Finding Mastery with Dr. Michael Gervais - The Only Financial Advice You’ll Ever Need | Morgan Housel

Episode Date: February 25, 2026

What if the hardest part of money isn’t earning it, but knowing how to use it well?Morgan Housel, bestselling author of The Psychology of Money, returns to Finding Mastery to explore the core idea behind his newest bestselling book, The Art of Spending Money. In this next chapter of his work, Morgan shifts the conversation away from accumulation and toward a deeper question: after the basics are covered, what role should money actually play in your life?While most financial advice focuses on how to earn and invest, Morgan argues that the more consequential skill is learning how to spend in alignment with your values. The challenge isn’t simply getting rich. It’s defining “enough.”In this conversation, Dr. Michael Gervais and Morgan unpack why money decisions are rarely logical and almost always emotional… shaped by identity, comparison, uncertainty, and the quiet pull of status. They explore the psychological difference between getting rich and staying rich, why uncertainty is a permanent feature of life, and how financial independence — not prestige — may be the real prize.At the center of it all is a powerful reframe:Money is a tool, not a scorecard.In this episode, we explore:Why money anxiety persists even when you’re “doing fine” on paperHow comparison and status influence spending decisionsWhat it means to use money in service of “a good life”Why defining “enough” matters more than earning “more”How to spend with more intention and fewer regretsIf you’re serious about building a life that feels aligned — not just impressive — this conversation offers a grounded, psychologically rigorous lens on how to think about money differently.__________________________________Links & ResourcesSubscribe to our Youtube Channel for more conversations at the intersection of high performance, leadership, and wellbeing: https://www.youtube.com/c/FindingMasteryGet exclusive discounts and support our amazing sponsors! Go to: https://findingmastery.com/sponsors/Subscribe to the Finding Mastery newsletter for weekly high performance insights: https://www.findingmastery.com/newsletter Download Dr. Mike's Morning Mindset Routine: findingmastery.com/morningmindset Follow on YouTube, Instagram, LinkedIn, and XSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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So hire right the first time. Post your job and get $100 off your first job post at LinkedIn.com slash mastery. Again, that's LinkedIn.com slash mastery. Terms and conditions apply. Getting rich usually requires being an optimist, taking a risk. Staying rich is almost the exact polar opposite. It requires a degree of conservatism and pessimism. And to do well over time, you need to marry both of those like Jekyll and Hyde personality together. If you're purely a pessimist, you go nowhere. If you're purely an optimist, you're run off cliff. What if the hardest part of money isn't earning it? But using it in a way that actually improves your

life. I think everyone what they want to chase with something like money is happiness. I just want to be happier. When I have a happier life, and if I have more money, I will be happier. It's not that money cannot give you a better life. It absolutely can. But happiness is a 10-second emotion. The emotion that is phenomenal and a massive life upgrade that you should chase is. Welcome back or welcome to the Finding Mastery podcast, where we dive into the minds of the world's greatest thinkers and doers. I am your host, Dr. Michael Jervais. A high-performance psychologist named Michael Jervais. who Pete Carroll brought into work with the Seahawks. Famous for his work with Felix Baumgartner

when he jumped out of space in the Stratos project. Olympic athletes depend on something more than just training and talent. They have to stay mentally tough. The idea behind these conversations is really, really simple. It's to sit with the extraordinarily. To learn, to really learn how they work from the inside out. Today's conversation is with Morgan Housel. He's one of the most influential voices

shaping how we think about our behavior and decision-making around money. He's best known for his book, The Psychology of Money. This conversation centers on his newer work, The Art of Spending Money. It's a reframing of what money is actually for. Once, all of your basics are covered. How would I choose to live? Even if money was no object, I had unlimited money, but nobody could ever see it. People don't post on social media they perform.

And when you strip away that, how would you choose to live? I would want a nice house with a nice view. I wouldn't care if it was bigger than my neighbors or not, if nobody could see it. We talk about how comparison and status quietly manipulate our choices. and why the pursuit of more oftentimes crowds out joy if we're not really intentional with how we're thinking about money. A lot of times people think that they are harvesting admiration for their success where they're actually doing is fostering envy. And you don't want people to envy you. It's cool if people admire you.

You do not want them to envy you. That's not a good thing. You should never be proud of people envy you. So with that, let's jump into this week's conversation with Morgan Housel. Morgan, this is exciting to be able to talk to you about, one, your success that you. you've had and the impact you've had on so many of us about thinking about the psychology of money, the psychology of spending, and it couldn't be more timely than right now to have you on. So thank you for coming in. Thanks for having me back. Good to see you. Yeah. And why have you dedicated

your efforts to the psychology of money and the psychology of spending? Why this domain? I think like a lot of careers, it was accidental with a lot of serendipity. I graduated college in 2008 here in Los Angeles, went to USC. And like a lot of young men in the mid-2000s, I wanted to be an investment banker. Kind of before tech existed, before Google and Amazon really existed in a big way, that was what a lot of young men in particular wanted to do.

That's where in the eyes of a 20-year-old, that's where the money and the power was. And so I didn't really know anything about investment banking other than money, power. And before my pre-final cortex was fully developed, that was like, yeah, let's go do that. So that was the goal. Graduate in 2008, the economy's a wreck.

Nobody's hiring, no investment bank, no hedge fund, everyone's laying people off as fast as they can. The only finance job I could find that was willing to give me a paycheck was as a writer for the Motley Fool. And so I began as a writer with no interest in writing, with no, and I would admit almost a sense of shame that in my mind I wanted to be a big powerful banker on Wall Street and now I'm a journalist. What? Not even a journalist. I'm a blogger? So I really did, but I thought I'll do this for six months before I find a real job. It's kind of how it was in my mind. And like a lot of things in life, I actually, after six months or a year, I went, you know what, I love this.

I actually love doing this. And what I loved is that I felt like I could sit up in the bleachers as an outsider watching the game and just try to piece together what was going on. And I wasn't impacted by a lot of the incentives of the players, so to speak, the investment managers, the hedge fund managers, the financial advisors who had good people but had a lot of incentives in their field. to act a certain way, to believe a certain way. And I feel like I could just pick it apart and just try to figure out what was going on in people's heads. I was never interested in what stocks should you buy. Where's the economy going to go next?

Because I didn't think anyone was any good at that. I just felt like it was a lot of smoke and mirrors going on, but I was really interested in what's going on inside of people's heads. That was interesting to me. And why that was also important as a writer is because it's a very competitive industry. There's a lot of writers out there. And online, you've got to get people's attention. And if I was just writing articles about, here's what I think that Dow Jones is going to do this week.

You're competing against 10,000 other people. You're just going to get lost into the ether. But if I could tell a story about behavior, not only did I think it got you closer to the truth of what was going on in the world. In my mind, it was more entertaining to tell a story about behavior. And what I didn't know, but I quickly found out, is I think there are more stories about how people engage with money, the psychology of it, greed, and fear, people who do a good job, do a very poor job, people who are addicted to money, people who couldn't care. There's so many stories to tell. And so I just, that became kind of my niche. I was just like, I just want to tell stories about how people deal with the psychology

of money. And over the years, too, I finally realized one of two things. This is a little bit talking my own book. But I think there are two topics in life that everybody, literally everybody, has an obligation to learn about, and that's health and money, because it's very difficult to have a good life unless you understand both of those things. You can have a great life not knowing anything about organic chemistry. You know, have a fine life, not knowing anything about meteorology. It's very difficult to have a good life unless you have some idea and some level of sophistication about money and health. And so that's why it was a topic that I found very interesting that I really enjoyed digging into. And I felt like if I can tell stories about how people deal with the psychology, the behavior of money, that can actually do a lot of good for people.

You know what I really appreciate about how you just opened up our conversation is that you worked from a personal experience, brought me into that. Then you worked from a first principle. And then from your first principle, which is to really understand health and money, you said, how am I going to better understand that and share my insights with others? So the first principle is to live a good life, you need to understand these two basic things. And then you want to be a storyteller about best practices, insights. Yeah. Okay, so you are first principle based. There you go. And when it comes to money, do you want to talk about saving or spending more? What's interesting is I spent the first 15 years of my career writing about, I would say,

the accumulation of money. How do you save and how do you invest? And it's a very important topic. and I really enjoyed that topic still today. The genesis of my recent book, The Art of Spending Money, was I realized in a moment of reflection, probably five years ago, that if you asked me about my philosophy of accumulating and investing money, I could talk to you for hours and hours.

But if you asked me five years ago, if you said, what are your philosophies of spending money? I would have drawn a blank. I hadn't really thought about it. Well, in your first book, by the way, congratulations. on it being a massive hit. Thanks. Can you share the number of books that you sold today?

It's just over 10 million for the first book. I mean, to put that in context, you are in the 0.01% of all books sold. I'll put it into context. The first print room was 5,000 copies, and we would have been elated to sell that many. One of the things that I write about is how very difficult it is to forecast anything because there are elements of trends that can't be quantified, that you cannot look at it beforehand

and say, well, the numbers all line up and therefore if A happens, then we expect B to happen. In the real world, there's just so many weird, weird, quirky things. Like, we're not good at predicting the future. Very difficult. Yeah, it's very difficult. It's a good way to say it.

Okay, so the psychology of money was your first book, massive hit. And you probably didn't have a ton of money going into that, but you're probably, your life and lifestyle are very different now. Is that a fair assumption? Yeah. Yeah.

So why was that book so radically successful? In anything that has an outlier success like this, I think this is true for music. I think it's true for art. It's true for social media posts and books. And anything where there's a level of success that is an order of magnitude more than anybody expected, it's a very high degree of luck. And if luck is the wrong word, maybe a better word is very difficult to repeat. And so, you know, there are a lot of really talented. talented musicians out there.

Like, why was you two and Michael Jackson and Taylor Swift? Why did they rise to level? There are artists out there who are just as talented who never get there. There's an element of right place, right time. And kind of a social tipping point, to use Malcolm Gladwell's phrase, of like, once it gets to a critical mass, you can't stop it. And it takes on a life of its own. And I think the important thing is, for most of those things, it's very difficult to repeat.

And so in my mind, I would call that luck. Now, if I said, was Bob Dylan lucky? Like, no, he's obviously talented. But could he repeat what he did in 1960s over and over and over again? Probably not. And I bring that up. I listened to this interview with Bob Dylan a couple months ago, and he said, I might be getting some of these dates wrong. But he was like, the vast majority of the good work that he did came in a three-year window in the 1960s.

And he was like, I've never been able to repeat that what was my, he was like, my brain just worked differently back then for this three-year window and nothing I've ever been able to do then could match that. And so that's what I think about, not necessarily luck, because luck is kind of a derogatory word, but I think, are you able to repeat it over and over again? Is a better way to think about it. And so what's the takeaway that you're working from about how to position yourself to catch a zeitgeist, to catch that type of lucky momentum? Obviously, you're skilled. You talked about something that mattered to you. You took a deep dive into it. you had an honest expression. What else goes into it?

Like, what else did you do behind the velvet rope that maybe we wouldn't be privy to know? I think the vast majority of finance books and financial content are formulated as a lecture to tell you what you're doing wrong, shame you, and the solution is a formula. That's how most of it is. And most people have no interest in reading that. And either one of those, don't tell me that I'm doing it wrong because I feel bad of my myself. And don't give me a formula that looks like it came out of algebra two.

as the solution for. I have no interest in that either. And so I've always very intentionally shied away from that. I don't tell you what to do in any of my books because I don't know you and you're different than me. So who am I to say, here's how you should live your life? We might have very different goals. We almost certainly have very different goals. And if there's any solution that I might provide in there, it's a story about how other people have dealt with the behavior of it rather than here is my formula to solve your problems. That just doesn't exist in the world. And so I think, that's been sorely lacking in a lot of the advice field. If you could just, don't tell people they're doing it wrong. Say, like, look, we're all different. And maybe you're doing things

that you might regret. And I don't know what those things are because it's going to be different for everybody. But here's how you can think about the behaviors that go through people's heads when they're dealing with these problems. And I'm going to leave it to you. I'm not going to give you advice. I'm going to leave it to you to contextualize that behavioral insight that I just shared in your own life. Finding Master is brought to you by Defender. In the conversations I have with world-class performers, there's this theme that keeps coming up again and again.

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Because you did talk about the philosophy, to understand your philosophy a lot. I don't want to lead you to an answer. And you did talk about, like, what is enough, you know, as a provocative question. But quick summary, because I do want to get into the art of spending. And I do want to contextualize it with how money is experienced right now. Yeah. You know, at the time of recording, there's a lot of anxiety about money. So before we go forward, let's kind of reground on the psychology of money and just a couple

of things you hope people could entertain right now that maybe haven't read it or are, they read it, you know, six months ago. I think one, this is one of the first chapters of the book, is kind of similar to what we're just talking about, the idea of luck and risk. And I think luck and risk are actually like the exact same concepts, just in opposite directions. In my mind, the definition of risk is there are things that can happen in the world and in your life that are outside of your control that have a bigger impact on outcomes than anything you can do intentionally. That's my definition of risk. That's interesting. What is the definition of luck? It's the exact same thing. There are things in the world,

outside of your control that can have a bigger impact on outcomes than anything you do intentionally. Exact same definition, just in opposite directions. I hear that as the definition of luck. I hear that. I don't hear it in risk. You know what I think, how I think about risk is that there is an unknown just on the other edge of your capabilities. So it is not risky for me to, I don't know, have people observe me signing my name. Yeah.

I'm pretty good at it. Might be some variance, but, you know, however, like I'm being kind of cheeky about it, but there are things that I do that I don't have command of. I don't, most things, I don't have a command of. And I'm right at that messy edge where if I keep going, I know that I'm in a territory where I don't have proficiency. And I'm taking a risk to stay longer or extend further in a place that I don't have proficiency. And that's where I see risk, even like showing up to maybe this is where you're at.

There's risk involved in asking a question. There's risk involved answering a question because you and I have never done this before. And so there is risk just showing up in the unfolding nature of a moment because you and I don't know how the next moment will go. So there's an inherent risk of just being with the unfolding experiences, which are out of our control. Is that where you're orientating your definition? I don't disagree with that.

I would also frame it like this. There's a good quote that I love, which is risk is what you don't see. And so you can and you should in your personal life take stock of all the risks in your career, in your personal life, in the broader world. That's a good thing to do. When you're done with that exercise and you have a list of risks in front of you, the actual biggest risk in your life is the thing that's not on the list. That's what makes it risky. Because you can't see it. Because you can't see it and you're not prepared for it.

And it is always like that in the broader world. If I said, what were the biggest risks in America over the last 25 years? It's subjective, but I would say 9-11, COVID, and Lehman Brothers going bankrupt. And the common denominator of all three is that nobody saw them coming until they happened. And you could put Pearl Harbor in there.

Like, the biggest risks that moved the needle the most, what is unique about them is not that they were big. It's that nobody saw them coming until they happened. And I think I would put luck in that too. I see that. When people say they get lucky, it's like, I never saw this coming. I never expected this amazing thing to happen.

to me. Maybe that was your flight got canceled and then you had to have dinner in a bar that night and you met your future spouse. Are you trying to embrace luck or reduce luck? I think luck and risk. I take that as a package and I just want to acknowledge the power that they have. One of the reasons this is important is because in finance, people tend to obsess over risk. They talk about risk all day long. And if you're talking to your financial advisor, you'll hear him use phrase like him or her like risk adjusted returns. Like we talk about risk all day. Nobody ever talks about luck. Nobody ever talks about luck. And in fact, if I said, you got lucky, I looked jealous and bitter, right?

That's not a good thing to say. And if I look in the mirror and say, I got lucky, that's hard to swallow too. I don't want to accept that. So we're very cognizant of risk, and we tend to just push luck out of the way. And it gives us a false sense of people's performance. When you're judging other people or judging yourself about the influences that are totally out of your control that had an impact. One of the examples I used in the book is Bill Gates went to one of the only high schools in America that had a computer. By some accounts, probably the only high school at the time that had a computer.

Was he hardworking, genius, visionary? Yes, all the way down. Did he also have this unbelievable stroke of luck that was out of his control? He had no influence over it. Yes, he had that as well. And by his own reckoning, there would be no Microsoft if he didn't have that. And so, look, there's a lot of other people who went to that school who did not become sent to billionaires. So it's not to say that he doesn't deserve it.

That's not the point. But in any level of outsized success that you dig into, this is a point from Daniel Kahneman, the more of the success, the higher the degree of luck there was in there, or at least some degree of I couldn't repeat that. I couldn't do that again. Very cool. Love how you are framing the way that you think. And you're definitely a systems thinker, which I can appreciate. Okay. Let's go back to the question.

two, three things that people can think about to entertain as they walk away from this conversation with that it's important for the psychology of money that you wrote about. One that I really like from the book is from the book is the idea of getting rich versus staying rich, which are two completely different skills. Getting rich usually requires being an optimist, swinging for the fences, taking a risk. Staying rich is almost the exact polar opposite. It requires a degree of conservatism and pessimism and worst-case scenario things. And to do well over time, you need to marry both of those like Jekyll and Hyde personality

together. You have to have both in equal amounts. You have to be very optimistic about the future. Your own future, the country's future. You have to be optimistic to get rich. It's required. And you have to acknowledge how difficult it's going to be between now and then. Very optimistic on where we're going and very realistic about how hard it's going to

get there between now and then. If you only have one of those, it's not going to work. And I think there's actually a lot of people in the economy who are pretty good at getting rich, but they have no ability to stay rich whatsoever. So you can quantify this. There's tremendous turnover on the Forbes 400 richest list, the list of billionaires in America, turnover that has nothing to do with death or whatnot. People who just made a fortune and lost it, a tremendous amount of turnover on those lists. Because it's one skill to say there's a trend in the Internet, in AI, and oil, whatever it might be, and to go all in on it. Like that's a skill, and we should acknowledge and appreciate that skill.

It's something completely different to have that skill and at the same time have the counterbalance of say, look, I took a big risk, but I'm also kind of scared about economic cycles and political instability. And I don't know if I can repeat what I just did. And so let me take a little bit off the table and I'm going to be really weary of debt. That's a completely different skill. Once in a while, you'll see people who have it in spades, but it's rare that somebody can get rich and stay rich. So a foundational psychological disposition to get rich is optimism. A foundational psychological disposition is to also discern the risk. Is that correct?

The way that I love contextualizing this is what's now called the Stockdale paradox, which came from a guy named Jim Stockdale, who was the highest ranked POW in Vietnam in Vietnam War. He was an admiral. He was a POW. And he gave an interview after the war. And he said, you know who did the war? worst psychologically as POWs? It was the optimist. Because the optimists, while there are POWs,

would say, we're going home by Christmas. I can feel it. We're going to be, we're going to be home by Christmas. And then Christmas would come and go and they were despondent. They just lost it. And he said, the people who did the best psychologically were people who are very optimistic that they would go home someday. We're going to see our wife and kids again. I know it. We're going to, but we're not going home by Christmas. It's not going to happen. They were very optimistic on where we're, on the ultimate result and very realistic about how hard it would be to get there. And I think, you know, obviously that's a very extreme situation that they're dealing with. But I think that mindset of optimistic on the ultimate outcome and very realistic on where we're going to go.

Because if you're only optimistic and purely optimistic, you're not actually optimistic. You're just complacent. You're complacent with how fragile and uncertain the world is. And you see that very often in startups, tech startups. You know, there's a lot of founders, very charismatic, very talented, can build incredible products. But they are just as optimistic with their balance sheet. as they are their wisdom, and a huge portion of them will be bankrupt in the next five years. There's a long history of that cycle.

You are speaking directly to what's called grounded optimism, which is like, optimism is a fundamental belief the future is going to work out. You know, the best is yet to come. That thinking is, I haven't met a world's best that is not fundamentally optimistic. That being said, toxic optimism, you know, this toxic positivity, that idea that it's always going to work independent of work is problematic. So I love that you are pointing to what we would consider to be grounded optimism. And just as a side note, like optimism can be trained.

This is not something that you are necessarily, as far as we can tell, born with. It is influenced by parents, your neighborhood, your friends, who you hang out with, what news station now you're listening to. And so let's go back to a couple of principles. You're saying invest in a psychological disposition of optimism and make sure it's grounded in the work required to make that so. Yeah. And it's not an easy thing to do because those are often conflicting personalities. Okay.

They go against each other. So there is this cognitive dissonance of having it at the same time, which is why it's a pretty rare skill. Yeah, but without it, without optimism, I haven't met a world's best. That is not fun. Like I say it again, like without it, we just keep getting in our way. to minimize risk to, I don't know, save ourselves from... If you're purely a pessimist, you go nowhere. If you're purely an optimist, you'll run off a cliff.

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finding mastery listener, head to Davidprotein.com slash finding mastery, where right now, if you buy four packs, you'll get the fifth for free. You also get free shipping and then 10% off every order. Again, that's Davidprotein.com slash finding mastery. I hope you'll check them out. All right, let's actually move forward to the context of what's happening today and money. Again, at the time of recording, there's a lot of uncertainty in the world about money. Precious metals are kind of radically on the rise. There's crypto that's under-tow. The dollar is compromised in a lot of ways, it seems to me, at least. And we're struggling with inflation. And so can you just, can I get your take on how you're thinking about money in general before we get to the spending of it. And maybe you're going to

drop your pearls of wisdom about the philosophies that you would want people to entertain. Well, I hope this doesn't minimize the uncertainty that we have today because what you just said of dealing with inflation and political uncertainty is absolutely true. I've been studying money in this topic for over 20 years now. At every single moment of the last 20 years, at every single moment we've been drowning in uncertainty, drowning in it. So I think there's There's very little, very seldom are there actual changes in the amount of uncertainty in the world. What changes is people's perception of it. Wait, pause there for a second.

You won't lose your train of thought, right? Nope. I'm so glad you're bringing that up because unprecedented, you know, all I start to just glaze over. Like, wait, hold on, you're missing the dark ages were hard. You're messing like, you know, the 1800s were really tricky, you know, like you're missing a lot of historical context. Go back to the Roman era where, you know, I mean, It was brutal. So here's an example that I use.

I use this in my second book, same as ever. There is a haunting radio recording from a New York City radio host. And it's recorded about 8 a.m., which that time will make sense to you in a second. And the radio host says, good morning. It's Tuesday, September 11th, 2001 in New York City. It's going to be a beautiful day in New York, sunny skies, looking forward to the day. So look, if you and I were having this conversation on September 10th, 2001. We would both probably agree. Not a lot of uncertainty in the world. It feels pretty good right now.

Got a reasonably strong economy. Things are looking pretty good. Politics. Things are going okay. You were completely blind to what was out there in the world. And so I think there's a lot of that. It's not that the uncertainty changes. It's that your perception and your awareness of it changes. Because obviously on September 12th, we would have said the world is more uncertain than ever. But was it more uncertain than it was on September 10th? No, you were just oblivious to it on September 10th. So I think there's quite a bit of that. There's a lot of uncertainty today. in the world today, there was 10 years ago. There was 10 years before that. And even if you could say the uncertainty that exists in the world today, that is political, did that not exist a year ago?

Were we in a more stable time a year ago? No, we were just oblivious to what was going to happen in 2026. We just weren't thinking about it. And so I think, yes, there's a lot of uncertainty. There's always a lot of uncertainty. There'll be a lot of uncertainty 10 years from now. Of course, it seems like there was less uncertainty in the past because we know how the story ends. How do you help people work with uncertainty? I feel like you're going to kind of move into the psychology of dealing with change and high-performing Vuka-based environments. But I'd love to get your take on it. I like the general idea of read more history and fewer forecasts.

There's another great quote that I love, which is when you haven't engaged with history, everything feels unprecedented. And so if you become more of an amateur student of history, which some people enjoy, some people don't. But if you do it, you realize that it's the same movie over and over again. It's a different cast of characters. It's maybe a slightly different plot. The movie that we live in is the same thing over and over again. And so what we're dealing with, the uncertainty that we're dealing with today, they dealt with the same thing in the 1980s, in the 1970s, in the 1930s, and the 1950s.

Pick your decade. They dealt with rising inflation, political instability. They dealt with everything. It's a different cast of characters. It's the same movie and over and over again. we deal with the uncertainty that AI will cause our future. Do you know what they dealt with in the early 1900s when there were all these new trains and tractors and cars and airplanes

and they didn't know what that was going to do their future? They lost their minds in the same way that we do it today. And so when you engage with history, it gives you more perspective of like, yeah, I have no idea what's going to happen over the next 10 years. But welcome to the club. It's always been like that. There's never been a time when it has not been like that. but we give ourselves the impression that it is

because we can look back at the 1950s, let's say, and say, God, they were so lucky. The world was so stable. The only reason we think that is because we know how the story ended, which was there was not a nuclear holocaust, which they thought there would be in the 1950s, which was the economy did not fall off a cliff after the World War II spending ended.

They thought it would back in the 1940s. So there's all these things that we know now that they didn't back then. And so it gives us the impression that they had more certainty than they actually did. And I also finished by saying, I guarantee you, guarantee you that if you and I have this conversation 10 years from now, we will look back at 2026 as an era of relative stability,

not because it was stable, just because we'll have known how the story ended. Clever. With that framing and with the grounded approach you have in history to understand frames, how are you thinking about saving and spending? right now. In my personal life, when I think about saving, there's two things that are important. One is I'm saving for events that I cannot even fathom because risk is what you don't see. And so if you looked at my assets, there's a decent amount of cash in there. And you can say, are you saving for a house? Are you saving for a car? No. I'm saving for a world in which I have

no idea what's going to happen to my life or to the broader world over the next 10 years because nobody does. And so if you're only saving for events that you can think about, then by definition, you're not prepared for the surprise. And it's always a surprise that throws you for a loop. Risk is what you don't see. The other thing about saving is what I want more than anything out of money is independence. It's the only goal that I want out of money. And yes, I like a nice material life.

I'm not anti-spending. But what I want more than anything is just the ability to wake up every morning and say, I can do whatever I want today. I just want independence. And so when I save money, I don't necessarily think of it as I'm saving money. I think of it as I'm buying independence. I'm purchasing independence, a little token of independence every time I save money. And that's not delayed gratification.

I feel like I get use out of that today of waking up and knowing that I have independence, waking up and knowing if the economy were to fall off a cliff tomorrow, my career were to collapse tomorrow, we're going to be okay. Things might get a little tough around the edges, but like we're going to be okay. That level of independence gives me a tremendous amount of gratitude and content. and moments of happiness that I value more than anything. Talk about the imaginary line of where that exists. And I know it's different for everybody,

but how do you think about how much is enough in this case to buy independence? And what percentage of your resources are you allocating to cash? It's a two-part question. I think my cash has always been, my net worth has changed over time, but it's always been in the 20 to 25 percent level. Which if you're a financial advisor, you would say is way excessive for somebody my age. But I have no aspiration to be the world's greatest investor.

It doesn't appeal to me at all. What I aspire to do is sleep well at night and tuck my kids into bed and be like, you're okay. That's what. And now some people would disagree with that. And this is why money is such a personal thing. I don't recommend anybody necessarily do it like I do. It works for my personality. It might not work for years.

Yeah. And you're saying that 20% allocated. cash is a conservative basis based on your age. Based on my age. Yeah. And even if I was 70 years old, most advisors would say that's too conservative. And where is the other 80% invested for? And my entire net worth is a house, a checking account, and Vanguard index funds and shares of

Markell where I'm on the board of directors. That's it. It's very simple. It's as simple as you could possibly get it. And that's by design too. I think the more simple your investing strategies. Do that one more time. So checking account is the cash.

Cash. Yeah. And checking savings. Yep. Same thing. Yeah. Okay. And then what are the other two?

Your house. My house. Cash. Vanguard index funds. Just very low cost diversified funds where I'm owning basically a slice of the U.S. economy. It's a simple and plain vanilla as it gets. And shares of Markell where I'm on the board of directors.

It's a large insurance company. Very simple allocation. I mean, that's another thing. If you were a financial advisor, you would say, no, you need some more complexity in here. You got to have some fun, you know. I'm not necessarily against it, but I value the simplicity more than anything. And the cash is the imaginary, there's an imaginary number for you where it buffers against the unseen risks that are coming. Yeah.

And it gives you enough kind of wiggle room to be like, okay, I can buffer and manage that. And if I wanted to kind of jump on a plane and come down to Finding Mastery, like I can. Yeah. Yeah. I've never tried to justify it scientifically. So my level of cash and all my asset allocation, I just use the, yeah, that feels right to me, test. And I think people get too cute when they try to get it, you know, go into Excel and try to get the exact number. I'm like, does it feel good to you?

Good. Move on. Go enjoy your life. In our earlier conversation on the podcast, I think you talked about like pay off your home or don't pay off your home. You had that type of question, right? Rent or buy. I think we're in that type of weeds. And let's just go there one more time because it's expensive.

right now to buy. Oh, yeah. To own. Like, huge. Look at my son who's 17. I'm like, wait. You know, the percentage, like, whatever his earnings is coming out of college

relative to what a home cost in my neighborhood. Like, how? I think it's not hyperbole to say that in many parts of the country, the big cities, unless you work in tech, you work in finance or your parents are helping you. You're not buying a house. That's directionally right for a lot of the country. And I think it's the biggest social problem that we have in America right now because there are so many problems that are downstream of housing affordability. For most young people, if you can't afford to buy a house, statistically you're much less likely to get married, much less likely to have kids, much higher degree of alcoholism, much higher degree of mental illness.

It stunts your maturity into adulthood if you feel like you're always just suppressed. it's a very clear box checking step into adulthood that most previous generations had. So if you look 30 years ago, the median age of a first time home buyer was 28. Now it's 40. And there's more people over age 70 buying homes today than there are people under the age of 30. And so that's, you know, if there is a pitchfork and torches issue in America right now where people like, you should be mad at this because it's a big deal. It's how we've managed housing over the last five years or so.

And I'll say one last thing. I think one of the biggest, the worst things that we did over the last 30 or 40 years is convince people that rising home prices are a good thing. It did a lot of damage to a lot of people, particularly the younger generations. In what way? Well, here's how I'd frame this. If you bought a house for $300,000 and it doubles in price, now it's worth $600,000, you're a homeowner, you just think, amazing.

I've just made, I've never made that much money in my life. I just made $300,000. No, you didn't. because if you sell that house for $600,000, you have to buy another house that also inflated in value over the last 10 years, that also cost twice as much as a dead 10 years ago. And the tax basis is enhanced. You didn't gain anything. But you know who did lose on that tremendously is the young couple, the young generation,

who now their entry into the housing market does cost twice as much. And so we really screwed the young generation in order to maintain an older generation that actually didn't gain anything from it. It's just kind of like an accounting trick that they played on themselves. That's why I think it's such a big deal. Finding Master is brought to you by AG1. One of the through lines and high performance is consistency. Finding routines that support your mind and body day in and day out. And for me, AG1 has been one of those routines for over a decade now.

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So is the potential anecdote here is to change the psychology of ownership, meaning like rent is good, no problem, figure out how to maximize that expenditure. One of the issues about this is that most big economic problems are very complicated. You know, how do we extract more oil from the grounds? Really complicated problem. Let's not pretend that that's an easy thing. The housing issue, I think, is actually fairly simple. And that's we don't build enough homes.

and we have the capacity. We have the money and the materials and the wherewithal to build them, and we don't. Why don't we? Largely because of local zoning issues that makes it damn near illegal to build homes where people want them to. What does that mean?

If you are a home builder here in Los Angeles and you buy a big plot of land and you say, great, I'd like to build 100 homes on it now, well, you go down to city hall and you apply for an application and it's going to take you five years and a quarter million dollars to get that application and there's a decent chance

that it's actually just going to be blocked anyways. And so that's what it was. And that is a reasonably new phenomenon in the last 50 years or so. When the World War II vets came home from the war in 1945, late 1940s, or 16 million veterans that came home, they were all, you know, age 18 to 30, roughly, all looking to what they wanted more than anything

when they got home from the war was stability. And there was a massive housing shortage because during the war, we really didn't build any homes. We were building tanks and airplanes and stuff. It's massive housing shortage and people were really up in arms over it. But back then, there was very little zoning laws. And so if you were the Levitt brothers in New York or Pennsylvania, you could go buy a thousand acres of abandoned farmland and build as many homes as you want.

You barely needed anyone's permission to do it. It was a very different world. So it was much easier to ramp up the housing supply when there was a lot of demand. And it took a couple years, but we did it. We built millions and millions of homes very quickly. so that by the early 1950s, you could go by the house in Levittown in Pennsylvania or in New York. And that's where that created that prosperity of that generation. And it's just nearly impossible to do that these days outside of some areas like Texas and whatnot where they have very loose zoning laws.

But the areas where a lot of people want to live here in California, New York and areas like that in Seattle, where I live, it's very difficult to build. Speak to the renter right now. the 26-year-old renter, how would you help them think about money? My wife and I rented for a long time. We rented for 10, 15 years, and it was a fantastic thing to do for us. At that period of life, it was the absolute right thing to do with it. Because our careers were in such flux, and our dreams and our ambitions were in such flux that there was one point where, like, yeah, we should live in L.A.

That's the right thing to do, and we did. And then a year later, it was like, no, we need to move to Washington, D.C. That's what, okay, let's do that. And then, oh, actually, we need to move to Baltimore. Let's do it. So we lived in five or six different cities. And every couple years or every 18 months or so, we packed up and left. And if we were locked down by owning a home in that period of life, it would have been an anchor like no other.

Now, when we had our first kid, that flipped like a light switch. That was, I remember the day after our son was born, I had this overwhelming sense of like, I need my own house and I need it right now. And so at that phase of our life, when we were young parents, desperately career-wise, And now child-wise, I was like, I want to have an anchored home base that is stable. That feeling was overwhelming. So we bought that. And at every phase, like, we bought homes that we could afford.

And it was a different era. It would be much more expensive now. But we could afford it. And it was the right thing to do for us at that phase of life. And so I think a lot of people go astray when their calculation for should I rent for buy, they try to solve that on a spreadsheet. Well, which is cheaper? Am I going to save more money?

I can write off my interest? That's not. Like throw that away. Is it right for the phase of life that you're in? That's how you should try to answer this question. And this is another area that I think we did a lot of damage of convincing people, really in the early 2000s of like, hey, 22-year-old, you can get a mortgage for 2%.

You can go buy a house. And look, they could afford it. Homes to work cheap back then. But then you anchored them. The transaction costs are so much greater to try to move when you own a house versus rent. If you can't afford a home. and in the neighborhood that you want, because there are homes in the United States

that you can afford, but maybe you don't want to live there to your earlier point. Maybe it's schools, maybe it's weather, there's lots of conditions. Would you advise, just based on how you think about strategy here, to rent in the neighborhood that is ideal for you,

or to buy in a home and get into the slipstream of the benefits of homeownership? Or are you clearly saying that, wait, hold on, home ownership is way overrated. This is not the path. I think financially it tends to be overrated. Spiritually for your family or whatever word you want to use in terms of the stability

and having a home base for your family, that might be underrated. If you have small children and a stable job, owning your house is amazing. And I think it makes you invested in your community to a different level as well. When I was a renter, I really didn't pay any attention to local politics because I was like, I'm transient. I'm just a guest here. I can slip in and out whatever I might. Now that I'm a homeowner with kids, I'm like, I'm paying attention to that.

I'm paying attention to local tax rates and building new schools and whatnot. And that's great. It's good to be invested in your community. And I think it takes you to another level when you actually own your house. I would also say, if you think renting is throwing your money away, try owning a house that you can't afford. That's throwing your money away. Try replacing a roof that's leaking.

That's throwing money away. So it's very easy to fantasize about the financial. aspect of owning our own house and like, oh, I'm not throwing my money away in rent. Owning a house can be a financial boondoggle for people. When you think about rent, what percentage of your income do you think is a kind of reasonable, healthy allocation for people to spend on rent and or mortgage? But let's just do rent. I don't know if there's any hard and fast rules, but I would want to live a life in which

after rent and car payment and student loans and call it basic living, food, Netflix, that kind of stuff. I could still save 10% of my income. Now, in some part of the countries, that'll be a stretch for people. But that's what I think you need to... That feels really thin. I think that I would consider that... So maybe I'm really conservative.

Well, look, the average savings rate in America is 3 or 4%. If you're saving 10, you're doing great. That's pretty good. But I would use that as a baseline. You know, I have, and I've always wanted to be the kind of person who can save more than that. But I would say if you're not, if you can't, if after paying all your basic bills, you're right at the razor's edge. I think there is some extent.

It's a hard balance here. So this is not a black and white thing. But there is some extent where it's like you might need to lower your ego a little bit. And maybe you can't afford to live in that neighborhood. And that's okay. That's okay. That's not that big of deal. How is the status game show up in your understanding of money?

And people through social media and keeping up with the Joneses, that's not a new phrase. Like, how insidious is that? And how do you address it for folks? I think one of the reasons that money can be so dangerous. this aspect is that it's so easy to measure. And so if I said, who's a better dad, me or you, there's no way to measure that. We could get intangible about it, but there's no dad's score. Who's a better husband, me or you? There's no husband's score. We can talk about subjective things, but there's no score. But if I said, who is a higher net worth? Me or you? Well, we can measure

that down to the penny, apples to apples. Who has a higher income? Me or you? Who earned higher returns in the stock market? Me or you? We can measure that cleanly apples to apples. So because even though it's not clearly not the most important thing in life, you know, for I think both of us being a good dad, being a good husband, that's more important. But money's so easy to measure that it becomes the ultimate metric that we chase and track. I would love to be a 10% better dad. But it's hard to track that. I don't know how I would track my own progress. I would also love to increase my net worth by 10%.

And I could track that very cleanly. And there's both of them have proxies, which is, or signals. if you have a big house or a big fancy car or you're the one that is buying dinners for folks like there's a signal that you have a net worth of significance but those signals are dangerous. They're very dangerous. Yeah.

If you see somebody driving a $100,000 car, the only thing you know about their net worth is that they have $100,000 less dollars than they did before the bonte car. That's the only thing. I was a valet when I was in college and sometimes people would drive in in really fancy, expensive cars.

And some people I got to know them, they come into the hotel on a daily, weekly basis. And a lot of them were not that successful. They were like a low-level law clerk or whatever, and they were spending half their money on like a Porsche lease payment. And so it gives this impression.

It's a very dangerous impression. Ooh, he's driving a nice car. That's a rich person. No, no, no. And the opposite is true, too. Sometimes you meet people who, when you get to know them, you're like, that guy's very wealthy. You got makes a fortune.

And he's driving a Toyota Tacoma. you would never know. Do a trend analysis if people are interested in where to invest. So we talked about saving. We have not talked about spending yet, which is the art of your new book. But let's do investment. Are you more interested in real estate as an investment? I know we're beating that up or the stock market.

Me personally, I have nothing against real estate as an investment. Now, I would say the house that you live in is not a financial investment. It's a family investment. good money. You get good memories and you get to hang out with your kids. It's a family investment. Financial investment's not. Owning real estate that you're renting out to other people, that can be a decent investment. Now, a lot of people get into the trap of thinking that is passive income. It's a very dangerous set of words, passive income. They think, I'm going to buy a duplex and rent it out, and that's passive income. No, no, no, being a landlord can be a full-time job. You're going to call

you at 2 a.m. because the toilet's leaking. The roof is leaking. They didn't pay rent. They abandoned it. They left the place trashed. There's nothing passive about that. That is a job. with a capital J. And so I have nothing against real estate. But look, owning a diversified stock fund, that can be relatively passive. Now, you have to deal with the emotional ups and downs and the uncertainty, and that's a real cost. But that is, if you just invest in stock funds and you leave it alone for 10 or 20 years, it's going to pay you a dividend every quarter. That is closer to passive than being an active landlord. And so I have nothing against real estate. I don't think the evidence is that persuasive that even before you adjust for the hassle and the work of being a

landlord, that over a long period of time, you're going to earn a substantially higher return than you would in a diversified portfolio, especially when you adjust for leverage and things like that. And so it's never been that persuasive to me, but I have nothing against people who do it. I think a lot of people who do it love it. And so even if they're not necessarily earning higher risk adjusted returns, they love doing it. And I respect that aspect of it. Okay, if we knew what you knew, how would we save better and how would we spend better? I think what's been helpful for me, and I think a lot of people get this wrong with money,

is you've got to spend more time looking in the mirror, so to speak, and try to figure out your own personality, maybe you and your spouse and your kids, your own unique goals, your own unique flaws that we all have and should embrace, even if those are very different from a lot of people around you. Because a lot of financial mistakes happen when you, engage with a financial plan that is right for somebody else but wrong for you. And it's an easy trap to fall for it because you're like, I just watched Ken and his wife do X, Y, and Z, and they're really happy and successful for it.

I should go do that too. And maybe, maybe not. Maybe it's not right for you. So there's a lot of things. I find this really interesting of I tried to make that point in my book. And in the last chapter of psychology of money, I really opened the kimono and said, here's how my wife and I manage our money. There's no numbers in there, but here's how it's barely even.

But I really tried to open it up and say, this is how we think about money personally. And the number of people who would email me and say, I liked your book until I read that chapter, and now I can't trust you because you're doing X, Y, and Z wrong. Even after I made the point of saying, everybody's different, and I don't recommend you do this, but this works for me. You have to figure it out for you. I think a lot of people can take it as an attack if you manage and spend and save money different than I do, than anybody else does.

They want to think that there is one right way to do it and the right way. is the way that they're doing it. And if anyone else does it, does it different, they're clearly wrong. And so people understand that concept. If I like Italian food and you like Mexican food, we're not right or wrong. It's just subjective. More power to you. I hope you enjoy your dinner tonight. But with money, they want to think there's one right answer. And if you're doing it different, you're clearly wrong. And I think most financial debates, when people are arguing over the best way to invest, you do Bitcoin, you do real estate, whatever it might be. They're not actually disagreeing with each other. It's people with different time horizons, different risk tolerances,

personalities talking over each other. And they can't accept that you should just figure out what works for you and do that. And so I think the single most important thing you can do is spend less time trying to mimic what other people have done and spend more time looking in the mirror and say, what is my personality, what is my disposition, what are my unique goals. So you're on record talking about like the greatest financial skill that you can have is self-awareness, is to really understand yourself. and what would be some of the best practices that you would support or challenge people to do more often? I try to live in a humble bubble, is how I described it financially of. I want my goals and my aspirations and my strategies to really not leave the roof of my house. I just want to think about my family and how money can benefit us as a little tribe.

As soon as my goals start anchoring to you and other people and the rest of the world out there. and my definition of success is not my spending quality time with my kids. My definition of success is my house bigger than Jimmy's, which is a much more common way to do it. Everything breaks down at that point. And so I think being selfish in a good way when you're setting those goals and trying to, the mindset that I try to think about is if I lived on a deserted island with my family and nobody could see how we lived, nobody could see anything that we bought. You can't, nobody could ever see our house, our cars, our clothes.

How would I choose to live? Even if money was no object. I had unlimited money, but nobody could ever see it. How would I choose to live? And for some people, the answer might be not that different than I live right now. They truly enjoy their material possessions. I think a lot of people, if you're honest with yourself in that situation, your desire for the bigger house, the faster car, even the fancier vacations would diminish if nobody else could see it. That's always been the case.

In a social media world, it's supernova relative to what it used to be because people don't post on. social media, they perform. It's all a performance. Everybody, I do. I post cute pictures of my kids. I don't post pictures of them melting down, which of course they do. So everyone is giving, here's, here's my best side. And when you strip away that, if you just pretend nobody's watching, how would you choose to live? I would want a nice house with a nice view. I wouldn't care if it was bigger than my neighbors or not, if nobody could see it. Yeah. So that is a, a rubric that you use for making decisions on how to spend. I try to think about it all the time. I remind myself of that almost every day too, because life is a competition in many ways.

And so the idea of it doesn't matter how much money I have, all that matters is that I have more than you. I think that's a very real thing. That's an unavoidable thing. Life is a competition. It doesn't matter how good of a podcaster you are. It matters that you're better than the next guy, right? So you can't avoid that.

We call that the performance-based identity. Yeah. It's when your identity is wrapped around not necessarily who you are, but what you do relative to... Relative to other people. Yeah. It's always going to be that. So it's almost a...

daily reminder of now a part of this is you don't get the social benefit that you think you will from having the biggest house on the block or whatever the fastest car because nobody's thinking about you as much as you are they're thinking about themselves and even if you do have the biggest house on the block by and large your neighbors are not saying look at look at michael's house that's like he's doing well for himself they're imagining themselves in that house they're just imagining themselves having that house and all the attention that they would receive of they live there. Everyone's thinking about themselves

more than they're thinking about you. Technically, it's called the spotlight effect. Yes. We miss the impact that how much time people spend thinking about themselves. Yeah. And we think we're under the spotlight,

but they're putting themselves under the spotlight. Right. Yeah. All the time. And then the judgment or the thinking about your big house

is actually, it kind of dissolves quickly and it can also leave a residue. And so the residue is a bitterness or jealousy or some sort of reflective feeling that they don't maybe want to be around you because of the way they feel because they feel smaller if your house is bigger.

And so it dissolves quickly, meaning they stop thinking about, wow, that's such a nice house. And then it backfires. Yeah. So a lot of times people think that they are harvesting admiration for their success or what what they're actually doing is fostering envy. And you don't want people to envy you. It is cool if people admire you. You do not want them to envy you.

That's not a good thing. You should never be proud of people envy you. So how do you buffer against that? Because now that you sold 10 million books and you've got more money than a ton more money than when we first met, how do you buffer against that? We live a pretty private life, which is maybe an irony because I do a lot of podcasts and videos and whatnot. But our personal life is very private. We have a very small core group of friends. My wife and I who have known for many, many years.

And I think a lot of wealthier people will make a big mistake when they become wealthy where they discard their old friends. And they say, now that I'm wealthy, I need wealthy. friends. You kind of up your soul. And that's almost always a mistake. And when you hear people who became very wealthy, but still hang out with their buddy from high school, like, that's, that's the right way to do it. That's how you do it. I was talking with a friend last night about a concept that he described as reverse charisma, which is when you meet somebody, you make them feel great about themselves. It's not that you have charisma and you're like, look how interesting I am. You make them feel interesting. You make them feel like they're the most interesting person in the

world. And one of the chapters I wrote in my most recent book is I titled, The Luckyer You Are, the nicer you should be. And this is from the art of spending. Yes. And I think that is kind of holds the idea of reverse charisma. The luckier you are, the nicer you should be. And the more, the wealthier you are, the more you need to think about, are you gaining admiration or are you just flexing on other people who you're making feel like shit and they're going to remember it and not like it? And I think nine times out of ten, the answer might be yes. Yeah. Money is an accelerant. And if you are self-absorbed, it accelerates that way of thinking. Yes. And if you are benevolent and kind and interested in others, it can accelerate that as well.

It's also an interesting window into people's personalities, because if you become very wealthy and you use that wealth to flex on other people, and a lot of them do that, a lot of times that is just a reflection of a weakness and insecurity that they had, that now that they have this supposed power with their wealth, now they can push down on the people who always felt like, you know, this. If you wake up every morning and you feel loved and happy and you feel fulfilled, you don't have the desire to go show off and flex in front of a bunch of strangers. So when you're doing that, it's usually a reflection of some other kind of scar or weakness. Okay. I want to go back to parenting for a minute. If we knew what you knew, as a parent,

how would we support our children to think about money, to think about saving and spending and earning, like how, if we knew what you knew, how would parents support their children? Two things. One, a lot of parents or a lot of people will ask me, how do you talk to your kids about money? And the answer for me, and I think this is true for most people, is you don't need to. They're already paying attention. You don't need to sit them down and to give them a lesson or a lecture. Every time that you go grocery shopping, they're paying attention to what you buy and what you don't buy. Every time you make a little innocent comment about what we can or can't afford or make a comment about somebody else's

money or somebody else's vacations, they're building a mental model in their head. And by the time they're probably 14 or 15, they have a very strong mental model of their head of what money is and how to think about it, even if you didn't say a word to them about it. And so I think part of that is the best, and I think the only thing you can do as a parent is lead by example. If you sit down your teenager and lecture them on the right thing to do, they're going to rebel against it anyways, but they're always paying attention to what you actually do. And so I think about that quite a bit. the other thing that comes up very often with money and kids, not just from wealthy people, but a lot of ordinary middle class people is like, how can I use money to help my kid without

spoiling them? And where a lot of parents go wrong on this innocently, it's very well-intentioned, but they want to withhold support from their children, whether those are children or adult children, to say, look, my kids need to learn the value of hard work. And it's very well-intentioned. But while those are your intention, what the child actually hears by and large is I'm not worthy of your support. And the parent does it with very good intentions. Learn some dignity. Learn the value of hard work. What the kid hears is, I'm just not worth it. Mom and dad could help me, but they don't because I don't deserve it. And you see a lot of broken relationships in higher net worth households because of that of the child growing up with a lack of self-esteem, specifically because the parents were trying. with good intentions to teach them the value of hard work.

And so I think you need, again, to lead by example, not by humiliation. Your thinking around money, earning, saving, spending is really clean. And you have obviously a bias toward psychology. I'd like to just spend a few minutes to shift the gaze on you. So that's Master of Craft. And now, as it just a bit of an exploration on mastery of self, you have it all buttoned up. Oh, no, no. Absolutely not.

Okay. I feel like my entire career has never been, I'm an expert, and let me impart this wisdom on you. It's always been, I find this topic fascinating, and I'm trying to pick apart my own life and figure out my own flaws. Yeah, you have a humility. You have a discerning ability about you that you think deeply and in frames and you think quickly.

You're likable. You have an openness to explore and you appreciate the nuances. I think you're highly conscientious. You know, I don't think you'll agree just on a whim. Like you're really scrubbing to understand to get down into something. I can't feel like that if you come from a neurotic place or where you are, where you're scared, where your traumas are impacting your daily rhythms. Like, I would like to understand that about you because you are an emblem for great success.

You have the clues that you can leave for other people, whether they want to be an author or an orator or a parent. Like, can you talk about how your traumas, like maybe even what some of them are and how they've impacted your successes? Let me give a few. And I think everybody has their own unique trauma. So these are my unique ones, but I know I'm not unique in general and having traumas. One, I didn't go to high school.

I was a competitive ski racer, and I did an independent study program that was basically non-existent. And when I was 16, they gave me a piece of paper that said diploma on it, but I did nothing for it. I basically stopped at eighth grade education, which at the time, I was a ski racer up in Lake Tahoe, and I skied six days a week, 10 months a year, all over the world is amazing. But then I became 18. I broke my back skiing, and that was the end of my ski racing career. And then it was, well, what now?

I basically have an eighth grade education. All my friends are going to college. I can barely add two-digit numbers. Like, what am I going to do now? Because now that I have an eighth grade education, it atrophic. because I spent four years just skiing around. And so I really had this moment of like, oh, my gosh, like what now? My parents were such free spirits, and I really admire them for this to let me.

Forget about high school. Just go have some fun skiing. They were, you know, but it left me in this moment when I was 18, 19, 20 years old of like I'm, I really just screwed it all up. And there's no, everyone else is so much smarter than me. And that was not false humility. they were because they had educations and I didn't and so that that was one aspect of it the other aspect was I had a very severe stutter when I was a kid and I really couldn't speak fluently like I am right now

until I was 30 just not not not that long ago and so that between those two things I think I had a very low self-esteem that but had this Jekyll and Hyde personality of one day I could say I'm I'm nobody and I'm going absolutely nowhere and I think think those thoughts were rational. And then the next day I could be like, I'll show them, watch this. And I think if you only have one of those sides, it's dangerous. If you can toggle between them, it's actually pretty productive. Because I had the humility of knowing that I was an idiot and that I could barely speak. And that was real. And the next day, I could be like, yeah, but it hurts me so bad that I'm going to sprint as fast as I can and work as hard as I can

to get out of this zone. But that was 10 years of false starts and fits and whatnot, and it was very difficult and whatnot. So a lot of it, I think if I look back in my life, in my adult life, a lot of it was running from fear and terror of those two aspects of my life. Thank you. Your early life was obviously a deep investment in your physical body,

your second act. You're definitely cognitive. The stitching between the two, is usually the emotional part of being a human. What is the most difficult emotion for you? What are the more prickly, scratchy, difficult emotions for you to work with? I think the concept of enough and contentment

is really important and difficult. That's a hard one for you? I think it's hard for everybody. I think everyone, by and large, what they want to chase with something like money is happiness. I just want to be happier. I want to have a happier life.

And if I have more money, I will be happier. what they tell themselves. And it's almost always, it's not that money cannot give you a better life. It absolutely can. But people chase the wrong emotion because happiness is always a fleeting emotion. Happiness is a 10 second emotion. It's temper. It's like humor. You hear a funny joke, you laugh for 10 seconds and then it's done. You don't laugh for 10 years. And so if you're chasing happiness, I think you're always going to be on a treadmill. The emotion that is phenomenal and a massive life upgrade that you should chase is contentment is getting to a point where you're like, I've got everything I need.

And if I have more, that's great. And I enjoy being productive. I enjoy working. But I've got what I need right now. And if the curtain fell tomorrow, I would say, this is fine. This is okay. Where are you on contentment? I think I've done better over the years.

But there's a lot of evidence that if you ask people, how much money would you need to be happy? I'm using that word happy. Almost everybody, no matter how much money they have, says twice what I need right now. Twice what I have right now. And if they have a million, they say two. If they have two, they say four. It never stops being 2x. And what's funny is that when I think about my own net worth and the level at which I

would be like, oh, I think that's my number. It's 2x what I have right now. And so it's a very human emotion to have that and to tell yourself, if I had that, everything would be fine. Now, there's a level at which your dividends and interest cover your annual burn. Like actual passive income, real passive income, covers what you spend. And at that point, you can very reasonably take a step back. I think I don't know if I'm happier now.

No, I'm not happier now than I was five years ago before my books came out. I'd say I have fewer bad days. I don't have more good days, but I probably have fewer bad days. Five years ago, I had days where I would just say, what am I doing with my career? How am I going to pull this off? I got two kids to feed and to raise and want them to be proud of me, and I'm not doing a good job of it. And I'm anxious and I'm not going to sleep tonight. And I'm going to go for a walk and say, like, what am I doing here?

I had a lot of those days, and I have much fewer of them now. But I don't have more days where I'm like, this is great. I had great days back then. I have great days now, but not more of them. And so, look, that's a lifestyle upgrade. Having fewer bad days is a lifestyle upgrade, but it's not more happy days. What is your heart one? I heard this quote from Jonas Salk, who's a guy who invented the polio vaccine, obviously, extremely accomplished.

And someone asked him, what his goal was? And he said, I want to be a good ancestor. And I thought, even if you're an ordinary person, not someone who saved humanity practically, that's a great goal. I want to be a good ancestor. Another quote that I love is the education of a child begins several generations before they're born. And so the idea that if I can be a good father for my kids, they will be good parents to their kids. And then it goes on down the line.

And you're a good ancestor. And is money a component of that? Sure, it could be. I have a lot of desire, and I think my wife and I will use money to give our kids a good life. Give them money. Help them buy houses, whatever it might be. But obviously there's so much more than that. If we can raise them to be good people.

I have a friend Jim O'Shaughnessy who said his goal as a parent was not to raise good kids. It was to raise good adults. That's the ultimate goal of how well you did as a parent is when your kids become adults, are they well balanced? And that's the reflection of how well you did. And so I think as the overarching, I want to be a good ancestor. Awesome. What a fun conversation. Super applied.

Frameworks are clear. Sparks a bunch of different ways to think about money, spending, making, saving. Is there anything that is left unsaid that is really important for you to want to share with this community? One thing, I think one of the most powerful ideas in psychology is called the end of history illusion, which means that you and I and everybody, we're very cognizant of how much we changed over the the last 10 or 20 years. I'm a utterly different person now than it was 20 years ago. But when we try to forecast 10 or 20 years from now, we think we'll be the exact same person. And we're always mistaken. You and I and everyone listening will be very different than they are 10

years from now. Different goals, different outlooks, different philosophies, maybe different political views, different financial views, different career goals. And it's hard to contextualize that today. We're all ignorant of that today. And I think it's almost impossible to forecast who we're going to be. And if you've had long-term friends or siblings that you've known for your whole life, you see this. I'm like, yeah, yeah, you're still my friend, but man, you are a different person than you are 20 years ago. I still like you. I still enjoy hanging out with you, but man, remember when you used to believe X, Y, and Z? And I was talking to a friend the other day about how my political views have evolved over the last 10 years. They've evolved a lot. And they'll probably evolve

over the next 10 years. And I think that's unavoidable. So it's always tempting to say that my view of the world right now is the right one. And the humility that comes with the idea that 10 years from now, I'm going to look at what I believe today and say I was either just factually wrong or I wasn't contextualizing it right or I learned and grew and evolved in a way that makes my beliefs today invalid is a humble way to go about it, but it's unavoidably true. Take us home. Why do you want people to read the art of spending? I think if it gets you to look in the mirror more and try to understand your life. There's nothing in the book where I say, here's how you should spend your money. There's no direct advice. A lot of people don't like that.

They want a self-help book. And this is not that. I hope it gets you thinking more about you and your family's life. And then you can use some of those insights to figure it out for yourself, but I'm not going to do it for you because I can't. Best practice to do with your spouse. Best three questions to do with your spouse. Respect them for their flaws because their flaws are probably reflections of their past that they had no control over. And that's true for me and you and them. There's a good quote I love from a historian. His name was B.H. Liddell Hart.

And he said, gain enough appreciation of history where you can respect each other for their delusions. I want to respect you for your delusions. And I hope you respect me for mine because we all have them. That is awesome. You're a quote machine. I'll give one back to you. More money, more problems, Biggie Smalls.

guy. Yeah. Do you like that Frank? Yes, I think I think it's very true and it's impossible to understand that. And if you are a relatively poor person and you hear that, you're probably going to say that might be true, but let me find out for myself. But once you experience it, you're like, oh, no, it's true. It's there. Morgan, thank you for your time, your expertise, your commitment to write with great clarity, telling stories that pull me in as a page Turner. And thank you for just the joy of this conversation as well. This has been fun. Thanks for having me back. Next time on Finding Mastery, it's another Ask Me Anything episode.

You submitted thoughtful questions about performance, relationships, purpose, and navigating the complexities of being human. And with the help of Friend of Finding Mastery and Momentous CEO, Jeff Byers, Mike sits down to answer them. From managing self-doubt and building confidence to leading well and staying grounded under pressure, this conversation is shaped entirely by you. If you're curious to hear your questions explored, then join us Wednesday, March 4th at 9 a.m. Pacific only on Finding Mastery. All right. Thank you so much for diving into another episode of Finding Mastery with us.

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