The Psychology of Money: Timeless lessons on wealth, greed, and happiness
This is not a failure of analysis. It’s a failure of imagination. Realizing the future might not look anything like the past is a special kind of skill that is not generally looked highly upon by the financial forecasting community.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
But say you want to earn an 11% annual return over the next 30 years so you can retire in peace. Does this reward come free? Of course not. The world is never that nice. There’s a price tag, a bill that must be paid. In this case it’s a never-ending taunt from the market, which gives big returns and takes them away just as fast.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
But few pay enough attention to the simplest fact: Buffett’s fortune isn’t due to just being a good investor, but being a good investor since he was literally a child. As I write this Warren Buffett’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday. $81.5 billion came after he qualified for Social Security... See more
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
the endurance necessary to put the quantifiable odds of success in your favor, you realize it should be the most important part of any financial strategy.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
Compounding works best when you can give a plan years or decades to grow. This is true for not only savings but careers and relationships. Endurance is key.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
Two dangerous things happen when you rely too heavily on investment history as a guide to what’s going to happen next.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
Nassim Taleb explained: “True success is exiting some rat race to modulate one’s activities for peace of mind.” I like that.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
It was not until the 1980s that the idea that everyone deserves, and should have, a dignified retirement took hold.
Morgan Housel • The Psychology of Money: Timeless lessons on wealth, greed, and happiness
Reputation is invaluable. Freedom and independence are invaluable. Family and friends are invaluable. Being loved by those who you want to love you is invaluable. Happiness is invaluable. And your best shot at keeping these things is knowing when it’s time to stop taking risks that might harm them. Knowing when you have enough.