Why You’ll Never Get Rich From a Paycheck (Ft. $1B Fund Manager)

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Morgan Housel is a partner at the Collaborative Fund and the author of the best selling book the Psychology of Money, which has sold over 4 million copies worldwide. This is one of the best selling financial books of all time. I started writing by accident. It was never part of the play. Hi, I'm Morgan Housel. Welcome to the burnouts.

How do you set your budget? Are you sitting down like every year and being like, okay, you know, you have two kids. This is how much we're gonna spend on the kids this year. Are you doing it every month? How should someone who's particularly. Because we're all in New York. Rent is expensive, food is expensive. Everything in this city is expensive. How often are you thinking about budgeting and how often do you check it?

We've always been such high savers. There's always been such a gap between what we make and what we spend. My wife and I really don't have that much of an ongoing budget, but since we save so much, it's like there's so much, there's so much white space between what we make and what we spend that it's never been. I think we buy everything that we want, but the truth is like, we just don't want that much relative to what we make. It's like. So it's never been that much of an issue when I was younger or if you're in a tighter position, like, yes, you should, you should really figure, figure it out every month. This is rent, this is restaurants, this is groceries, whatever it might be, laying it out and, and if you're not, like the speed in which that can catch up to you in, in a Bad way is, can really take people off guard. And so I think if you're not doing that for two or three years, you're eventually going to have a moment one day where you're finally going to open up the credit card statement and be like, holy, like, where, where did this come from? So it'll, it'll eventually catch up with you. So I think the tighter your budget is, the more you need to be micromanaging it down to the penny.

Say, for example, you are someone who has never traditionally thought about their relationship with money. They've been bad, they're overspending, they listen to this podcast, hopefully, and they realize they need to change. What are the first steps that you would advise?

I think, I think again, just being so cognizant of what is coming in and going out, that seems so basic. But how much are you earning and how much are you spending is the most basic but the most overlooked part of what, of what people are doing. And if you were to just check your, just open up your bank account on your phone once a day for five seconds every morning, do it. If you do that every day for a couple months, you will be in a 10 times better position of what you're doing because you're eventually going to see, oh, my paycheck was this much and I spent almost the same amount on these things that I don't even get any pleasure out of. I spend. I didn't know I was spending this much on all these subscriptions that I don't even use. Like, if you're just more cognizant of it every day, that's that, that's the.

First step to doing auditing and subtracting.

Just going in and checking. Just checking your bank account. Oh, like this came out of my checking account yesterday. I didn't even know that I had that subscription. I didn't even know, like, I'm not anti spending in the slightest. And everyone has their thing. Some people like going out, some people like traveling. This is not to say like teaching money is never going to work. If you're giving someone a lecture and you're just going to say, you're just coming down hard on them and say, you can't have fun anymore, that's not going to work. And so everyone has, has their thing that they should be spending money on because it genuinely makes them happy. But I think most people who are not cognizant of what's coming in and going out are probably spending a ton of money on things that give them no pleasure whatsoever. And they're out of sight, out of mind. They're not checking their credit card statement, so they don't even know they're spending on money on things that they don't. Doesn't make them happy. And they don't care because they don't. They're not even aware of what they're doing. So just becoming more aware. So like I, I've, I've always been kind of maniacal about it and I could tell you, down to the dollar, how much is in this account, in that account, I don't think you have to be that hyper aware about it, but just having a broad understanding. Just like again with diet, you don't have to count every single calorie, but you should know whether you're eating 2,000 or 7,000 calories per day. Like if you should have some basic idea of what's coming in and what's going.

So your kids are 6 and 9 years old. What do you teach them about money? And what will be the first thing you teach them when they get to high school or college?

Every parent who has more than one kid will say this. My kids, obviously raised under the same roof by the same parents could not be more different. Raised by the same parents with the same values. And so it's hard to be like, what do I teach my son and my daughter? Because the answer would be like, probably completely different things. I know even at this age they're going to end up completely different. So it's hard to give universal advice on like, what, what to teach them. One thing that I always say is you don't need to sit, sit them down and teach them because whether you know it or not, they're paying attention every single time you say, we can't afford this, or oh, we're definitely going to buy this, or the neighbor's house is bigger. What. Every single remark that you make about money, they're, they're making a mental model of it. And one example I've used before is like, there's so much evidence that your political beliefs are inherited heavily from your father in particular. And most people's fathers did not sit them down and say, this is why we vote this way, because. But you pick it up through osmosis. Over the years. Every single remark that your parents make or what they're watching on tv, you're making a little mental model of it. And kids are so observant and they, they're forming all these. So you, you don't need to teach your kids about money. They're paying attention whether you know it or not. And so the best you can do is just leading by example and recognize that what works for you and your spouse might not be what they want. And I think a lot of people will rebel against their parents financially. My parents did this and spent this and I don't want to do it whatsoever. Probably cause their parents, shoving it down their throat said, this is the right way to save, you should do this, you should spend this much, save this month this much. Maybe that was right for me. I was a terrified 19 year old. Maybe hopefully my son is not going to be. So maybe he doesn't need to save and invest like I did when I was 19, because hopefully he's going to be in a better mental spot than I was at that age. Just recognizing how different people are makes giving advice on what to teach them so difficult.

What about the concept though of no risk, no reward? It was really interesting. We just did a podcast with someone who was saying that they only had basically one month left to understand, like whether or not they could afford their apartment. They put everything on the line and they were able to take a bet on themselves and it paid off and it was the reason why they were able to have their career with this mentality of like, no risk, no reward. How do you decide what risks are worth it and what risks are too much?

There's a great quote from Daniel Kahneman, who is a psychologist who won the Nobel Prize in economics. He died last year and he was like, the best definition of risk is understanding your sense of future regret. It's understanding like imagining yourself 30 years from now or 50 years from now and saying, what would I regret? Jeff Bezos tells us great story that when he started Amazon, I think it was in 94, he used the same framework. He was like, I imagined myself on my deathbed and I knew that if I started Amazon and it failed, I would not regret that. But if I didn't start it, I would absolutely regret not trying. He was like, it was the easiest decision in the world. Like, I know I'm going to regret not trying. I have to do this. And I think everyone, the thing is most people do not have a good sense of their future regret that most people don't really understand what they're going to look back at regret on. There's a great book called Lessons for Living and it's written by this gerontologist named Carl Pillmer and he interviewed, I think a thousand elderly Americans. Most of them were 80 to 100 years old. And in the book, he just said, tell me about your life. Like, give me some life advice. You've experienced more life than anyone. Tell me what you know. And there's a section of the book about money. And he said that of the thousand people that he interviewed about money, not a single one of them looking back at their life when they're 90 years old, said, I wish I worked harder. Not a single one of them said, I wish I made more money. Not a single one of them said, I wish I spent more money and bought a bigger house. Virtually every single one of them said, I wish I spent more time with my family. I wish I was nicer to my friends. I wish I, like, forgave people more often. So it's interesting, the people who actually do have a good sense of their regret looking back at life, none of them wish they worked harder. None of them wish they made more money money. All of them wish they spent more time with their family. All of them wish they were nicer to people. So it's like, I remember reading that and being like, look, if risk is understanding what I'm going to regret, none of them regret not making more money. All of them regret not spending time with their family. Like, it's so obvious where I should be putting my time now.

Also, one thing we never teach people, particularly women. You talk a lot about this. We now have almost equal men and women in terms of how much we're invested within the stock market. Women didn't gain access to credit cards TILL what, like 1980 was the first time that women.

Wow.

Yeah, it's nuts. But 2% of VC capital is invested in women's businesses. I think one thing we really don't teach people is salary is taken away by taxes. If you're In New York, 45 to 50% of your salary, if you're making over a certain amount, is going to be gone. Salary is not the real way to build wealth. It's investing over time and compounding interest there. But there's also this concept of equity that can grow over time. And if you're starting a business and you have equity in that and that grows, you're actually not going to get taxed on the same rate if you have capital gains there. That's a huge, huge, important thing that we don't teach enough women is go out there, pitch your company. Guess what? If you raise money and your company completely fails, guess what? You're going to get a way higher starting salary at a big tech company like Google or you actually started something because people love failed founders. They love to hire failed founders. It's their favorite thing. Also, if you're a founder and you're actually capable of raising money, you can pay yourself a good salary too. And even if that equity doesn't grow, you'll be able to have another landing place to go because you'll now be connected within that environment. There is a way to do finance and there's a way to do career with even less risk. And if you make money from it, actually you're just not going to be taxed at the same rate.

Right, Right. I think I agree with everything you said. I do think though, it, it changes throughout your life cycle. If you, if your career implodes at 24 when you're not married and don't have kids, like, that's, that's, that's probably not that big a deal. If you're 48 with, and you're putting two kids through college and your career implodes, that, that is a absolute catastrophe. And so it differs throughout your life cycle, which is also why a lot of like, long term planning in finance is difficult. Because what you want at 22 and what is an appropriate risk at 22 is not the same at 48 or 58 or 68. It's going to change all throughout your life. So it's difficult to make like sometimes long term plans in your 20s because you're going to be a completely different person when you're older. There's a thing in psychology called the end of history illusion, which means everyone understands how much they've changed in the past. You're a different person than you were 15 years ago. And everybody is, you have different values, different views, but most people think that they'll be the same person 15 years from now. Like, you're very aware of how much you changed in the past, but most people think your views and values going forward will be stable and they won't. You'll be a very different person 15 years from now, as will I. Everybody will. And because of that, like, it's hard to know like what one, one takeaway from what I said, from what you just said, I think it's very true. I agree with every word of it. For people in their, in their 20s, absolutely. If you're, if you're putting, if you're 50 and putting your kids through college, that can be a disastrous mindset. So it's like I've learned this about myself. I, I want different things now than I did 10 or 15 years ago and again when, when I, when my, when I had kids, every. All of my views and goals changed instantly. And that'll probably change 20 years from now. I'll. I'll have different goals 20 years from now. And I think I almost hope that I'll look back in 20 years at things that I wrote in the book and be like, that was true when I wrote the book, but it's not true for me anymore. Like, I've learned things now.

You look back and you're like, that isn't true for many.

No, I mean, I, I wrote, I wrote most of it, you know, five years ago. It was, wasn't that long ago that I wrote it. So I don't know if I have many yet. I, I finished writing it. Like, the week that Covid hit was when I, like, turned it in. I'm like, I'm done with this. Which economically at the time, like a lot of the book is about, like, unknown, unforeseen risks, kind of perfect time. And so, like, if I had written it a year later, I probably would have written more about unforeseen risks that you don't see coming. So, so much of what is written in the book is about unforese. And like, we can sit here all day and plan in our personal lives and in the economy, like, here's the biggest risk in my business, in my personal life, for your business. We can list them all out, guaranteed that if you look back five years from now, the biggest actual risk is something that you weren't thinking about. It's always like that. And so the biggest news stories for like the world over the last 25 years were 9, 11, the financial crisis, Covid. And the common denominator of all those is that, like, nobody saw them coming until they actually happened. And so, and that's true for people's personal lives as well. So I think that's one. I don't know if I'd change much in the book, but it was such a stark reminder that, like, we can pretend to plan what's going to happen in the future. You plan, God laughs is the quote. It's always like that. And I think all of history is like, all of history is like the study of surprises. It's a study of big events that virtually nobody saw coming and how they impacted society. And of course it's going to be like that going forward.

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Obviously, as you advance through your career, if you make the right moves, if you save the amount of money you need to, then you're going to be in a situation where you're rich, you have money. When do you know when enough is enough?

There's no amount of wealth that is, there's no such thing as an objective measure of wealth. Everything is just relative to somebody else. And it's always the case. And if you live in America and you have a thousand dollars in your checking account, the majority of the world will look at you as rich. Even if you don't feel that way. If you live in New York, you don't. If you live in New York, you might feel positively broke, but the majority of the world will look at you as very rich. There's a thing you're probably a little bit too young for this, but it was around 2011 where there was a big pushback against the 1%. It was the Occupy Wall street movement and it was a big nationwide pushback about like there's a war against the 1% of the richest, the 1% richest. And I saw the study I thought was so fascinating that to be in the top 1% richest in the world, you need to earn $34,000 per year. That puts you in the top richest 1% of the world. If you make $34,000 a year, you're in the richest 1% of the world, but nobody in America who earns 34 grand a year feel they feel completely broke. And they're probably on food stamps. And so just the notion that all wealth is relative, I think is, is, is, is really important because when it comes to enough, if you are always judging yourself against other people, it's never going to feel like it's enough. If you're always judging yourself relative, there's always going to be somebody who is earning more money than you, getting richer faster than you. I think about this a lot for pro athletes because the minimum wage, if you're like a pro baseball player, is I think about 800 grand a year. Which, by which, by any metric is a lot of money. Like if you're 22 making 800 grand a year, you, you are, you are rich by, by any relative metric. But nobody, no pro baseball player who's earning 800 grand feels rich because there's people on their team who are making 30 million a year. So relative to everyone around you, you feel worse off. And so the first idea with enough is just realizing like that relativity game, if you're always comparing yourself to others, it's never going to feel like it's enough. That's always been true. But social media just like dumps gasoline on the fire. Because it used to be that you would compare yourself to your neighbors and your co workers, like, how big is my house relative to my neighbors? But now with social media, it's just like a curated fake highlight reel of everyone's like supposed happiness, supposed wealth. And so I think it's, I think it's generally true. It's never been easier to get rich than it is today. I think that's true. It's also never been easier to feel poor by comparison than it's ever been because of social media. I'll give you a perfect example. If you wanted to be a media person in the 1990s, you needed to move A, move to Hollywood, B, like find a producer, like, work your way in, do 10, 000 different commercials before you finally got a role in the movie. Like, it was such a long slog to get to become a star on TV. Versus Mr. Beast made a couple of videos. I think his first video was him counting to a hundred thousand with Mr. Beast's first video.

Are you serious?

That was just. And he did it. He started at one and counted to a hundred thousand. And so just, of course he's an outlier, but there is more meritocracy than there used to Be, there's more of just if you are talented, you're going to get noticed, you're going to get followers, you're gonna. Than there's ever been before. So people can push back on that. But I, I think it's generally true that it's easier to get richer now than it's ever been.

I think the outlier wealth is easier to ach. Achieve. But if you're just on the treadmill and you're going through the promotions and you're in a typical job, it's never been harder to become wealthy from like a traditional sense.

I think, I think statistics, I think that's, that's true. I don't, I don't disagree with that. There's definitely a thing though that the definition of wealth has changed dramatically over time. That if this was the 1950s, if you lived, if you had four kids in a two bedroom house that was 700 square feet and you don't have a garage, you don't have a porch, you own one car, you go camping for your vacation, you were like, we're crushing it, we're doing phenomenal. But if you are doing that in 2025, most people feel like what this is not, I've got four kids in a 700 square foot house. This is not cutting it whatsoever. The kind of lifestyle that would have made you feel rich 30 or 40 or 50 years ago would be considered poverty today. I think, I think there's a lot of truth to that one. 1 the positive spin on that is like that's the definition of progress, is that now we live in a world where people expect to have great health care, great education, adequate housing and whatnot, where maybe our grandparents just didn't. By and large, that's the definition of progress. But it makes it so that even if there is progress in the world, that becomes your baseline, that becomes your floor for being happy. And if you're not exceeding it, then you're going to feel worse off. So maybe to reframe it. It's easier than ever to have like what used to be considered what used to be considered rich than it's ever been before. But it's also been easier than ever to have an inflated sense of what rich would be.

I think one thing that's also interesting is thinking about gender equality within wealth. In my lifetime, we likely won't see women have the same amount of wealth as men. Do you think about access to birth control? Like we've never seen a society industrialized without women having access to birth control. Like, it just doesn't make sense. And investing in that or the government even giving people access to something like that. We know the economic returns of that. You've done a ton of research for your book, and you talk a lot about how in different cultures, money is seen differently. Are there any things that stick out to you between genders and how we approach money?

I don't. It's so different person to person. I think the differences between men are. Differences are. Is larger than the difference between men and women. Like, they're. There's such a vast range of, like, what. What men will want, what not. I can just speak for myself. I've always just had this innate desire to be a provider. So long before I was a dad, I'm like, I gotta save money for the family that I'm gonna have in the future kind of thing. I think that's not rare. Of course, I. I think lots of people have that. Lots of. Lots of women have that too.

I think that a lot of men have that over women because I think there is an expectation we put on masculinity in society that, like, you need to be the provider. And I think that's why there's so much pushback when a woman in a relationship makes more. Yeah, because there is that expectation and almost like this insecurity now of, oh, well, what if I don't provide?

Yeah, no, it's. It's. It's. It's. It's huge. I think it's changed over time, too. Obviously, in the 1950s, it was this very established, like, the man goes out and works and earns a paycheck, and the woman's gonna stay home and cook and clean and take care of the kids. It was a very established way to do it. And like every. Like every social trend, the pendulum swings way too far. I think back in the 50s, it got to the. Where it was not women, you know, can stay home and take care of the kids. It was. That's all you are capable of doing. That's the pendulum swinging, like, way too far in. In the other direction. A lot of it started in World War II, when so many young men were shipped overseas and who was. Who was at home in the factories building the tanks and the guns and working on the farms. And it was a woman who stayed home. And that was the first time when it was like, oh, they absolutely are as capable, if not better at a lot of these tasks than men were. And it's. I think it's even shifted even more in the last 20 years when we've gone from an economy that was more geared towards physical labor and strength, towards knowledge, work. And there are so many of these instances where women are not only equally capable, but better at it. There's a lot of that in investing where I think men are much more likely to want to swing for the fences, which can end up. Well, it can end up disastrous, likely to end up disastrous. Whereas women are much more likely to be like, let's try to be average for an above average period of time, which is where wealth is actually gained. And so I think there's a lot in the behavioral side where women will actually end up doing better than men for. For a lot of these aspects.

I think all of this perspective is really interesting for me because my parents came to the United States from Iran basically with nothing. So they were the definition of what I would consider the American dream of moving here, getting a good education, getting a middle class job, saving, investing, and trying to provide a good life for their kids. I had a conversation with one of my friends recently where I was talking about this and saying how I wanted to leverage all that my parents had done to live my own version of the American dream to achieve an even higher level of success than they had. And it was really interesting because my friend told me that he felt that the American dream was dead and that it is no longer possible to do the thing that my parents were able to do of getting a good education, getting a good job, going up the treadmill, and being able to have a really good life. And I'm curious for your perspective of what do you think about the state of the American dream?

I was talking to someone the other day. Everyone teases Apple that whenever they come out with a new iPhone, they're like, it's the same phone as last year. You changed nothing. And a lot of people will say that's because Apple doesn't innovate anymore. I think. I think a better explanation for it is like the iPhone 8 or whatever was so damn good, so perfect that it was very difficult to improve upon it. It was almost perfect. I think that can be some analogy for what's happened in America, is that the standard of living in the 20th century improved so much in the United States. And it became so that virtually anyone who was willing to work hard could get an education, get a decent job, save some money, buy a house, have good health care, retire. Not everybody, but it became so much more accessible that it became hard to improve upon it. And a lot of things what we consider decline These days, just like we would tease Apple for not innovating is actually just like, no, it got so good that it's hard to improve. Whereas a lot of the improvement for our parents, our grandparents, our great grandparents generation was because a generation before them was in abject poverty and there was much more low hanging fruit. It was, it was easier to grow out of abject poverty than it is to grow from pretty good and trying to get better. We've gotten to a point where things are pretty good for a lot of people and it gets much harder to grow from here. I still think our kids generation, our grandkids will be living in a better world than us. They'll be healthier, wealthier. I don't know if they'll be that much happier for it because their expectations will gr. Will rise so much more and so push on that.

What about the two things that I would say really encompass the American dream of, of being able to afford buying a house and being able to afford paying for college? I would say arguably those are two things that are harder today than it used to be. And I would say those are facets of the American dream. So what would you say?

I don't have any pushback to that. I think it's definitely true. If there was, if there was a devil's advocate, and it's just a devil's advocate because I agree with you, the houses that people want to buy today and would consider an average acceptable house today was, would be considered are much different than the houses that would be purchased. So in the 1950s, as I mentioned, the average house was about 750 square feet for your four kids. They all shared a bedroom. You had one bathroom for the six of you in the household. And that was great. That was, that was an amazing place to live. That was the American dream. Today that would not be acceptable whatsoever. That's devil's advocate because I still agree with you that by any metric it's more expensive, if not prohibitively expensive to buy a house today than it was even 10 or 15 or 20 years ago. It's completely different. Education is the same. Does a college education cost astronomically more by any way you spin it today than it was 30, 40, 50 years ago? Yes. I mean I think in California that like if you went to like UC Berkeley, UCLA, I think it was before the 1970s, there was no tuition for anybody. The whole school was completely state run. There was no such thing as tuition. So it's a completely different world relative to what it is now. It is also True devil's advocate that more people have the expectation of going to college now than they did 50 or 60 years ago. That's a good thing. That's a good. That, that's a great thing. But as, but that's another example of expectations rising over time. I want to live in a world where people's expectations rise over time, but it makes it so that even if there is progress, it's not going to feel as good as it should. It. You're just meeting those expectations. So I want to live in a world where people's expectations, they're like their floor of what counts as a, as a decent life continues to rise. And I hope that for my grandkids, their floor of basic life is a pill that cures cancer or whatever. It might be something that would seem like unbelievable to you and I. I hope that becomes their basic standard of living, but it also means that they're not going to appreciate it as much as you and I would because it just becomes something that's standard. Just like when you and I get penicillin, we're not like, ah, we're so lucky to live in this world. It's just, it's just what we have that's becomes basic. I think that's definitely true. No matter how good life becomes, it's never going to feel as good as you think it will. It'll just be. You'll get used to it in three seconds and it becomes part of your basic standard of living.

Yeah. It's interesting because when I was talking to my friend, what I. One of the things I said to him was that ultimately also the American dream has changed.

Yes.

People no longer want to buy because sometimes renting is the better, more cost effective option. And so I'm curious for your perspective on how do you think the American dream has evolved or what do you think is different now in terms of what people want?

One thing that's so true is that the other thing that's really, you know, it's been a trend for 30 or 40 years, but it's really picked up is the decline in. For infertility. Like the, the people, like the, the number of kids that people have now relative, you know, relative to people is so much lower than it used to be. A lot of that there's, there's so many different avenues that play into that. But one of them is most people don't want to have kids until they own a house. Most people, that's like, like the box to check before having kids is we bought A house. Not true for everyone, but a lot of people feel that way. The harder you make it to buy a house, the the fewer kids a society is going to have. You see that play out all over the world and so you think of something like housing policy. Like it's more than just economic policy. It's more than just a financial thing. It has a whole all these ripple down effects. Sex.

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Okay, one question I have, and this is something I'm curious about because I don't really have an opinion here, but in terms of being like an accredited investor. So there's this thing and I'll maybe I'll let you explain it, but when you are an accredited investor and you have over a certain amount of assets, you're allowed to invest in private companies or in private stock markets. Do you think that there should be a course that people can take where they can graduate it and then instantly become an accredited investor? Or do you think that it should still be tied to what it is today, which is the amount of assets you have have, and maybe if you could explain just for everyone what an accredited investor is and what that gives access to?

Yeah. So if you want to invest in like a hedge fund or a private equity fund or a venture capital fund, by and large, you need to be what's called accredited, which I think the rule is you need to have a net worth of at least a million dollars or income of at least $200,000 per year. What's interesting is that like those numbers haven't changed in 40 years. So when they set that standard of a million dollars, it was when a million dollar income was enormous. And you are really being like, okay, if you have a million dollars, you obviously should know what you're, what you're doing. But those numbers haven't changed any in, in a long time. I think the idea that your net worth is a proxy of your intelligence is not, is, is, is, is, is, is, is not very smart. So the idea that you should have a financial literacy course makes a heck of a lot more sense because there's a lot of young people who don't have a million dollars, but they're very smart, they're very ambitious. Those should be the people who are investing in venture capital funds.

As your kids grow up, will you give them an allowance? Will you, you know, start. When will you start to have those discussions? And how do you think about that.

That it's so different? So if you asked me a year ago whether I would do what I'm about to tell you, I would have said no way. But my son, who's nine, he's always been very shy, like painfully, painfully shy, doesn't want to trick or treat. It's never really worried my wife about my, my wife and I. But sometimes we look at him like, I really want you to have some independence and go out and he just started, so he's nine in the last like month where he'll walk to the grocery store by himself to buy, like, buy a soda or something and walk home. And he loves the independence of it. And we're like, oh yes, please go out and do it by yourself. Please go walk there by yourself himself. And he loves it. So we just got him like one of the cards that we could load money on to have his own, have his own money. So when he goes, he has to like swipe it himself. And, and, and he, he loves that, he loves doing. You know, it would be one thing if I just gave him a five dollar bill and said, go buy a soda. It's another be like, this is your card. That independence of like, this is yours. My parents did something similar. I think they gave me a copy of their credit card when I was like 16. But I remember being like, I got my parents credit card. I can't screw this up, up. If I, if I abuse this, like that's the end of it. And I loved that, like, oh, this is a big deal. And I Like the responsibility involved here is really big. My parents could have just given me a 20 bill and said this is for gas. But the fact that they're like we trust you. This is, don't screw this up was hugely important. Like looking back, that was, that was really important.

What other lessons do you think aren't taught in schools that should be that you think everyone should know about money?

I think most financial education in schools, it's very well, well meaning, well intentioned but it tends to be technical. Here's how to balance a checkbook. Here's the formula for compound interest. And most kid, most high schoolers don't view that any differently than if they're being taught trigonometry. They're like let me memorize the formula for the test and I'll forget it tomorrow. And just like in one ear, out the other. I think there are so many good stories about finance of people who did it right, people who did it wrong. Be like greed and fear that are so fascinating that I always want to be like don't teach kids the formula for compound interest. They don't care. They're going to forget it. Tell them a story about someone who did a really good job. Tell them a story about someone who really screwed up. They'll remember those stories and they'll contextualize them way better in their own life than if you're just teaching it as like charts and data and formulas. Like there are more stories in finance about like a window into people's personalities and a window into your own personality. I started the, the book the Psychology of Money about a janitor who had never earned more than minimum wage age, who lived in a one room shack by himself, who saved everything that he ever earned, invested it, left it alone for 70 years, died with $7 million and left it all to charity.

Left it to the local library.

Left to the local library. There are, and there's a lot of I, I could have, I used his stories. Name's Ronald Reed. There are a hundred thousand Ronald Reeds out there. Nobody country bumpkins, no education. You would never think anything of them. They're so good with money. And there are also so many Harvard educated MBA worked at Goldman Sachs who end up going bankrupt with their Ferrari. And it's all, it's not an education thing, it's all just like the psychology. Ronald Reed, the janitor had perfect financial psychology. The Harvard educated Goldman Sachs guy like couldn't, couldn't manage his sense of greed and fear and like you don't need education.

Manage Your sense of.

I think a lot of it is inborn. Like, people don't want to hear that answer, but I think a lot of. Like, some people are wired different, differently. It gets back to the Charlie Munger quote that we started with. Like, when teaching financial education to young people. Most people either get it instantly or never.

But can you rewire yourself?

I don't. I think his point. His point is too black and white. It's not as black and white as he made it. But I think there's truth to that, that on the nature, nurture spectrum, it's more nature than we want it to be. I think that's broadly true. People can change. They can be taught. We should be teaching, but we shouldn't also pretend that there's not a lot of inborn. And even if it's not inborn, we're all prisoners to our past. And so a lot of that. If you had a very hard childhood, a wonderful childhood, different. Different things happened to you early in your life that happened to me or happened to you, that maybe something happened to you that I can't understand, and vice versa, that plays a huge role in how we think about using money as a tool to want to live a better life.

Morgan, we've learned so much from spending time with you. I can't believe we got to have you on the podcast. And we're so honored. Thank you again for joining us on the burnout.

This has been fun. Thanks for having me. I appreciate it.

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