On Monday I had a prep call for a webinar I am moderating next month for the CFA Institute. I have the distinct honor of asking Morgan Housel questions about his new book, The Psychology of Money. This will be the top finance book of 2020. Be sure to preorder your copy here.
I was blessed with an advance copy of the book in order to prepare for the webinar. I had a hard time putting it down. It is an easy and enjoyable read. I couldn’t help but wonder – how has this book never been written before? Morgan perfectly illustrates many of the behavioral mistakes that humans make with money and provides the explanation for why we do these things. Without spoiling it for you, here are a few of my favorite tidbits:
Dogs were domesticated 10,000 years ago and still retain some behaviors of their wild ancestors. Yet here we are, with between 20 and 50 years experience in the modern financial system, hoping to be perfectly acclimated.
There are a million ways to get wealthy, and plenty of books on how to do so. But there’s only one way to stay wealthy; some combination of frugality and paranoia.
Wealth is the nice cars not purchased. The diamonds not bought. The watches not worn, the clothes forgone and the first-class upgrade declined. Wealth is financial assets that haven’t yet been converted into stuff you see.
Morgan is a financial writer with the skills of a novelist. He leaves a chapter hanging perfectly in suspense of what comes next, so that you cannot help but turn the page. As Howard Marks comments on the book’s cover, “Housel’s observations often hit the daily double: they say things that haven’t been said before, and they make sense.”
If you want to attend the webinar, it is free for CFA members and non-members alike. It’s Wednesday, September 9th at 2pm ET, and you can register here. The call limits participants to 1,000, so if you cannot view it live, you will have access to the replay.