The Financial Wisdom of Morgan Housel
November 8, 2022
I'm about to wrap up teaching my fourth personal finance class using Morgan Housel's The Psychology of Money as the course text and I couldn't be happier with the impact it has had on my teaching, the course, and most importantly: the students. While each of the other books I have used in the Finanncial Literacy Essentials course I teach at the University of Redlands have had their merits, I sense that Mr. Housel's book has had more impact. It's power is the simple, yet impactful, stories and anecdotes told. I keep 7 of the latter in notecard form by my desk. I refer to them often.
7 Powerful Anecdotes from "The Psychology of Money"
- Financial success is largely based on behavior
- Things that have never happened before happen all the time
- $81.5 billion of Warren Buffett's $84.5 billion net worth came after his 65th birthday
- Only 2.5% of Americans owned stocks on the eve of the Great Depression
- Historical odds of making money in U.S. markets: 50/50 over one-day periods, 68% in one-year-periods, 88% in 10-year periods, and (so far) 100% in 20-year periods
- How to stay wealthy: paranoia + frugality
- It's not how do I want to spend my money? It's how do I want to spend my time?
This is only handful of the savings and money management nuggets shared in the text, but these best illustrate the key points I hope to make with my students.
Screenshot of my son, Ben and I (middle), asking Morgan Housel (right) a question at a Next Gen Personal Finance event hosted by NGPF co-founder Tim Ranzetta (left).
Stay wise and well (and I can confirm that this book makes a great holiday gift).
