mechanical work. And, um, I took, took this, long story short, converted it to an EV. It was a long process. And I was kind of horrified at all the Porsche purists who would just torch, torch me for doing such blasphemy.

• 1:11:32Barry Ritholtz?

  And a friend owns a detailing and wrap shop, and he hosts a big Cars and Coffee every year. And he's like, Like, hey, can you bring the EV? I don't really know if I want to do that. I'm gonna get, you know, really beaten up over it. He's like, trust me, it's a great crowd. All right. So, um, and, and this car ended up costing me, everything said and done, about what it would have cost me to walk into a Porsche dealership and say, give me that nine eleven, brand new. And not in, probably the same is true where you live. Where I live, nine elevens are Camrys. They're everywhere.

• 1:12:07Speaker 04

  Yeah.

• 1:12:07Barry Ritholtz?

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

• 1:12:51Barry Ritholtz?

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

• 1:13:15Speaker 04

  Yeah, and foster new relationships.

• 1:13:17Barry Ritholtz?

  And I, oh God, I, people were giving me cards. Hey, I wanna, I'm, I'm hosting this event. Can you bring this car? Like it was, and, and every time I bring that car anywhere, people lose their minds.

• 1:13:28Speaker 04

  That's great.

• 1:13:28Barry Ritholtz?

  It's so, it's so fascinating and it wasn't a function of spending a boatload of money. It was a function of, hey, this is kinda odd, kinda different. Uh, you have, every time I spend money, you're in the back of my head. Um.

• 1:13:45Barry Ritholtz?

  I want to go through a couple more quotes before we get to our favorite questions. You cite the University of Pennsylvania Professor Killingsworth. If you're already an unhappy person, it's unlikely that more money will ever fix your problems.

• 1:14:03Speaker 04

  Yeah, it's just going to leverage who you are in either direction.

• 1:14:06Barry Ritholtz?

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

• 1:14:25Speaker 04

  I think, I think everyone can make it worth it, but it's easy for it to spiral out of control and to let it change the, what other people think of you, your family, your friends, the rest of society. And so it's very easy to think that when we are spending a lot of money, we are gaining people's admiration. But you have to be careful because often what you are, the emotion you are fostering is envy. A lot of people envy you. And that's, and that, it's, it's hard in real time to know which is which. You're like, oh, they're looking at me, they're looking at me, they're talking about, they're talking about me, like they admire me. I don't know, they envy you, which means they hate you.

• 1:14:55Barry Ritholtz?

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

• 1:15:00Speaker 04

  Yeah.

• 1:15:01Barry Ritholtz?

  Explain.

• 1:15:01Speaker 04

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

• 1:15:13Barry Ritholtz?

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

• 1:15:22Speaker 04

  Yeah, I can see your house, I can see your car, your not, your, your EV 911 car. I can't see your bank account. I can't see your brokerage statement. I can't see how much you save for retirement. Like all wealth is actually hidden. Because wealth is the money that you didn't spend. It's the cars you didn't buy, the vacations you didn't take. It's money that you've saved for independence. And it's completely invisible. And it's pretty pernicious because if you think like for physical health, you, you can see physical health. This person's overweight, this person's ripped, there you can, you can see it. And so it's easy to find a role model. I want to look more like that person, less like this person. Where money, it's very difficult to do because you can't see wealth.

• 1:15:56Barry Ritholtz?

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

• 1:15:58Speaker 04

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

• 1:16:09Barry Ritholtz?

  If you're, I love this quote, and this is your words. If you're a good dad, a good husband, an honest person, a hard worker, a helpful friend, and a funny joke teller, you've probably earned 98% of the respect and admiration that I'm capable of giving you. If you happen to be rich and successful, I might bump that up to 99%.

• 1:16:31Speaker 04

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

• 1:16:59Barry Ritholtz?

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

• 1:17:11Speaker 04

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

• 1:17:38Barry Ritholtz?

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

• 1:17:47Speaker 04

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

• 1:17:53Barry Ritholtz?

  You're gonna have to explain that, because it does sound like smoke.

• 1:17:56Speaker 04

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

• 1:18:35Barry Ritholtz?

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

• 1:18:39Speaker 04

  Well, that's the only nice thing I'll say about you today.

• 1:18:42Barry Ritholtz?

  Because the thing that's so amazing is, these are throwaway lines that you say, hey, really liked that column, really liked that piece, I thought it was, that to you it's three seconds and of little bit of honesty, and someone says, this was really meaningful, that I kind of felt like I was lost, or I kind of felt like no one was appreciating me, and just hearing that somebody recognized that I had some skill and talent was huge. You forget what it was like when you were in your twenties and thirties, grinding away unnoticed for a decade or so, right? How long were you with The Motley Fool?

• 1:19:17Speaker 04

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

• 1:19:28Barry Ritholtz?

  Well, that's lovely of you to say. I really, really appreciate it. Both of us have an eye for talent. I could say that. And you have fulfilled all of our highest aspirations for you. Let's talk about books. What are you reading right now? What are some of your favorites?

• 1:19:49Barry Ritholtz?

  And I know when you finish writing a book, like the whole process, you're not reading anything other than research. So talk about your favorites.

• 1:19:58Speaker 04

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

• 1:20:41Barry Ritholtz?

  Thank goodness, something like that would never happen.

• 1:20:42Speaker 04

  Exactly, right.

• 1:20:45Barry Ritholtz?

  Talk about streaming, what are you listening or or watching these days? Be it, I don't want you, this isn't another solicitation for a compliment, but what are you watching, what are you listening?

• 1:20:54Speaker 04

  I finished Succession not too long ago.

• 1:20:56Barry Ritholtz?

  How'd you like it? It starts out so difficult.

• 1:20:58Speaker 04

  One of the best I've ever seen. No, no, no, and I didn't take that at all. One of the best I've ever seen.

• 1:21:02Barry Ritholtz?

  I hated the first episode. I don't like any of these people.

• 1:21:06Speaker 04

  Oh, but that's the point. I loved every second of Succession. And then I just finished Your Friends and Neighbors on Apple.

• 1:21:12Barry Ritholtz?

  Really good, I really enjoyed that.

• 1:21:13Speaker 04

  I can't wait for the second season.

• 1:21:14Barry Ritholtz?

  Jon Hamm just gets better and better.

• 1:21:16Speaker 04

  So good.

• 1:21:17Barry Ritholtz?

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

• 1:21:23Speaker 04

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

• 1:21:26Barry Ritholtz?

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

• 1:21:33Speaker 04

  And just such good writing, character development there.

• 1:21:36Barry Ritholtz?

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

• 1:21:45Speaker 04

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

• 1:22:00Barry Ritholtz?

  Right.

• 1:22:00Speaker 04

  And spend as much time as you possibly can, reading as much as you can from the diverse field of of topics that you can.

• 1:22:08Barry Ritholtz?

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

• 1:22:22Speaker 04

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

• 1:23:00Barry Ritholtz?

  Well, thank you, Morgan, for coming in. This is everything I was expecting it to be. We have been speaking to Morgan Housel, author of The Psychology of Money, same as ever, and the new book, The Art of Spending: Simple Choices for a Richer Life. If you enjoy this conversation, check out any of the 581 podcasts we've done over the past 11 years. You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever you find your podcasts. And check out my new book, How Not to Invest: The Ideas, Numbers, and Behavior That Destroy Wealth and How to Avoid Them, at your favorite bookstore. I would be remiss if I did not thank the crack team that helps put these conversations

• 1:23:45Barry Ritholtz?

  together each week. Alexis Noriega is my video producer. Anna Luke is my podcast producer. Sage Baumann is the head of podcasts here at Bloomberg. Sean Russo is my researcher. I'm Barry Ritholtz. You've been listening to Masters in Business on Bloomberg Radio.

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