Podcast Summary
Applying investing principles to life: Investing wisdom extends beyond finance, enhancing decision-making skills in various aspects of life by understanding human behavior, clear thinking, and long-term perspective.
The principles of investing, such as understanding human behavior, clear thinking, and long-term perspective, can be applied to various aspects of life beyond finance. Morgan Housel, a financial writer, emphasizes this interconnectedness and the importance of learning from investing to improve decision-making skills in other areas. The discussion also touches on the dangers of letting emotions cloud judgment and the value of adopting a long-term perspective. Furthermore, the episode explores ideas related to success, quirky billionaires, innovators, risk, wealth, fame, and happiness.
Predicting the future vs focusing on consistent human behaviors: Success often depends on luck and consistent human behaviors, rather than predicting future trends. Focus on understanding and meeting human needs to increase chances of success.
While we may try to predict the future and identify the next big trend, much of our success in investing or other areas comes down to luck and consistent human behaviors. The example of Amazon and AWS illustrates this point, as the company's massive growth in the late 2000s was largely unpredictable at the time. Personal experiences, such as missing an investment opportunity due to unexpected obligations, can also lead to significant gains. However, it's important to focus on the consistent behaviors and needs of humans, rather than chasing after the next big trend or change. As the speaker mentioned, this idea was particularly appealing to them after recognizing the industry's inability to accurately predict future events. The consistency of human behavior throughout history, as demonstrated in Benjamin Roth's diary from the Great Depression, further solidified this perspective.
Focusing on what remains constant in life or business: Understanding and catering to enduring needs and desires leads to long-term success. Providing high-quality content or products is essential.
Focusing on what remains constant in life or business, rather than trying to predict the next trend, is a key to success. This idea was expressed in a comment about the consistency of human behavior during economic downturns, and was later echoed by Jeff Bezos' statement about the importance of providing customers with desirable features that will never change, such as selection, fast shipping, and low prices. This principle can be applied to various areas of life, including investing, business, politics, and relationships. By understanding and catering to the enduring needs and desires of people, individuals and businesses can build a strong foundation for success that will last. Additionally, it's important to recognize that there may not always be a shortcut or hack to achieving success, and that putting in the work and providing high-quality content or products is essential for long-term growth.
The key to success is consistent effort in creating high-quality content: Successful individuals build careers on evergreen content, focusing on timeless topics and avoiding fleeting trends.
There are no shortcuts to creating good content or achieving success in areas like diet, exercise, or investing. While techniques and strategies can help, the real key is putting in the effort to produce high-quality content consistently. As the speaker emphasized, successful individuals like Mark Manson, James Clear, and Ryan Holiday have built their careers on the foundation of good content that remains relevant over time. Additionally, focusing on creating timeless content that resonates with a wide audience, regardless of age or current trends, can lead to long-term success. Avoiding the temptation to write about fleeting topics or trends can save time and energy in the long run. Ultimately, the most effective approach is to invest time and energy into creating valuable, evergreen content that can make a meaningful impact on people's lives.
Making content relevant and engaging for a wide audience: To succeed in writing, focus on creating valuable and relatable content, regardless of niche, and utilize various publishing platforms to reach readers effectively.
To reach a wide audience and teach valuable lessons, writers should aim to make their work relevant to various topics and experiences, rather than focusing on hyper-specific niches. Self-publishing on platforms like Amazon can be an attractive option due to its speed and flexibility, but the quality of the content remains crucial. The publishing industry is evolving, and while having a platform and a well-written manuscript are important, the focus should be on creating meaningful and engaging content for readers, rather than prioritizing sales over substance. As Joe Weisenthal once said, every book should have started as a magazine article, every magazine article as a blog, and every blog as a tweet. The ease of self-publishing and the shift towards digital reading have led to an oversaturation of content, making it essential for writers to prioritize the value and relevance of their work to stand out.
Writing Short Chapters for Impactful Books: Focus on writing short, impactful chapters to engage readers, finish books, and streamline the writing process.
Authors, particularly those working with publishers, often face pressure to pad their books with unnecessary content, leading to longer, less focused works. Morgan Housel, the guest on the Jordan Harbinger Show, shared his experience of prioritizing finishing readers rather than selling books, and his solution was to write short chapters that could stand alone while still fitting within a connected theme. Housel argued that the length of a book does not determine its impact, as evidenced by the Declaration of Independence's transformative effect despite its relatively short length. To avoid unnecessary padding, Housel suggested writing short chapters and ensuring each one makes a distinct point. By doing so, readers are more likely to engage with and finish the book, making the content more valuable to them. Additionally, this approach allows for a more efficient and focused writing process, ultimately benefiting both the author and the reader.
Focus on timeless principles and lessons: Provide valuable and timeless information to engage readers and ensure the relevance of lessons being taught, rather than filling books with unnecessary content.
Authors sometimes fill their books with unnecessary content to meet word count requirements or to associate themselves with credible figures. Instead, focusing on providing valuable and timeless information is essential for engaging readers and ensuring the relevance of the lessons being taught. For instance, Steve Jobs' intersection of art and technology is a timeless principle that could have been applied in any era, whereas relying on specific examples from a certain time may not be applicable in the future. Therefore, it's crucial to understand the core principles and lessons that can be applied to various situations and contexts. This approach not only helps readers gain valuable insights but also increases the longevity and impact of the content.
Preparing for the Unexpected: Invest in preparedness, not in prediction. Focus on being ready for potential risks to increase chances of success in uncertain situations.
Preparing for risks effectively involves expecting the unexpected rather than trying to predict it. Using the example of earthquakes in California, it's understood that they will occur, but no one can accurately predict when, where, or how big they will be. Instead, resources are dedicated to being prepared for them whenever they strike. This mindset can be applied to various aspects of life, including financial planning and the stock market. While it's impossible to predict recessions or other unexpected events, it's beneficial to have expectations based on historical data and prepare accordingly. Nassim Taleb's quote, "invest in preparedness, not in prediction," emphasizes this concept. By focusing on being prepared for potential risks, rather than trying to predict them, individuals and organizations can increase their chances of successfully navigating unexpected situations.
Maintaining a Financial Safety Net: Bill Gates prioritized cash reserves to cover Microsoft's payroll, enabling the company to weather unexpected challenges. Striking a balance between risk-taking and financial security is key.
Having a financial safety net can provide peace of mind and enable individuals and businesses to weather unexpected challenges. Bill Gates, for instance, prioritized maintaining enough cash reserves to cover Microsoft's payroll for a year, even during times of significant growth and risk-taking. This conservative approach, combined with his optimism, allowed Microsoft to continue operating during uncertain times. However, it's important to note that there's a fine line between being prepared and becoming overly fixated on worst-case scenarios. While having some financial cushion can be beneficial, excessive hoarding of resources may not be effective in protecting against all potential risks. Instead, focusing on enduring and adapting to challenges as they arise may be a more practical approach. Ultimately, the goal should be to strike a balance between taking calculated risks and maintaining a reasonable level of financial security.
Material possessions as social signals: Focus on gaining respect and admiration through virtues, ideas, humor, wisdom, rather than material possessions. Wealth also provides benefits like time control, independence, and autonomy.
Material possessions, such as expensive cars, homes, and jewelry, often serve as social signals rather than sources of true happiness. People may believe that these items will bring them respect and admiration, but in reality, respect and admiration come from virtues, ideas, humor, wisdom, and other intangible qualities. As wealth and social standing increase, it's essential to remember that material possessions do not equate to happiness or respect, and focusing on gaining respect and admiration through positive attributes is more valuable. Additionally, having control over time, independence, and autonomy are essential benefits of wealth.
Finding Balance Between Wealth and Time: Wealth without control over time can lead to stress and dissatisfaction. Prioritize balance between wealth and time for a fulfilling lifestyle.
Having financial independence and control over one's time is more valuable than making a high income but having no control over one's schedule. The speaker, Morgan Housel, shares his perspective on this matter, drawing examples from CEOs and world leaders who have sacrificed their personal time for their professional commitments. He emphasizes the importance of maintaining a balance between wealth and time, and using wealth to get closer to one's ideal lifestyle rather than pushing for more. The speaker also expresses his gratitude towards successful entrepreneurs and leaders, but aspires to live a more relaxed lifestyle himself. He encourages listeners to consider their priorities and make decisions accordingly. Additionally, the speaker mentions the benefits of sharing one's home through Airbnb as a way to earn extra income and bring joy to others.
The Dangers of Trying to Impress Others: Focusing on personal happiness, rather than trying to impress others, can lead to contentment and prevent never-ending consumption.
Material possessions and the desire to impress others can lead to a cycle of never-ending consumption, or lifestyle creep. This process is similar to an addiction, as people keep seeking more in order to gain respect and admiration. However, the speaker argues that nobody cares about you as much as you do, and focusing on making yourself happy rather than trying to impress others can lead to contentment. The speaker also suggests that aiming for a high-quality, comfortable lifestyle, rather than constantly striving for the latest and greatest possessions, can help prevent lifestyle creep. Ultimately, the most valuable financial asset is the ability to not need to impress others.
Chasing Wealth and Fame vs. Happiness and Fulfillment: Valuing relationships, health, and personal growth over material possessions and fame leads to true happiness and fulfillment. Famous people, including celebrities, are not immune to miserable lives.
Material wealth and fame do not guarantee happiness or fulfillment in life. The speaker shares an example of an unkempt tech support worker and contrasts it with a content, healthy, and happy person with a lower income. He then discusses the irony that many people, including celebrities, often chase fame and wealth at the expense of their relationships, health, and personal growth. The speaker shares stories of famous people who, despite their wealth and fame, led miserable lives. He encourages valuing relationships, health, and personal growth over material possessions and fame. The speaker also mentions Keanu Reeves as an example of a celebrity who has managed to maintain a sense of normalcy and humility despite his fame.
Navigating Relationships in Fame: Fame brings unique challenges to forming genuine relationships. Celebrities often surround themselves with pre-fame friends to avoid complications and find it difficult to form meaningful relationships due to public image and comparison to others.
Fame brings unique challenges when it comes to forming genuine relationships. Every new friend met after becoming famous could potentially be a liability due to their desire for attention and connections. As a result, many famous individuals, like George Clooney and Keanu Reeves, choose to surround themselves with friends they knew before their fame to avoid such complications. Additionally, the pressure of fame can make it difficult for celebrities to find true love and form meaningful relationships, as their public image often overshadows their true selves. Comparison to others, fueled by social media, only adds to the complexity. Even at the top, as with Elon Musk, comparisons to others can still be a source of dissatisfaction. Ultimately, navigating relationships and self-worth in the face of fame requires careful management of expectations and a focus on authentic connections.
Social media's impact on unrealistic expectations: Social media's AI-generated content can create unrealistic expectations, leading to potential negative consequences, especially for young people. Instead of comparing ourselves to curated online lives, focus on personal progress and unique aspects of our lives.
The influence of social media, particularly through AI-generated content, has significantly increased unrealistic expectations and comparison in various aspects of life, leading to potential negative consequences, especially for younger generations. From fake influencers and mansions to unattainable lifestyles and body standards, the line between reality and illusion is becoming increasingly blurred. This constant optimization towards what makes us feel worst about ourselves can have detrimental effects on mental health, leading to issues like depression and even suicide. It's crucial to remember that behind every seemingly perfect life online, there may be a completely different reality offline. Instead of comparing ourselves to these curated highlight reels, we should focus on our own progress and appreciate the unique aspects of our lives.
Personal costs of success and wealth: Success and wealth often bring personal challenges, and it's crucial to consider the whole picture before striving for outsized achievements. Unrealistic expectations of public figures can overlook the sacrifices made for great accomplishments.
Success and wealth often come with significant personal costs that are not always visible. Among the top ten richest men in the world, there have been numerous divorces, highlighting this fact. Elon Musk, for instance, is a visionary entrepreneur with numerous achievements, but his personal life has had its challenges. The idea that one can have it all – a successful career and a happy personal life – may not always hold true. It's essential to understand that the good things in life often come with the bad, and it's crucial to consider the whole picture before striving for outsized success. Additionally, people often have unrealistic expectations of public figures, wanting them to excel in both their personal and professional lives without acknowledging the sacrifices that come with great achievements.
The Complexities of Success: Stubbornness, Passions, and Wealth: Success often requires unique personality traits, but can bring challenges. Focus on strengths, invest in expertise, and manage expectations for a fulfilling life.
Successful people often possess unique personality traits that help them excel in their chosen field, but may make them outcasts in other areas. For instance, Steve Jobs' stubbornness and refusal to conform to the establishment played a significant role in Apple's success, but it may have also contributed to his early demise. Similarly, young people should focus on finding their strengths and investing time and energy into becoming great at something, rather than blindly following their passions. Additionally, fame and wealth can bring happiness, but they also come with their own challenges. The book "Steve Jobs" by Walter Isaacson sheds light on these complexities and offers valuable insights into the lives of successful individuals. Another interesting point is that wealth is not just about what you have, but also about managing your expectations. Focusing on reducing needs and wants can lead to a more fulfilling life.
Managing Expectations for a Simpler, More Fulfilling Life: Instead of constantly striving for more, managing expectations and being content with what we have can lead to a simpler, more fulfilling life. It saves time, energy, and money, but it's a constant battle to find the balance.
Instead of constantly striving to acquire more and more, it's more beneficial to manage our expectations and be content with what we have. This can save us a significant amount of time, energy, and money. For example, instead of aiming for multiple houses or expensive vacations, we might be satisfied with one house and some rented or borrowed nice things. Lowering our expectations in this way can lead to a simpler, more fulfilling life. However, it's easier said than done, as many people may still try to acquire more while neglecting the importance of managing expectations. It's a constant battle to find a balance between the two. Morgan Housel, the speaker in the discussion, shared his personal experience with this struggle. Remember, we rise by lifting others, so if you found this episode useful or interesting, please share it with those who might benefit from the message. And don't forget to check out the show notes for resources and ways to support the show.