Open Book with Anthony Scaramucci - The Great Money Psych: Wealth, Greed, and Happiness with Morgan Housel

Episode Date: April 17, 2023

In today’s episode, Anthony talks with award-winning author, Morgan Housel. Housel’s book The Psychology of Money has sold over 3 million copies worldwide and has been translated into 53 languages. They get to the root of what our relationship with money can tell us about ourselves, discussing the real definition of wealth, approaches to investing, saving and more. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Visit BetMGM Casino and check out the newest exclusive. The Price is Right Fortune Pick. BetMGM and GameSense remind you to play responsibly. 19 plus to wager. Ontario only. Please play responsibly. If you have questions or concerns about your gambling or someone close to you, please contact connects Ontario at 1-866-531-2,600 to speak to an advisor,

free of charge. BetMGM operates pursuant to an operating agreement with Eye Gaming, Ontario. I'm Anthony Scaramucci and welcome. to open book, where I talk with some of the most interesting and brilliant minds in our world today. In this show, I'll bring on guests in business, politics, entertainment, and more to go deep into a piece of their work, whether it's a highly anticipated book, an in-depth feature story, or an opinion piece that has captured my attention. We'll dig into why it matters to you and how their work is shaping our future. Money, money, money. We all need it and most of us want it,

but why? What's caused our obsession and what can our relationship with money tell us about ourselves and how we operate? My guest this week is Morgan Hassel. He wrote the award-winning book, The Psychology of Money. It's one of the best finance books out there, and Morgan answers all those questions and more on today's show. Your book is incredible, by the way. I think that you have a groundbreaking book. It's important to understand this relationship that we all have with money. I was born in 1964, so I'm going to totally date myself. I wasn't alive during the Kennedy assassination, although I would make me really old. I grew up in a blue collar family. We had a terrible relationship with money because we didn't have any money. And so there was always

fights going on in the house and there was always a tremendous amount of anxiety. So by anybody's stretch, and this probably sounds like being braggadocious, I'm not, but by anybody's stress, if you looked at my bank account, you'd be like, okay, the dude has a little bit of money. He's been on Wall Street 35 years. But yet, when you start out broke, Morgan, you always feel that money anxiety. So you're shaking your head. So my first question to you is why is that? Well, first, thanks for having me, Anthony. And this is, it's an honor to speak with you again. Why is that? I think it's true that everybody is a product of their earliest years, particularly, I'd say, your teens and 20s. You're like young, impressionable years where you're learning how

the world works, but you're smart enough to actually start connecting the dots. When you're five years old, you can't really connect the dots. When you're 15, you can start to figure out, oh, this is how the world works. And I think the scars that those leave, whether they are good, positive scars, negative scars, stick with people forever. There's this quote that I frowned. It's from the New York Times in the late 1920s, the roaring 20s leading up to the Great Depression. And the quote was, the more you are snubbed when you are poor, the more you want to show off when you are rich. And I think that's really true. That was true in 1928 or whatever when they wrote that. And it's true today. Whether it's not you are showing off or you are hiding out, the idea

that people are just being shaped by their past is so true. It's always been true. I think it always will be true. I am shaped by my past. You just very eloquently explained how you are. And what's important, though, is I commend you for acknowledging that because most people don't. Most people view finance, like they're dealing with physics. Like, it's just math and equations and data. And if you have the data and if you know the equations, you get the answer. And then we're all set. We can go home. It's just not how it works. It's so emotional and it produces anxiety. And it's so much more than the spreadsheets that we often view it in. So I think, just the acknowledgement alone, like, forget the explanation, because that's a much more harder thing,

but the acknowledgement alone is a step in the right direction. And everyone should do that, because every single person in a different way is shaped by their past. All right, so let's flip the switch, though. Let's go to the other extreme. It's 180 degrees an antipode away from me. Somebody that grows up entitled, always having money around. How does that affect? There's this great quote that I really like from Will Smith, the actor. And this is, this is in his biography, which came out, I don't know, a year or two ago. And he says, when he was poor and depressed, he had some hope because he could say, if only I could get rich, then all my problems would go away. But then when he was rich and depressed, he had no hope. He could no longer say, if only I had

more money, things would all be okay. And it took away his sense of like hoping and dreaming about the future. When he got rich, it's this irony that like, of course, you don't feel that bad for him, but it's like, that's an interesting thing that if you have, if money is just like oxygen to you, it's just, you need it, but it's always there. It's always in abundance. It's always there. Then it's hard for you to imagine a world in which that is going to increase your happiness. And I think, look, the idea that rich people are unhappy or not happier than poor people, I think is generally debunk. I think in general, they tend to be more satisfied with life, even if they're not necessarily happier. But the idea that it can take away a sense of hope of dreaming about the future is real. And

if you grow up where money is just, you never have to think about it, I think that can be a detriment to people. To me, the most fascinating real world example of this, the family of this that comes to mind are the Vanderbilt's. The Vanderbilt family is one of the most fascinating families in the history of money and it has very little to do with the fact that how much money they made and it has to do with how they thought about money and how they spent it. Most of the mega wealthy families like the Rockefellers and the Morgans and the Carnegie's gave most of their money away to philanthropy. The Vanderbilt's, with rare exceptions like Vanderbilt University, didn't give much away. They basically put the equivalent of like $300 billion in a pile and told their kids to have a blast with it. That's effectively

what they did. And what happened after that were three generations of Vanderbilt's for whom money was limitless. They had, like I said, the equivalent of $300 billion. And it was just a generational pissing contest to see who could build the largest house, who could spend the most money, who could throw the most lavish balls. And if you read the history of these three generations, every single one of them, without a single exception, is miserable. Every single one of them is miserable. They have no purpose. They have no skills. They have nothing that they're striving for other than I am a Vanderbilt who inherited a lot of money and I'm going to spend it. The most fascinating part about the story, though, is that the first

Vanderbilt heir who did not inherit any money is Anderson Cooper. Anderson Cooper is the first Vanderbilt relative who didn't get a trust fund. And I think he is without a doubt the most successful Vanderbilt air in 200 years and probably the happiest. And he's talked about this. That the reason he's successful in his own way and happier than his relatives is because he was the first relative in his family and 200 years who had to go make a name for himself, who had to earn his own money. And so I think that's easy to overlook as well. You see that I mean, this is the reason why your book is so successful because your insight into this stuff is fascinating. I'll tell you this quick story. I want to get your reaction. into it. I'm 23. I am closing titles for a real estate attorney out in Southampton. I'm in my first year at Harvard Law School, the summer intermission into my second year. I took that job because it was very high paying. You were getting $75 to close a mortgage. You were getting tips. I mean, my buddies were on Wall Street making $1,500 a week, which was a lot of money back then. I was making $3,000 in Southampton, driving around at a 1986 chocolate brown, Crown Victoria, LTD Ford.

I'm just setting the scene for you. I love that. So I'm a Guido out in the Hamptons, about to get a Harvard Law degree, but I'm closing titles. I'm with the real estate attorney who's living in a fancy pants house, at least I thought it was based on where I grew up in Southampton. He's got a swimming pool. I'm behind the house at the swimming pool, drinking a beer with him, a Budweiser. He says to me, you know, I grew up poor.

I got a little bit of money now. All I want to do is cook some pasta, eat the pasta, watch television, and go to sleep. I thought the money was going to solve all my problems. The truth of the matter is, I have still very many of the same problems. It haven't solved shit. And you know what I said to him, Morgan? I said, ah, that's because you have money. I don't have any money. I'm hustling. I've got school debt up my ass. I don't have any money. But once I get the money, it's going to solve all my problems. I don't know what the hell you're talking about. Now, you know that this man, the late, great, and now deceased Dick Pelican, was a great guy, by the way, and a good mentor. You know he was right. You know he was right. And I know he's right. Why, though? Why? Because I went from poor to not being poor. Shouldn't that be enough? Well, let me answer that by asking you a question. Do you think you are happier? And let's focus on that word happier. Are you, Anthony, are you happier today than you were when you were driving around the chocolate brown car in the Hamptons making $3,000 a week? Are you happier today? Well, remember, so we have to be somewhat philosophical. I had my youth at that time.

I had my boundless energy. I still very energetic guy, but I had a future ahead of me, which is different from my future today at age 59, right? I mean, I was up and coming on my way going. So yes, I was very, very happy and very idealistic about my life. I do think I'm more secure financially and I have less anxiety today than I did 30 or 40 years ago. And so in some ways, I am happier. but I want to be relativistic. I'm happier with money as opposed to not having money, but it hasn't cured the ills, Morgan. Whatever the ills are, whatever Marcus Aurelius would say about the human condition, our lives, our trials and tribulations, whether you're rich or poor, whether you're a Vanderbilt or a Doe, a John Doe, you're going to experience tragedy in your

life, the death of loved ones, your own death, which I see as a tragedy. Sophocles maybe wouldn't agree with me, but I see it as a tragedy. And so therefore, you can't assess. escape rich or poor, we all have the same conclusion to our story and that's death. So what is it? What is the germ of what I'm describing? It's so easy and so common like you mentioned to imagine a world in which you have more money and then your problems go away. And there are some problems in which money will help prevent. Of course. But there's so many that it makes no difference whatsoever. And the things that money has no influence over are some of the most important things that are going to give you happiness or unhappiness in your life. So rich people, relative to poor people, might still argue with their spouse.

That might not make you unhappy. They might still be disappointed or worried about their children. That'll make you unhappy. They're still susceptible to cancer and heart disease. That'll make you unhappy. All these things in which, no matter how much money you have makes no difference whatsoever are major drivers of your happiness or unhappiness in life. So of course, to take this to the extreme, would you rather be a billionaire who has metastatic cancer or a broke person who's healthy as a horse? It's such an easy question to answer. I'm not going to name the names of these people, but I have a friend that's probably worth a half a billion dollars.

And during COVID, he was suicidal and he hung himself. Now, the good news is one of his family members saw him hanging in the rafters of his garage and got the UPS guy that cut him down and he went into therapy and thank God he's still with us. He's a lovely man. But this guy is worth a fortune, has yachts and homes all over the world. And so it's like, okay, what the hell is that all about? If I had that kind of money, I'd be going for colonoscopies every five minutes, try to stay alive longer.

I'd be taking the statins more in. My point is, I think some of it is our genetic makeup, some of it is our feelings about life, maybe the way we grew up, the traumas that we've experienced. But what I love about your book is that anybody can pick up your book. Your book, if you're O positive, you're like the universal donor. You can give blood to anybody. Your book is like the O positive book about money. I don't think any person can pick up the book and not see themselves.

in the book, or not reference themselves or have the aha or gotcha moment and say, okay, I have to turn the page and hear what Morgan's going to set. How did you get that? How did you get that clairvoyance? How did you get, how did you get that kismet, that touch? Well, thanks again for those kind words. I don't know if it was anything that intentional other than, I think I've had a unique job for my whole career because I'm not a journalist. I'm not covering a beat and calling up sources like a journalist. And I'm not a portfolio manager. I'm not a financial advisor. I've always just consider myself someone who just kind of sits back and wants to observe what's going on and then gets to write about it. And I've always been really interested not in the question of what stock should

I buy, what's the economy going to do, what's GDP going to do next quarter? That's never interest me in the slightest. I've always been really interested in the question of like, what's going on inside people's heads when they're thinking about risk and greed or reward. That's always been interesting to me. And I think if you just take that perspective and you don't have the career incentives and biases of a journalist on one hand or the portfolio manager on the other, then you can just try to just just sit back and watch and try to piece the things together. That's always been really interesting to me. And I think another thing that I really found helpful for my career was, if you only view money through the lens of finance and economics, you're missing 99% of it. Money and investing and

personal finance, all that stuff is just a study of how people behave with money. It's not the numbers of money. It's how people behave. And behavior is such a broad topic that applies to everything. And behavior about how people think about greed and fear, you can learn about that through the lens of politics, sociology, biology, chemistry, history, military, like all of these topics that have nothing to do with money teach you about behavior. And the most important part of money is behavior. So once you start viewing and learning about money through the lens of other fields, A, it's more fun. It's more interesting. And it gets you closer to the truth of what is actually going on and how people make decisions with their money. One example of this that I came to recently that is very similar to what you're talking about in terms of

having a lot of money, but you still don't feel like it's all there. I recently hung out for a little bit with an NBA player, Harrison Barnes, who now plays to the Sacramento Kings, but he used to play for Golden State Warriors and won a championship with the Warriors. We were talking about what it was like to win the NBA championships, the pinnacle of any professional athletes' career to win the championships of your career. And he said, look, that evening, it was great. Champagne, bubbly, everyone's having everyone's screaming, everyone's screaming, having a good time. Amazing. He woke up the next morning and walked outside, and he realized that the rest of the world had moved on, that the rest of the world, that he walked outside and there are people commuting to their jobs. Everyone was just walking the

like nothing else had happened and the world moved on. And he realized that it was great. It's the pinnacle of his career. He's proud, et cetera, et cetera. But everyone else just kind of moved on from it. And then there was not much else to talk about. And then the next morning, it was like, all right, back to training for next year. I think that analogy is really true for a lot of people with money as well. That if they have a big windfall, they sell their company, they get a big bonus, whatever it is. It's cool for like a day. It's cool for a day. And then you wake up the next morning and you're like, oh, I have a disagree with my spouse. I'm worried about my children. What's this lump in my throat? It's such, you have all, like, the world goes on and all these other worries that have nothing to that money can't impact are still

there with you the next day. That's, that's a big part of this. We're in total agreement. We're in this age of great uncertainty. Great uncertainty. Does that affect the youth the way they think about money? I would take some quibble with that statement. I don't think we're in the age of great uncertainty. I think it's always been uncertainty. And it always feels like the future in front of us is uncertain. But the reason that is is because the past makes sense in hindsight. So we look back. We're like, oh, of course the market did this last year. Of course, interest rates went up. Of course, inflation is high. That's 100% hindsight. And it always looks more uncertain than it is in the future. I think what changes in financial markets is not the level of uncertainty. It's people's

ignorance of the topic of uncertainty. And there are periods like 2007, maybe 2021, where it feels like uncertainty is low. But all that is is just people are ignorant of potential risks that are staring at you down the pike. That's really all it is. So I think it feels very uncertain. But the world's not more uncertain today than it was five or ten years ago. I think people are just more aware of risks than they were, which is a good thing. Being cognizant of risk is a great thing. And we're closer to reality and making better financial decisions as a whole today than we were one year ago. That's what the feeling of more uncertainty is. I'm a young guy. I have no money. What am I going to get at a Morgan household's book? I want money, though. I would say it's the same thing that an old rich guy would get at,

which is hopefully just being more introspective about who you are, what you want out of life, and what money can and cannot do for you. And whether you are 19 and broke or 92 in a billionaire, I think those lessons and that introspection can be just as powerful and helpful. There is no advice in the book. There's not a single place I don't think in the book where I say, you should do X. If you want to be happy with your money, you need to do Y. There's none of that in there. I purposely tried to make it no advice, no recommendations. But hopefully it helps people, regardless of how old or rich you are, to step back and say, like, oh, how do I think about for my personal life, how do I think about risk and greed? Are there moments when I've been shaped by my past? Do I discount how powerful compounding can be? Am I being too impatient? So it's less about giving people advice and like, what can you get out of it? And more like, can I just nudge you in a direction where you start thinking about yourself and what you want individually versus me like pretending that I know who you are and giving you advice? So that's what I hope it would be for anyone is just a greater sense of introspection about what you want in life. Let's talk about Buffett for a second.

above his net worth was accumulated after age 50, 97% after age 65. So there's still hope for me, which is why I'll continue to take the statins. This guy was qualifying for Social Security and he made himself 40, 50, 60 plus billion dollars. What is that telling you? What's the secret there? Here's what's interesting. Actually, when I wrote that in the book, that 99% of his net worth came after his 50th birthday, 97% came after his 60th birthday, I actually understated that substantially because that does not include the roughly 80 billion dollars that he's given. given away to charity. If you add that back into his net worth, then 99.9.9% of his net worth came after his 60th birthday. It's staggering where all the money came from. And the takeaway from that

is that you can really piece together this hypothetical story of saying, let's say Warren Buffett like a normal person might, retired at age 60, like a normal person white. He was worth a couple hundred million dollars at that point. Let's say he just retired to Florida and played golf. In that situation, you would have never heard of him. He never would have become a household name. He never would accumulated literally 0.01% of what he actually did. So then you can easily piece together if you're trying to answer the question, how did Warren Buffett do it? A, you can say, well, it's because he's a great investor. And that's a good answer. That can be, that's part of the answer, of course. But the real secret is that he's been a good investor for 80 years, more than 80

years at this point. That's 100% of, that's where the money came from. It's not his annual returns. It's his endurance and longevity. Is where all the money came from. And I use the example of the book of a hedge fund manager named Jim Simons, whose average annual returns are are like three times higher than Warren Buffett's. His average annual returns of like 66% per year for more than 20 years, just like in a league of his own for returns. His net worth is like a half or less of what Warren Buffett's is because he has not been investing as long as Buffett.

So the takeaway for the average ordinary non-billionaire like myself listening to this is most investors want to answer the question, how can I earn higher returns? It seems like the obvious question that you want to answer as an investor. And most of the time, that's actually not the most important question. answer. The most important question that you want to answer are, what are the best returns that I can sustain for the longest period of time, which in any given year are, tend to be not the best returns that you can earn in any given year. I learned recently that Pimco, the bond trading firm, they used to have this phrase 20 or 30 years ago called strategic mediocrity. And what that meant is that in any given

year, they were probably not going to be far outside of the top half. They're never going to be top 5%, 10%. They're just never going to happen. But if you looked over a 20 year period, they would always be in the top 5%. Even if in any given year, they were not that exceptional whatsoever. And I think that's really the case. If you can just earn average returns for an above average period of time, your top 5% in investors. If you can earn index fund returns for 30 years, you will be in the top 5% of all investors at the end of your career. It's just not intuitive to think that because most people are trying to answer the question, how can I earn higher returns? But time is where all of the wealth generation comes from, not just for ordinary people, but someone like Buffett as well.

I think these are all brilliant statements. This is why I love speaking with you. My old boss once said to me that everybody is a long-term investor until they have short-term losses. The minute they have short-term losses, they set their hair on fire, they run around in a circle, they call their financial advisor, they call you with the collaborative fund and they start yelling. Why?

Why can't people see through the near term? What is the anxiety? I think even if people say I'm a long-term thinker, I'm a long-term investor, the long-term is just a collection of short runs. And so even if you're like, oh, I'm investing for the next 20 years. Well, the next 20 years is 21 year periods, each of which has to be experienced and endured and you have to survive it and whatnot. So saying I'm a long-term investor is kind of like pointing to the top of Mount Everest and saying that's where I'm going. You're like, okay, that's great. But now you have to go do it. Now's the hard part. You have to figure out like what's your strategy for actually getting there. For a lot of people, it's two things that prevents them from actually doing that. One is that people have a false view of what the long-term should mean. Like most investors say they're long-term investors. But then if you ask them, what does that mean? What's the definition of long term? A lot of investors will tell you one year is the long term. And by the way, like, what is the IRS's definition of a long term capital gain? It's one year. For a lot of investors, that is the long time horizon in front of

them is 365 days, which is crazy in the history of investing where a pretty good definition of what long term means, particularly in the stock market, is five or 10 years, at least, not 20 years. That's what the long term is. So I think a lot of people just have a false view of what the long term is. The other thing that gets in people's way is that even if you are a long-term investor, that does not necessarily mean that your spouses or if you're a financial advisor that your clients are, if you're a fund manager that your investors are. And so you have to have everyone on board at the same time. I think there are a lot of market strategists, financial advisors, fund managers, who themselves know in their hearts what's the right thing to do. Market fell 10%. It's not that

big a deal. We're long-term investors. But they can't run a business doing that. They have to kind of meet the emotional needs and faults, I would say, of their clients, of their employees. investors, of their spouses, whatever it might be, everyone has to be on board at the same time. The last thing I would say, this is probably actually the most important, is that if I were to sit here and hypothetically say, how would you feel if the stock market were 30% lower than it is today? Most people in that situation would say, oh, that's great. That'd be a buying opportunity. Stocks would be cheap. Because in that world, what you do is you imagine a world where everything is the same as it is today except stock prices, which are 30% cheaper. And in that imaginary

world, it seems like an opportunity. But the reason stocks might fall 30% is because there might be a terrorist attack or a pandemic or a war or something that is terrible going on. And in that world, with that context of all these big macro risks, a lot of people realize that they don't have the risk tolerance that they thought they might. I was kind of like this, not in the stock market, but I remember in March of 2020, peak COVID lockdown, peak COVID panic, I woke up every morning with a sense of dread, with this, oh shit, sense of like, what does the future look like? What does the next week look like? Am I going to survive the next month? It's so easy to underestimate how you're actually going to feel and what your risk tolerance is when you are in the heat of the moment.

Just like the soldiers that feel like they have tons of bravado and like macho culture when they're in training and then they get into battle and someone shoots at them and everything changes. You can't understand what that's like until you're in the trenches, so to speak. Let's talk about you for a second. I mean, these are brilliant insights. Let's talk about you. You're mostly a passive investor morgue. Do you have any regrets or what's been your biggest investment mistake?

I have no regrets. It doesn't mean that I've done everything right. It's the opposite of that. I've made a lot of investing mistakes. Early on, you know, I started investing, I bought my first stock when I was 18, something like that. And early on, I was, I was a day trader of penny stocks as many, as many young investors are. That didn't work for me. So I moved on. Then I started holding stocks for a week thinking that was the long term and that didn't work out so well for me. And I just kind of progressed through that. And I was a stock picker. I was a value investor. And then I eventually, you know, kind of settled out where I am right now where the huge majority of the,

the equities that I own are index funds. So it's not that, it's not that I have no regrets, but I made plenty of mistakes. And I would also, I have no idea what it's going to be, but I guarantee that if you and I have this conversation 10 years from now, I will look back at Morgan in January of 2023 and say, oh, he was not thinking about X, Y, and Z. And I guarantee you that I will be investing my money, spending my money, saving my money differently in 10 years. So not only do I not regret the mistakes I made in the past, but I'm very aware that I'm making mistakes today that I'm not even cognizant of. But some of the biggest, you know, I don't know if there are mistakes, but I wish I could go back to myself in my early 20s, just talking about financial matters,

and just say to myself, things are going to be okay. I was so worried. I graduated college in 2008, terrible time to enter the workforce. And I was always just so worried about everything, about the economy, about being laid off, about my career prospects, about the stock market, about inflation, about interest rates. And I wish I would just, I could go back in time and say, things are going to be okay. It's not that things are going to be easy. It's not that you're going to make every right decision. A lot of times things are going to be very difficult for you, young Morgan. But it's okay. As long as you, if you can survive and endure, things are going to be okay. That's the only thing that I feel like when I look back, I wasted a lot of time worrying.

But then sometimes I'm like, maybe the worry is what got me motivated to try to go out and solve those problems. So maybe it was actually okay. But that's kind of the only thing that I look back and wish it had turned differently, even if I could sit here for three hours and talk about all the financial mistakes that I made. You write a lot about enough. When is it enough? Never going to be enough for me. Got the pit in my stomach and I got the financial anxiety and I'm in a negative subsidy of my parents and I got to make sure everybody's taking care. Never going to be enough for me. That's probably a tragic thing for me to say, but I'm just being honest with you. So what is it enough? It's different for everyone. I don't want to pretend like I'm some expert on this because my wife and I battle with this very often too.

I think the concept of enough is the most important concept and idea that exists in all of finance, period. important than being satisfied with what you have and having some sense of enough. And it's the hardest thing to, it's the hardest financial skill. Getting the goalpost to stop moving is the hardest financial skill that exists. My wife and I deal with this, I think there's a couple of things. I think my investing strategy of indexing is some concept of enough because I have friends who are portfolio managers who I'm very confident would earn higher annual returns that I can get from Vanguard. I'm confident that I'm not one of the passive investors who says nobody can beat the market. Don't even try. And that's not me at all. But to

To me, if I can earn a passive, mediocre return, but do it for a long period of time, that's enough for me. So I think that's one version of enough. On the spending side, on the lifestyle side, I think the acknowledgement that not everyone agrees with me on this, but the acknowledgement that nobody cares about your stuff as much as you do. Nobody cares about your car or your house or your clothes or your jewelry as much as you do. If you really acknowledge that, and again, not everyone agrees to that, but to me, when I acknowledge that and the truth of that, my aspiration for like putting out the peacock feathers and showing everyone, hey, look at me, I'm successful. Look at my car. Look at my house. Diminishes greatly. And that really enhances the

idea of enough of like what I personally want out of life is like I want to earn the respect and enjoy the happiness of my wife, my children, my parents. And like not much else. That's 90% of what I want out of life is earning the respect and enjoying the happiness from those like four people. And showing off to strangers that I've made it in the world ranks very low on that list. That really helps the concept of enough. Is that because you didn't feel left out as a kid? That's one of your theories, right? So people that feel left out, have a tendency to go crazy in that direction? I think that's probably right. I don't know if I've ever, I've ever really thought about that. But now that you say it, it's, it's yeah. I mean, I always have and still do have a wonderful relationship with my parents

and my wife. It's like I'm not, I'm not yearned for that. That love has always been there. So maybe my desire to show off to try to earn that love with money by showing off. off house, you know, hey, I'm successful. Look at me. It's diminished in ways that it's not for other people. So I've never thought about that. But when you bring it up, it's like, that's a good point. And I think it highlights that everyone is different in this and shaped by their own past and backgrounds. The other part that's important here is once you have some idea of material enough, then you're like, okay, what do I really want out of money? What can I get out of money at all? And for me, it's just controlling your time. It's, look, I want more money, not so that I can buy a fancier car or a bigger house. I want more money so that I can just have a greater sense. of waking up every day and being like, I can do whatever I want today, anything I want to do today. You want the FU money. I get that. You know, it's funny. He said I was laughing to myself because I'm like a Long Island Guido, because let me just explain what that is. Okay, so there's a little bit of Nouveau Rish in me, right? So when I was a kid, I had a 79 Berlinetta Camaro. I was wearing my gold chains, my hair was blown back. I had a power booster in the car. And I said, someday I'm going to get rich,

I'm going to buy myself a Lamborghini. Someday I'm going to do that. And it wasn't to shell off. into fucking, you know, I got to show you that I can buy a Lamborghini. It was about me loving cars. I'm like, when I want a Lamborghini some day, I'm going to go down West Shore Road in my town at 110 miles an hour, hopefully not get stopped by a cop. That's something to do because I'm a Long Island Guido. Is that a personality defect? Is that what is that? The first thing that comes to mind when you said that is that that was a product of your era, not necessarily your personality. I think when I think about the 80s and 90s. Oh, you're an 80s? I mean, this is like age discrimination. I'm like, age discrimination. I'm like,

I think it's really true. I think the 80s and 80s really personal. I think the 80s and 90s really persona. I think the 80s and the 90s were the peak materialism for everybody, for everybody. I think the financial crisis of 2008 diminished that a lot. The first time in a generation or two, that very rich people lost a lot of money. And the materialism from that, particularly if you go back to 2010, 11, 12, materialism in general, I think really plunged. Maybe it's come back. But I think what you just described is certainly part of part of your background, but part generation. This is Guido, Ronald Reagan, excess consumption, watching top guns 72 times. That's what it is, right? So you don't think it's a personality defect that I'm trying

to show off that I have a Lamborghini? You just think it's a Guido defect, or what is it? The Guido defect, I love it. I think if I were thinking about this, I would say it's a third your generation, a third your age in which a huge majority, including myself of young men in their teens and 20s, wanted a Lamborghini, including myself. And a third product of your own background. I think that's, I think that's probably what it is. And everybody is shaped by all three of those things, including myself. Your generation, your age, and your just individual personality has a huge impact on how you think of us. After I read your book, though, I was like a little sheepish to pull the the car out for a little while. Maybe 10 minutes. But I mean, I was ready to go, but not ready.

You know what I mean? I love fancy cars as much as anyone else. They're amazing. To me, like, the distinguishment is like, what do you want out of the fancy car? Do you want to show other people that you're successful? Or do you just love the thrill of acceleration and like the beauty of the lines of a Lamborghini? That's a different point. It's a really good question. And so it's the art of the Lamborghini. But I also think it's the actualization. You know, when you're a kid and you're idealizing your life, and maybe this is very materialistic of which I perhaps am a product of my life experience in my environment. It was like an actualization issue. Okay, I can turn a dream of mine into a I'm going to go ahead and do that before my demands.

That makes sense. And I think it's great because that's like the internal scorecard. You wanted the Lamborghini for yourself. Not to show everyone else. You wanted it for you. Morgan, trust me, I'm not competing with it. If you look at my life, I have an I don't give a shit mentality. Look at what I've done.

Worked in the White House, got fired, don't give a shit. I've done several reality television shows. You may judge me for that. Don't give a shit. I'm living my life exactly the way I want to live it. And I'm not comparing it to anybody else's life. God bless them. And I want you to be.

majorly successful. I tell my kids, I got five of them, I can only give you two things. Number one, celebrate the successes of your friends. Because if you do that, you'll have friends for the rest of your life. If you're a greedy or jealous or envious SOB, you're really going to be miserable your whole life. Who cares? I want you to make a billion dollars and invite me to smoke a cigar in your hot tub at your mega mansion. I love it. Okay. And that's number one. The second thing I tell my kids, you're only visiting. You know, relax. None of us are getting out of here alive. And so you got to do something you really love. But I love about you, it's obvious from your writing that you've found something that you really love because you're in tune with it. And it speaks to your intuition about people and about the psychology of money.

And so those are the only two things you can give you kids. The money, ask Anderson Cooper, it dements you probably. You could end up demented if you have too much money. All right. So let's talk about bubbles. I know we only have a few minutes to go here, but I want to talk about them. You said there's a big difference between an expert whose talent should be celebrated and a guru who's, bad ideas should never be questioned. What did you mean by that statement? Number one. And then number two,

is it easy to tell the difference? In real time, I don't think it's easy to tell the difference. I think it's very easy to be blinded by that in real time. And in hindsight, it becomes much more obvious. And I think that's one of the markers of a bubble that are usually only known in hindsight again, is that you look back and during bubbles, you have a lot of people who are considered to be gurus earned or not. And it wasn't that we were celebrating their good ideas. It's that any word that came out of their mouth, whether it was crazy or bonkers or wrong, was taken as established fact. You see this in the 1990s. You see it in the last two years, whether there's tech stops or crypto, whatever it was, if you have someone who is wealthy,

the knee-jerk reaction, association between wealth and wisdom becomes so powerful people that that wealthy person can say whatever they want about any topic and people to sit there and nod their heads because there is such an association between wealth and wisdom. People think there's an association between wealth and wisdom. One thing I've really changed my mind about, I guess, and become more fervent in is the idea that there are no gurus in any field. There are smart people. There are experienced people who have good ideas. But there's nobody in any field who is so smart and has so much wisdom that we should just accept everything that they say as established fact. And you always see, too, in bubbles that

the people who get the wealthiest, the fastest are the ones who are the most eager to share their opinions. And of course, in the social media age, the opinions that get the most traction and engagement are the crazy opinions, the ones that are just designed to needle people or be provocative. That's dangerous. When you mix the association between wealth and wisdom with social media, ability to just like dump kerosene on the craziest ideas. It's a dangerous thing. I think in hindsight, as we look at 2020, 2021, if we're calling it the tech bubble, if it's safe to call it that, you saw a lot of that. You saw a lot of people who are very wealthy, putting out crazy opinions and millions of people nodding their heads along with it only because that person had a lot of money.

Let's go over a couple of names. I'm going to fire out a couple of names. This is like sort of a lightning round. Okay, I want you to pick apart some different characters and some of them fit the description that you just gave. Benjamin Graham. A genius of his era. If he was alive today, he would be an old stodgy professor who nobody paid attention to. But in his day, he was saying things that were so provocative and so unique and original that he justifiably has earned his statue in the financial sphere. Sam Bankman Fried. On par with Bernie Madoff, but he has done such a good job convincing people otherwise that it's astounding. I'm not unique in saying this. A huge portion of the media still treats him as a savant, a genius in a way that Madoff never got. Of course,

the very moment the Madoff story came out, it was criminal, jail, get out of here, your scum of the earth. And even as more information comes out about SBF, about what was going on, there is still this idea that he, I think, very intentionally cultivated of him being just an eccentric genius who may have made a couple of mistakes. It's astounding to watch. All right. Somebody that I didn't know about, I have to confess this to you. until I read your book, Rick Gurren. Rick Gurren, if you go back to the 1970s, there was an investing trio. It was Warren Buffett, Charlie Munger, and Rick Gurren.

And everyone today knows who Warren Buffett and Charlie Munger are, but Rick Gurran, who was part of that trio, just as big a part of that trio in the 70s, kind of disappeared. He was still a fund manager, but he was not the household name that Buffett and Munger became. And years ago, there was an investor who asked Warren Buffett. He said, hey, whatever happened to Rick Gurren? And Buffett told the story. He said, what happened to Rick Gurren is he was very heavily leveraged. And during the bear markets in the 1970s, he effectively got wiped out. He got margin called.

And Buffett had this incredible response. He said, Charlie Munger and I always knew that we would be rich. So we were not in a hurry. We were not in a hurry at all to become rich. We knew it was inevitable. He said Rick Gurren was just as smart as Buffett and Munger were. But he was in a hurry. He had all this margin debt to try to get richer faster and it blew up in his face. That I think is an incredible story of someone who had the connections and the intelligence to be the next Buffett and Munger, but it was just a little bit too impatient. It's great. It's great. Fascinating stuff. Two last questions. Okay. And I want you to think about this. Elon Musk, personality description. How do you think he's doing now? I think he might be, and I say might because the story is far from over, but he might be the perfect example of someone who does not have any sense of enough and it ends up backfiring. That he can build one of the great manufacturing companies in Tesla, a space company in SpaceX. Incredible. And then still have the personality to say, I need to take over and fix Twitter. And what's, that's become. There is a really important part of this, which is that the reason people love Elon Musk,

his ability to take risk, his engineering ability, his ability to push aside conventional wisdom is also what people hate about him. And you cannot love the side of Elon Musk that takes big risks and swings for the fences and is an engineering genius without accepting the part that his crazy eccentric, they're the same personality trait. So like most people want an eccentric genius who thinks out of the box and takes these big risks, but they also want him to have like perfect corporate decorum and perfect manners online. And that just doesn't exist. Like most crazy geniuses are just crazy. And I think that we're seeing that side of Musk in the last six or 12 months. All right. Last question for you, Mr. Morgan, and I appreciate all the time you're spending. I'm very grateful to you. If we could

ask ourselves a couple of questions this year to improve or better understand the way we ourselves view money, what would that be? What I think about a lot is how would I think about money if I were born in a different era or a different country or to different parents, how would that change? If I was born in the 1930s, how would I think about money today differently than I do today? If I were born in Somalia, how would I think about money today differently than I do today? Once you're really, if you're honest with those questions, you realize how much we are swayed by the dumb luck of where and when we were born. I think that's a really important question.

The other thing I think is an important question for everybody, particularly those who work in finance, is asking the question, how are my financial beliefs, incentive, are swayed by my incentives. What am I incentivized to say and do in my career? That might not be actually true, but I have such an incentive to say and do it that I believe it. That's really important too. And again, if you're honest with yourself, you realize how swayed people are by their own incentives. And even if you don't work in finance, the incentive to appease your spouse is important. The incentive to impress your kids is an incentive. The incentive to look smart in front of your coworkers. All those things have a major impact on how you think about money.

Well, listen, Morgan, you are the man, the psychology of money, timeless. Lessons on wealth, greed, and happiness, an incredible bestseller, and a book I recommend everybody. Thank you for joining me on Open Book. So happy to be here. Let's do it again sometime. As I said, I bought a copy of the Psychology of Money for everyone at Skybridge. It's an engaging read, and there are many takeaways to be better with money.

But here's what I learned that I want to share with you, and I want you to think about this as it relates to your relationship with money. study your origin. Did you grow up in a rich family, a poor family? What was your mom and dad's relationship with money? Was it wrought with anxiety? That was certainly mine. Was it laissez-faire where there was an unending amount of money coming to you? I think ultimately what happens in our lives is the way we grow up and the way our parents treat money is sort of where we begin our treatment of money. And so here I am today, closing it on 60, watching my parents fight in the mid-70s because my dad's tight labor schedule and a deep recession in the 1970s led to major

budget cuts at the Scaramucci House and me pledging to myself, man, I got to go out there and figure out a way to hustle for money so that it's never a problem for my family. That psychological relationship and that emotion, frankly, has driven most of my career. Is that what's happening to you? Got to ask yourself that because at this point in my life, I'm trying to reevaluate my own psychology when it comes to money, and which is why Morgan's book is so valuable. Okay, so I had somebody on the show that wrote a bestselling book called The Psychology of Money. Right. All right.

So what's the first thing you think of when you hear the word money? What do you think of? How I can spend it. You like spending money, right? I like nice things. Like, I have a fetish for makeup. I have a fetish for sunglasses and shoes. What about the bag?

I bought you a very nice bag for your birthday. It wasn't big enough for you. You had to go back to the department store and buy a bigger bag, right? And unfortunately, that's when the stop comes out because I like named things. You like name brand. You like name brands, right? Yeah, I'm not much to know. Yeah, well, we know you like Chanel mug because I have an American Express bill from Chanel.

Okay, so let me ask you a question, though. All right. Does money provide security or no? Yes. My father brainwashed me about it. And what about hardship? Does money create hardship sometimes or no? Yes.

How does money create hardship sometimes? Well, if you have someone that is hooked on money and they want more and more and more and they don't provide for their children correctly because they have to be narcissistic and they keep going forward. All right? But some people could be really tightwads with their money too, right? and drive everybody crazy around them, right? So when you talk to people about money and you give advice about how they should think about money, what do you tell people?

I tell people that they should have some on the reserve just in case something medical goes wrong, which I have something medically wrong, which is leukemia. Right. But I have a wonderful son who provides it. All right. It's not an infomercial for me. I'm asking you for what the advice that you give. That's the advice you give.

Fortunately, I never had to worry about money all my life. Right. Yeah, because, you know, we had people around you that were working hard, which is good. When you are in the room or you can pick up on somebody who's a little bit tight with their money or doesn't treat the money like in a way that you like, what's your reaction to that? Well, I had, my father provided home for his sisters. They brought everyone at home and his mother and father. everyone owns a home because of him and his brother had the same kind of money and his brother was very, very tight and selfish and he died alone and my father died with people.

All right? So giving is a good thing, right? I think it's a good thing. This is as long as someone just expects it that's from the outside of the family, yes. Right. So, yeah, but you don't want to get taken advantage of it, but giving is a good thing, right? Absolutely. I think that God provides for people that have. I have Skip. All right. All right. So, Karmuk, what goes around comes around.

All right, Ma, I love you. I am Anthony Scaramucci, and that was Open Book. Thank you for listening. If you like what you hear, tell your friends, and make sure you hit follow or subscribe wherever you listen to your podcast. While you're there, please leave us a rating or review. If you want to connect with me or chat more about the discussions, it's at Scaramucci on Twitter or Instagram.

You can also text me at Plus 1-917. 909-29-29-996 I'd love to hear from you I'll see you back here next week