The guest
Morgan Housel: Partner at the Collaborative Fund and former columnist at The Motley Fool and The Wall Street Journal, serving on the board of Markel Corporation. He is the author of The Psychology of Money, which has sold over a million copies and been translated into more than 30 languages.
What this episode covers
Tim Ferriss interviews Morgan Housel about the central ideas in The Psychology of Money, beginning with why Warren Buffett's wealth comes from longevity rather than the highest returns. They explore how money's greatest purpose is buying independence and autonomy, the difference between being rational and reasonable, and how risk is a deeply personal calculation tied to time horizon. Housel shares his unusual personal story, from a hippie-commune-raised family and a father who became an ER doctor at 43, to his own path from valet and failed investment banker to a self-taught writer with no formal high school education. The conversation closes with his writing process, book recommendations, and reflections on crypto, drone warfare, and deepfakes as future inflection points.
Recommended on this episode
BookRecommendedISBN verified
More Money Than God
Sebastian Mallaby
“is very entertaining”
“the book more money than God by say Sebastian malaby am I getting that right something is very entertaining”— Tim Ferriss
BookRecommendedISBN verified
Fortune's Children
Arthur T. Vanderbilt II
“it's one of my favorite books”
“there's a great book that I read a couple years ago and I reread it last year it's one of my favorite books it's called Fortune's children and it's about how the Vanderbilt heirs spent their money”— Morgan Housel
BookRecommendedISBN verified
The Great Depression: A Diary
Benjamin Roth
“it was unintentionally the best economics book ever written”
“his son published it in 2010 it's called a Great Depression in the diary and I think it was unintentionally the best economics book ever written”— Morgan Housel
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Of Dollars and Data
Nick Maggiulli
“one of the smartest insightful and good writers that I've come across in years”
“a guy named Nick muli... he writes a Blog called of dollars and data and I think he's one of the smartest insightful and good writers that I've come across in years”— Morgan Housel
BookRecommendedISBN verified
The Science of Fear
Dan Gardner
“that book really changed how I think about fear”
“a book by a guy named Dan gner who wrote a book called the science of fear... that book really changed how I think about fear”— Morgan Housel
MediaRecommended
The Three Sides of Risk
Morgan Housel
“I really recommend people read the three sides of risk”
“I really recommend people read the the three sides of risk which is a piece you wrote which I read which is an extremely heart-wrenching and poignant piece”— Tim Ferriss
BookRecommendedISBN verified
Your Money and Your Brain
Jason Zweig
“it really changed my view of what matters in investing”
“Jason's book your money in your brain which came out probably 2005 2006 and it was one of the first behavioral Finance books out there... it really changed my view of what matters in investing”— Morgan Housel
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Tim Ferriss Show episode with Eric Schmidt
Tim Ferriss
“I highly recommend listening to my recent podcast with Eric Schmid”
“I highly recommend listening to my recent podcast with with Eric Schmid it is mindboggling what else”— Tim Ferriss
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Ready Player One
Ernest Cline
“I would also just recommend... People should take a look at that”
“I would also just recommend it's a fun film as well people could read the book certainly but Ready Player One People should take a look at that”— Tim Ferriss
MediaRecommended
Abnormal Returns
Tadas Viskanta
“the best financial news aggregator... that's a site that I visit every single day”
“abnormal returns is run by a guy named tus viscas... he runs what I think is the best financial news aggregator... that's a site that I visit every single day”— Morgan Housel
MediaRecommended
Blas.com
Blas Moros
“he does a better job at it of any other book summary service that I've seen”
“there's a site called blast.com... he makes a fairly detailed summary of every book that he's ever read... he does a better job at it of any other book summary service that I've seen”— Morgan Housel
The guest's own work
BookBy the guestISBN verified
The Psychology of Money
Morgan Housel
“one of them is a Google document that contains my Kindle highlights from your book and that is the psychology of money and I have 18 pages of Kindle highlights”— Tim Ferriss
MediaBy the guest
Financial advice for my new son
Morgan Housel
“I want go to a piece that you wrote some time ago and this is financial advice for my new son you wrote this October 13th 2015”— Tim Ferriss
MediaBy the guest
Internal vs. External Benchmarks
Morgan Housel
“I want to read something from a blog post that you wrote... this is on the collaborative fund website internal versus external benchmarks”— Tim Ferriss
MediaBy the guest
How This All Happened
Morgan Housel
“one article that I wrote fairly recently is called how this all happened which is a short history of how the US economy evolved from the end of World War II through today”— Morgan Housel
MediaBy the guest
The Optimal Amount of Hassle
Morgan Housel
“there is an optimal amount of to put up with in life and that was where this article the optimal amount of hassle came from”— Morgan Housel
Also referenced (named, not recommended)
BookReferencedISBN verified
The Man Who Solved the Market
Gregory Zuckerman
“there's a book about him I think the title is the man who solved the market which covers Renaissance Technologies and also tiptoes around a number of other similar firms”— Tim Ferriss
MediaReferenced
Do You Know the Difference Between Being Rich and Being Wealthy?
Jason Zweig
“I'm looking at a piece by Jason zag... this is a great piece discussing your book do you know the difference between being rich and being wealthy”— Tim Ferriss
MediaReferenced
The Knowledge Project
Shane Parrish
“I listened to Shane parish's interview with you on the knowledge project I believe it is yep so that's where I'm pulling this from”— Tim Ferriss
BookReferencedISBN verified
Atomic Habits
James Clear
“one is James Clear who wrote a book called Atomic habits and the other is Mark Manson who wrote the book The subtle art of not giving a”— Morgan Housel
BookReferencedISBN verified
The Subtle Art of Not Giving a F*ck
Mark Manson
“the other is Mark Manson who wrote the book The subtle art of not giving a both of them do something that I think is really rare”— Morgan Housel
BookReferencedISBN verified
The Intelligent Investor
Benjamin Graham
“Benjamin Graham the great investor who wrote the book The intelligent investor he's like the Godfather of investing”— Morgan Housel
BookReferencedISBN verified
The Snowball
Alice Schroeder
“when the book The Snowball came out which is a biography written about Buffett by an author named Alice Schroeder and it came out I want to say 2009”— Morgan Housel
BookReferencedISBN verified
Buffett: The Making of an American Capitalist
Roger Lowenstein
“read an earlier biography unauthorized... by Roger Lowenstein or Stein I never know how that's going to be pronounced the making of an American capitalist”— Tim Ferriss
BookReferencedISBN verified
Bringing Down the House
Ben Mezrich
“a book like Bringing Down the House by Ben metri or metrich I apologize Ben I've forgotten how to say your last name which was later made into 21”— Tim Ferriss
MediaReferenced
21
“Bringing Down the House by Ben metri... which was later made into 21 about this I believe it was a team out of MIT”— Tim Ferriss
BookReferencedISBN verified
The Big Change
Frederick Lewis Allen
“some of those books are the big change since yesterday... his crowning book is called the big change and it's just how American Life evolved from 1900 to 1950”— Tim Ferriss
BookReferencedISBN verified
Since Yesterday
Frederick Lewis Allen
“what is the third the big change since yesterday and Only Yesterday only yesterday”— Tim Ferriss
BookReferencedISBN verified
Only Yesterday
Frederick Lewis Allen
“and Only Yesterday only yesterday and I suppose there's maybe a bit of Hindsight bias but it's describing a period that he lived through”— Tim Ferriss
BookReferencedISBN verified
The Behavior Gap
Carl Richards
“Carl Richards who I mentioned earlier too used to write for the New York Times... his book is called the behavior Gap and so he wrote about behavioral Finance”— Morgan Housel
BookReferencedISBN verified
Draft No. 4
John McPhee
“like John MC and you read draft number four and like he has the structure anatomically decided to such a level of precision that it is almost unbelievable”— Tim Ferriss
BookReferencedISBN verified
The Lessons of History
Will and Ariel Durant
“I remember reading the lessons of History by Will and Ariel Durant and they talk about what is it famine war and pestilence”— Tim Ferriss
ProductReferenced
Oculus
Meta
“I got my son in Oculus for Christmas and there's a thing where you can do a tour of the White House with Barack and Michelle”— Tim Ferriss
Big reveals from this episode
- The greatest investor by annual returns is Jim Simons (~66% per year after fees) not Warren Buffett (~21%), yet Buffett is far wealthier purely because he has been investing for roughly 80 years.
- 99% of Buffett's wealth was accumulated after his 50th birthday and 97% after his 65th, illustrating that compounding's power lives in the extreme later years.
- Housel argues the near-universal want from money is independence and autonomy, yet most people systematically overlook it in favor of buying more stuff.
- Housel reveals he and his wife paid off their mortgage entirely, calling it the worst financial decision but best money decision they ever made because it bought peace of mind.
- The Vanderbilt heirs blew Cornelius Vanderbilt's ~$400 billion (inflation-adjusted) fortune within three or four generations, and nearly every heir lived miserably.
- Housel's core risk insight: the biggest risk is always the one nobody sees coming, so you must hold a level of savings and conservatism that looks like 'too much' to be truly prepared.
- Housel has no formal high school education; he skied six days a week as a competitive racer and got a real diploma at 16 through an independent-study program designed for juvenile delinquents.
- The fee-versus-fine reframe: market volatility is a fee (price of admission for good long-term returns), not a fine (punishment for a mistake).
Worth remembering
- Citigroup nearly went bankrupt over a CDO 'putback' product so obscure that board member and former Treasury Secretary Robert Rubin said he had never even heard its name.
- Housel calls independence and autonomy 'as close as it gets to a universal financial law.'
- Markel is described as a 'mini Berkshire Hathaway,' a roughly $17 billion insurance company with 20,000 employees that uses insurance profits to buy whole industrial businesses.
- If you tried to use Benjamin Graham's actual formulas from The Intelligent Investor today, Housel says, you would fail miserably; remove Geico from Graham's record and his career returns are merely average.
- From 1980 to 2010, about 40% of stocks in the Russell 3000 went bankrupt, yet the index did well because roughly 7% of components (like Amazon, Microsoft, Netflix) were huge winners.
- The Biltmore is about 140,000 square feet, was once the biggest house in the world, yet George Washington Vanderbilt hardly ever visited it.
- Anderson Cooper, a Vanderbilt descendant who built his own career without family money, appears to be the first happy Vanderbilt heir in the book Fortune's Children.
- A Wall Street Journal piece noted Saudi Arabia defending against rebel drones pits million-dollar missiles against $10,000 'flying lawnmowers,' illustrating the asymmetry of drone warfare.
- Buffett reportedly once stepped over his own child who had fallen at the bottom of the stairs to go upstairs and read annual reports, an anecdote Housel and Ferriss cite as proof some traits cannot be emulated.
- Housel praises blas.com, run by Blas Moros, who reads about two books a week and posts detailed multi-page free summaries of hundreds of books.
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