Ten Percent Happier with Dan Harris - How To Handle the Feeling of Never-Enough, Quiet the Comparing Mind, and Reduce Financial Anxiety | Morgan Housel

Episode Date: February 23, 2026

A financial psychology expert on the science of contentment.   Morgan Housel is the New York Times Bestselling author of The Psychology of Money and Same As Ever. He's a partner at The Collaborative Fund, serves on the board of directors at Markel and is host of The Morgan Housel Podcast. His new book is The Art of Spending Money: Simple Choices for a Richer Life.  In this episode we talk about: What "irrational" spending habits really tell us How to manage money ambition with sanity  How to use scarcity to your advantage A useful equation for finding contentment The key defense against envy  How to minimize future regret Why young people should check their bank accounts more often How to talk to your kids about money How to disconnect self-worth from financial worth  And more   Related Episodes: The Psychology of Money | Morgan Housel   Get the 10% with Dan Harris app here Sign up for Dan's free newsletter here Follow Dan on social: Instagram, TikTok Subscribe to our YouTube Channel To advertise on the show, contact [e-mail] or visit https://advertising.libsyn.com/10HappierwithDanHarris Thanks to our sponsors:  Function Health: Visit functionhealth.com/happier and use the gift code HAPPIER25 for a $25 credit toward your membership. BetterHelp:  Sign up and get 10% off at betterhelp.com/Happier.

This is the 10% Happier Podcast. I'm Dan Harris. Hey, hey, everybody. How are we doing? We are coming back today to a subject that I personally find inexhaustibly interesting and that I will never want to stop talking about, or at least I don't think I will. And that subject is money anxiety. Money is just such a powerful source of suffering and neuroses in my life and in so many of our lives. And so today I'm going to talk to one of the smartest people I know on this subject about how to use money in ways that can actually boost and bolster your happiness instead of sapping your well-being. Just to say, and you're going to hear me address this right at the top of the interview, this is not just a conversation for people who have a lot of money. This is for everyone. We all have to interact with money unless we're Buddhist monks or something like that. And so how can we do this with a level of sanity?

And even, and this is the tantalizing proposition my guest holds out, even interact with money as a neutral tool that can actually make us happier. Said guest is Morgan Housel. This is Morgan Housel's second appearance on the show. You may have heard of him. He's the author of The Huge New York Times bestselling book, The Psychology of Money. He's now back with a new book called The Art of Spending Money. In this conversation, we talk about what hour. our seemingly irrational spending habits really tell us how to manage your money ambition with

some degree of sanity, how to use scarcity to your advantage, a useful equation for finding contentment, the key defense against envy, how to minimize future regret, why young people should check their bank accounts more often, how to talk to your children about money, how to separate yourself worth from your financial worth, and much more. I mentioned the word sanity. If you're interested in sanity, I've got a meditation app for you. It's called 10% with Dan Harris. You can sign up at Danharris.com. There's a free 14-day trial.

If you want to check it out before you spend any money, I'm loving what we're doing over on the app. We are continuously adding new guided meditations from some of the greatest teachers in the world, including Joseph Goldstein and 7A Salasi and on and on. We also do live video meditation and Q&A session so you can get your questions answered and you can get a sense of community,

not only from meditating with other people, but right there in the app, there are opportunities to connect with me and my team and one another. So come check it out, Dan Harris.com. Okay, enough out of me. We'll get started with Morgan Housel right after this. This episode is sponsored by Better Health. Sometimes it can feel like everybody else has it all together in their love lives, whether married, dating, or single. The truth is, many of us are still figuring it out and finding our way. And no matter where you are in your romance journey. Therapy can help you find your way, help you determine what you want, what feels heavy, and how you can take some of the pressure off yourself. This issue of our romantic lives or lack

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for $365 a year. That's a dollar a day. Learn more and join using my link. Visit functionhealth.com slash Happier and use the gift code Happier 25 for a $25 credit toward your membership. Morgan Housel, welcome back to the show. Thanks so much for having me, Dan. Looking forward to it. I'm looking forward to it as well. So the book is called, the new book is called The Art of Spending Money. And so maybe as an overarching question to start with, is this just a rich person's

concern? If I have financial worries in my life, am I left out of this conversation? You know, Dan, it's interesting to read that up because I thought about that when I was writing this book. Was this too focused on one segment of society? I think definitely the answer is no. It easily could have been written in that way. I think it's no for two reasons. One is that no matter what your income level is, people deal with the concepts of envy and jealousy and social aspiration. And sometimes at the lower levels of income, those can be some of the highest levels. The other thing is all of those feelings, in many aspects might even be magnified at the upper income levels. And so several of the examples that I use in the book are the richest people who've ever lived. The Vanderbilts, for example, who, you know, adjusted for inflation were worth something like half a trillion dollars back in the late 1800s and had all these unbelievable spending psychosis problems that they had of their level of social aspiration and greed and envy that ordinary people or even lower income people

can learn from. And so I think there are just as many examples in the book. of people who did not come from great means that can look at people who do have higher, higher income, higher means, and learn from the same kind of common denominators of behavior that afflict everybody. There's really nothing in the book that tells you how to spend your money. That might be a disappointment for some people, but I did that specifically for the point that you brought up. Everybody's different, different income levels, different ages, different cultures, different geographies. But the mental way that we think about it, the psychology that we think about envy, greed, jealousy tends to be universal no matter how much money you make.

So is your basic point that money is kind of neutral. It's a tool on some level. And if you have the right psychology, you can use it to boost your happiness. That's definitely the preferred way to do it. It is much more common, though, to not use it as a tool, to use it as a yardstick of status to measure yourself against others by, which is not always a bad thing. Life is a competition. Signaling is part of that. But you can easily, and is most common to take that to a point that is too far, where suddenly you're not using money as a tool to live a better life. You are using it solely as a status tool to measure yourself against others by. Part of that, I would say, is because money is so tangible and easy to count.

So for example, if I said, which of us you or I, Dan, is a better father? There's no way to measure that. There's no father score that is apples to apples. It's a very important topic. I would love to be a good dad and measure my progress, but there's no score. But if I asked which one of you and I earns a higher income, has a higher net worth. We can measure that down to the penny, and it's apples to apples. So I think because of that, money becomes this ultimate scorecard of how well you're doing in life in a way that can lead to a lot of profound lack of satisfaction and joy and jealousy and envy just because it is so easy to count. I just want to be clear that my son, who's 11 and loves to bust my balls, would sight on scene

say you're a better father, just so you know. My son, who is 10 about the same age. would probably agree that you would be a better father. I think every good son has that view. They're tired of their dad telling them what to do. Yeah, or if it's just straight up Oedipus complex. Who knows? But yes, I do think it is the job of a son to bring their father down a peg. Just on the subject of rich people and their psychosis, this probably came up in the last time we chatted. And I know I've cited this in many podcast episodes that I think it was a Rockefeller who was asked, you know, how much is enough? And he said just a little bit more. Right. That's it. I think that's, you know, it's funny when we hear

Rockefeller say that because he was the richest man in the world. But it's so true. I've noticed this about myself. I should state from the outset, I've never proclaimed to be a perfect expert at this topic. And I'm trying to impart that wisdom onto the reader. I wrote this book and all of my books as a self-expiration into my own problems. And to your credit, Dan, I think you did the same. And it ends with, you know, wisdom for the reader that hopefully you can help them with. But it's not saying, I've mastered this. Let me tell you how to do it. It's I struggled with this. Let me tell you my journey. And so I bring that up because I've noticed this in myself. I write about the concept of enough and contentment and whatnot. I would never say that I'm a master about that. And if you

asked me today, if I was honest, if you gave me truth serum right now and you said, how much is enough, say just a little bit more. So I think that can afflict virtually anybody at any income level. I remember when I was a teenager thinking to myself, if I had $1,000 in the bank, all my problems would go away. And I genuinely believe that kind of thing. And so I think at any age income, it's very easy to tell yourself the story, the narrative, that if my net worth, statistically, for all the studies show it's roughly 2x of whatever you have right now, would in your brain check a box. It says, now I have enough. I have this executive coach I've been working with for almost a decade.

Great guy. His name is Jerry Colonna. And he, he's like you and like me in that he doesn't pretend to be perfected. He talks a lot about his own foibles and flaws. And he has this story for many years ago when the psychotherapist with whom he was very close and she's now passed on. But there was a conversation they were having when she was saying, well, Jerry, how much is enough. How much would you need in order to feel safe, to feel sated? And he said, Bill Gates money. Well, that's such a good answer because I was just going to bring this up. Steve Ballmer, who was the CEO of Microsoft for two decades or so, and he's one of the richest been in the world. I think he's worth 150 some odd billion dollars right now. He did a wonderful

podcast with the podcast acquired about a year ago, I think it was, maybe six months ago. And he didn't say this directly. I don't want to put words in his mouth. But he got close to kind of tangentially pointing to that he worries about losing his money and running out of money, that kind of thing. Again, he didn't say that, but if you listen to what he said, you can kind of get the gist that he thinks about it. And so this is someone who's worth $150 billion. And I think that's true for a lot of rich people, that when you are poor, you worry about never making enough money. And when you have money, you worry about losing it.

I think it's common. I think a lot of times in life, from many topics in life, people have a minimum level of stress that they need in their life. They can never just say, I'm great, I have everything, I don't need to worry anymore. They always need to worry about something for most topics.

And if they don't have a legitimate level, if they don't have legitimate problems to worry about, they will make up fake problems to worry about. And so when you are poor, and you might worry about not being able to pay rent, that's a legitimate worry that you worry about. When you're rich and you have all the money that you ever need,

you might worry about losing it. And that might be, you know, a much less rational worry, but you need to worry about something just to kind of keep your brain. I think there's some truth to that. I agree with that. I think, and I don't have any evidence other than my own end of one experience, but it

feels to me like I have a certain amount of anxiety in my system, and it will find some shit to latch onto. And so you might be able to reassure me about whatever it is I'm assessing over right now. The storehouse of anxiety will just move on to the next item in the passing show. Okay. So you brought up a bunch of things that I want to follow up on, a contentment. for sure I want to get to. But since we're picking on rich people for a second, which, you know, I'm always happy to do. I want to get to something you say very early in the book, which is

relevant to this thing that you and I've been doing, which is being judgmental of the super rich and how they think about money. No matter what level of income you're at, we all have our stuff around money and we all have this tendency to judge other people in their stuff. And So there's this expression you use very early in the book that I think it's worth unpacking here, which is all behavior makes sense with enough information. Yeah. I got that quote from my brother-in-law, who is a social worker. And he says that they use that phrase in the social work community very often when you're working with very troubled kids who are maybe homeless or abused at home.

Just horrific backgrounds. A lot of those kids perform very poorly at school. They're truant. They get in fights on the playground. and it's obvious in common that a teacher or a principal would say, why are you behaving like this? I can't understand what's going through your head that would cause you to do that. And in the social work circles, I say all behavior makes sense with enough information.

If you knew the abuse and the neglect that that child was dealing with at home, you don't condone the behavior at school, but you understand it. It makes sense with enough information. I think you can apply that philosophy to so many things in life, including how we think about money, saving money, spending money, showing off how much money we have. I try not to judge, but whenever I see a guy in a yellow Lamborghini, let's say, there's a story behind that. There's a story, the majority of the time at least, wanting to show other people

that you've made it. I use a story in the book of a very close family member of mine that grew up in abject poverty, homeless and in the foster system for much of his childhood, and it became a very successful businessman. And when his daughter was going to college, he told her, please pick the most expensive school that you get into. And the reason he said it is it was a social trophy to him and a symbol of what he had overcome to send his daughter to the most expensive school. And in his mind, it was the higher, the tuition, the better. And so you have, I used to that as an example of there's a lot of behavior with money that doesn't make a lot of rational sense. It either looks highly egotistical or just doesn't track with rational thinking. But when you

scratch beneath the surface of the stories and the psychological scars that every one of us has, I have, you have, it makes sense. And again, you don't always say that behavior, is right. But you can be like, I kind of understand why you would do that. I found this great headline in the Washington Post from 1929, which was the peak of the roaring 20s just before the Great Depression, the biggest, one of the biggest bubbles back then. And the headline I thought was so brilliant. It was, the more you were snubbed while poor, the more you will enjoy displaying being rich. And so if you grew up poor, as a lot of people in the 1910s and teens did, and you were snubbed for that, when you finally had some money in the 1920s, that was a person that was going

to get the flashy car in the jewelry and the mint coat and whatever it was back then. And so I think there's quite a bit of that. And you can always tell a lot about people's backgrounds and their psychology, even if they don't know what these things would be by watching how they spend money. Either people are very content and confident in themselves or they're trying to either prove to themselves or to prove to other people that they've made it in the world. It's such a thorny subject. And you brought up so many great points there like the power of humiliation in human affairs, you know, with the snubbing, the tendency that we all have to judge. Yeah, we see somebody in Lamborghini and we go right to, oh, yeah, he must have a micro penis.

But it could be any number of things. It could be he was an orphan. Actually, this is a great way to, you know, he grew up in foster care and this is what makes him feel safe. And so it scans to us as obnoxious. But once you have enough information, there's a French corollary. I can't remember the words in French, but it's something like to know, all is to forgive all. Yes. And it's a very generous way to go through the world. And there's a lot of times when you see someone, let's just use that yellow Lamborghini, the extreme example, a lot of times, yes,

they're trying to show off to other people. It's not uncommon, though, that who they're actually signaling for and performing for is themselves, because they came from such a lower spot, and they know the weight that was on their shoulders at a different point in their life. And the car is a symbol to themselves that they've made it. It's a social trophy for themselves. And I think we all have some version of that if we overcame some big adversity earlier in their life. I'll give you mine personally. I've written about this a little bit. I had a very extreme stutter growing up and it was really hard for me to speak fluently until I was 30. And now I speak for a living. I speak at conferences all over the world and whatnot. And in a lot of ways, I think it's my social trophy. Do I actually enjoy

traveling around and flying around and speaking on stage? I think I enjoy some of it. But whenever I get off stage, there's this feeling that I think I have that other speakers wouldn't because for the first 30 years of my life, speaking was one of the biggest challenges that I could ever have. So it has a very different feel for me now. I think a lot of people have that same version financially. If they felt like they were snubbed and now they're earning a big income, those are the people for whom like money can't burn a hole in their pocket fast enough. They have to go out and prove to themselves that they made it. Your story about the stutter just makes me so happy for you at the end of every sentence. it's interesting.

Most children stutter, the majority of, you know, three or four-year-olds will stutter, and 95% of them or so will outgrow it by age six or seven. So it's very common. If you listen to a toddler speaking, they're just constantly stumbling over their words. And then it tends to fall off by age. And by puberty, it's a fraction of one percent of people still have a stutter. And mine was very severe. I mean, if you go back to when I was 15 or 16, I really couldn't finish a sentence.

And it stuck with me, it was a slow. progression. I think I started figuring out how to overcome it when I was 15 or 16, but I hadn't mastered how to overcome it until I was probably 30. And so it's true. Even doing something like this podcast, I think it's a good feeling. I had a friend who grew up in Africa deeply impoverished and then moved to America. And he said to this day, whenever a hot meal is placed in front of him, he just has this radiant sense of joy because he remembers what he was like to be hungry in a way that if you and I got a hot plate of food. It probably just, that's just what we have. So when you start from like a low starting base, any kind of accomplishment has a completely different sense of what you've done.

Well, so this is something you write about in the book. I believe the phrase is the best measure of wealth is what you have minus what you want. And so this gets us very directly to contentment. Yeah. I think what's important is that a lot of what we chase in life financially, but in many aspects of life is happiness. And it seems like, of course, that should be the goal. Life, liberty, and the pursuit of happiness is what we're all after. I think it's the wrong phrasing, and this is not just semantics, is that happiness is always a fleeting emotion. I always use the example of happiness is like humor. If I tell you the funniest joke you've ever heard, you might laugh for 30 seconds. You are not going to laugh for 10 years straight. This is not how it works. It's a fleeting emotion.

It's a great emotion. I went to a comedy show last week with my wife, laughed for the whole time. but it's fleeting. You don't laugh the whole night. And so when we daydream about having more money, having a bigger house, having financial freedom, retiring, whatever it might be, by and large, what we're doing is imagining ourselves with that house or in retirement, whatever your goal is, and being content with it. And that's what feels good. That's why the daydream is awesome, is because you imagine yourself in that house thinking to yourself, I don't need a bigger one. This one's perfect. And so what we're actually after, I think, is contentment. And happiness is always fleeting, but contentment can be a pretty durable emotion. And it's very difficult. I don't want to

pretend like this is an easy thing. Oh, just be content with what you have and then it's done. A lot of the reason that we've made so much progress in the world over the last several hundred years with technology and medicine and everything is because people are not content. Because most people wake up every morning saying, I need to do better. This isn't enough. I need more money. We need better technology. We need more productivity. That's why this world is so great. So I don't want to say everyone should just be content with what they have. That's not it. But you have to understand the formula for doing well financially, what you have minus what you want. I want more money. Of course, everybody does. But I also know that if I don't go out of my way

to manage my expectations with as much emphasis as I do growing my net worth, growing my income, it's never going to feel like it's enough. And for a lot of people financially, if it never feels like it's enough, they end up running themselves off a cliff, too much risk with their investments, too much ambition at work, and then they don't even know who their children are kind of thing. And so it's the most important topic in finance, I think. It's very difficult, and it takes a lot of work. I've used this analogy before that I think it's actually pretty similar to meditation, where if you meditate very often, you can have a better life. But then you don't get to stop. You have to keep doing it over and over and over and over again. And so I have to remind myself about contentment and enough daily, I think, and I'm still pulled towards the siren song of more.

But with the reminder, I think my wife is much better than I am at this of saying, like, I know you're dayduring about that thing, Morgan, but you know it's not going to make you happy. Or you know it. And I can give you 400 examples of the time you said it was going to make you happy and it didn't. But it's a daily reminder to progress to that area. I have a question. I'm just going to preface it with a very brief little anecdote. I'm a little bit obsessed with the Beatles. I'm always excited when I find any new documentary on the Beatles.

side note within a side note on Disney Plus recently, and they're not a sponsor. They dropped this like nine-part documentary series recently called The Beatles Anthology. And it's old, but it's refurbished in some way by the guy who directed The Hobbit and the Lord of the Rings. Anyway, it's amazing. And then I was clicking around last night and saw that there was a Beatles documentary, like a feature, like an hour and a half long thing about John Lennon and Yoko in their first year in New York after the Beatles broke up. I had never seen it before. It's called one to one, and I'm only halfway through it. It's really good. But there's this moment where John, in their first year, before they moved into the Dakota and their fancy apartment in the building outside of which John Landon was eventually shot and killed, they lived in a, I believe, a garden apartment in the West Village, a very small, modest apartment. And John is talking about the fact that he had this beautiful estate. He had grown up without much. And he had this beautiful estate outside of London. And he gave it all up and moved into this quite modest apartment. apartment with Yoko where they lived for a year and he was, I think he used the phrase, I'm happy as Larry, which I guess is some sort of British expression that I don't fully understand who Larry is.

So anyway, I say all of that to get to this question, which is, I think we can all agree that managing our expectations, striving for contentment is happy with, again, the asterisk that you issued before, which is that that's not to say that we should be complacent or resigned or killing our ambition, but managing our expectations, getting as many hits of contentment in our mind stream so that we are balancing our ambition with some sanity. My question is how? What are the modalities for doing that? The first thing I bring up, I like that you bring up the Beatles because they did something that's very rare for successful people. You'll probably know this answer. How long were they a band for? Or let's say a big, like international band. It was a very short period of time. I don't

know the number of years, you might. Well, so they were together for a long time, not starting when they were teenagers, but they were a big international band, I think starting in like 64, 65, and then they broke up in, I think, 69 or 70s. Very short period of time. And the reason I bring that up is you can easily imagine an alternative history where they just cranked out album after album after album into the 80s and kind of thing that weren't that good. I think a lot of the reason there is so much affinity for the Beatles and why they're so beloved. is the power of scarcity. And I know they broke up for not always positive reasons, but there was a sense of enough of just like, the reason we love them is because there's not that much of them.

And let me give you the alternative to that, the Simpsons. The Simpsons are still creating new episodes, and from what I understand, not to disservice the people work on the show, but they suck. It's not that good. It was absolutely genius in the 1990s when a lot of us watched it, but they kept going and going and going and the alternative to that would be something like Seinfeld, quit on top, And a lot of the reason they're beloved, the show is beloved today is because scarcity. Like, it was a no, we don't have that much of it. So I think there's a lot of, like, what makes it great is because of scarcity. I use this example in the book of this friend of mine is very wealthy and he has a private

chef that makes him three meals a day. And these are like Michelin-starred meals that he eats three meals a day and gets that seven days a week. And I'm a little bit jealous, of course, of that whenever I see him. Like, that's amazing. I guarantee you, though, no, I can tell you as a fact. He does not appreciate it. 1% to the extent that you and I would think he was, because that's all he knows.

The reason that it seems amazing to me is because I am used to the gruel slop that I make myself for breakfast. So the incredible, like, Michelin burrito that he's eating for breakfast by comparison seems amazing. But he doesn't know anything different. And so what feels good is the power of scarcity and, like, trying something new. That's the first thing I'd bring up. A more direct answer of how we can go about doing this is I think people always overestimate to a profound degree how much attention and social status you get from other people for your material possessions. It is so easy to assume if I had this house, this car, this jewelry, these clothes,

whatever it would be. Most of the time, that person is a complete stranger. It's just the rest of society would think better of me. They would give me more respect, more admiration, whatnot. And we always overestimate that because nobody is thinking about you as much as you are. Nobody cares about your house or your cars or your clothes as much as you do. They're busy thinking about themselves. And so when you come to terms of that game that nobody is looking at you as much as you do, there was a study I saw that was a very brilliant study that I think really put a pin in this. They would take someone and give them a hideous sweater, an ugly, ugly sweater, just objectively awful sweater. And they would send that person into a big crowded bar or party, whatever it might

be. And then they would bring that person out and they would say, how many people in that party do you think noticed your sweater? And the person wearing it would be like 80% of people saw me and judge me for my sweater. And they would go in and ask people at the party, how many of you noticed the woman in the ugly sweater? And the answer was, nobody. Nobody's paying attention to you as much as you think you are. And so once you come to terms of that, then you can use your money for what I think is the most powerful thing, which is independence. Stop trying to get the attention of other people who don't care about you and aren't paying attention to you. Use it for the independence of yourself and your family and your very close group of friends. That's where you can have the

most power with it. And so that's all I've ever wanted out of money is independence. I just want to wake up every morning and say, I can do whatever I want today. I couldn't give two shits about what other people, strangers out there are thinking of me. I desperately want and need the love and attention from my wife, my kids, my parents, and maybe two of my friends. And that's it. It's going to be different for everybody, but that's pretty much it. And then it drops off precipitously from there, and it should because they're not paying attention. And the truth, too, is my six-year-old does not care how many horsepower my car has. My parents don't care how many square feet my house is. They're going to care about much more durable things like your love and your attention,

and you can use money for those things. So I think that's part of it. With the asterisks, as I said earlier, that it's much easier said than done, and it takes almost daily practice for this. But that's how I've always thought about it. If you're using money to socially climb, you're always going to overestimate the rewards. If you're using it for your own independence, it's one of the most miraculous tools that exist. When you say using it for your own independence. What do you mean by that? I've always been a big saver since I was 16 or 17 and it started earning money. And I didn't put this into words until much later, but I always viewed it, even back then, that I wasn't saving money. I was buying independence, that every dollar that I

saved was an independence token. And it wasn't delayed gratification. It wasn't like I'm saving money so that I can spend it down the road and then I'll be happy. I got pleasure out of that savings every day because I woke up knowing if I lose my job, if I get hurt, if I want to move, if I want to get a different job, I have total flexibility to do that because of this financial cushion that I have. And I think people just as a survival mechanism massively underestimate the odds of something bad happening to them. And so if I said, what are the odds that you and I will face at least one of these over the next 30 years? Major medical illness, job loss, divorce, wayward children, going down the list of whatever that would be. The odds that we will

experience at least one of them, if not all of them, are nearly 100 percent that at least one of those will impact our life. And so people underestimate that odd, because if they were honest with those odds, it would be hard to get out of bed in the morning. And so once a decade, if you're saving money, in nine of those years, it'll feel like a waste. In one of those years, you'll be like, this is the most incredible thing. I have so much independence and flexibility, because this terrible thing happened in my personal life or in the economy, and I have a little bit of financial oxygen to deal with it now. I think it's huge. And everybody has incredible talents. Every single person has incredible talents, but you can really only utilize it if you have

some degree of independence. It's very difficult to know who you are or what you're capable of if your entire life, particularly in your professional life, is following somebody else's orders, somebody else's dreams, somebody else's ideas. And so the material stuff that we all in our life is going to be different from person to person. I think it's a universal thing that people want independence and can thrive with independence. Coming up, Morgan talks about how to use scarcity to your advantage, the latest research on the relationship between money and happiness, a key defense against envy and much more. Let's go back to scarcity for a second. I think maybe there's more to say on this score.

Correct me if I'm wrong, but that there may be a way to introduce scarcity in the score. into your life in a way that actually helps you manage your expectations by, you know, having little luxuries intermittently instead of expecting some sort of steady stream of them. Am I on to something with that? You're absolutely right about that. And back to my friend with the private chef, going out to a very fancy dinner once or twice a year feels amazing because it's rare and unique. When you get it three meals a day, it feels like nothing.

Christmas feels amazing because it's once a year. It feels all the time. You just wonder why you have a pine tree sitting in your room and that kind of thing. I think there's a lot of truth to that. Part of the reason that I want to live, I'm not going to say a frugal life, but a simple life is because the occasional luxury feels amazing when you do it. If you're doing it all the time, it just becomes the norm. And there's a lot of this. Nobody wakes up every morning and says, gosh, I'm so grateful that we have penicillin.

It just became something that everybody expected. But if you had explained a penicillin to somebody 150 years ago that, hey, all these illnesses that killed seven of your 10 children, by the year 2025, or, much earlier than that, we just have a pill that costs $2 and just wipes everything out and you're fine. That would have seemed like the most incredible miracle ever. But now it's everywhere and whenever you need it, it's there. So we don't think much of it. So there's a lot of example of like luxury becomes necessity very quickly in life. And people can get accustomed to nearly anything.

This was the great philosopher Chris Rock who said, if Bill Gates woke up with Oprah's money, he'd jump out the window. No matter how much luxury you have, you just get accustomed to it in three seconds. And so that's when living a simple life and introducing luxury to yourself in small doses is actually the way to maximize the amount of pleasure you get out of it. Chris Rock is so brilliant. Your story about penicillin reminds me of something. I have this longtime friend and meditation teacher Joseph Goldstein who comes on the show a lot. And if I talk about him a lot because he's a big part of my life. And he has this story of basically killing the whole vibe at a Thanksgiving dinner with his family one year.

with his brother and his brother's wife and their children and they were going around the table talking about what they were grateful for because that's the type of thing you do on Thanksgiving. And Joseph said, I am so grateful that when I turn on the hot water tap, hot water comes out of it. Like that's crazy. And most of the world doesn't have that. Everybody at the table is like, what are you talking about, dude? But, you know, if you tune into stuff like that, it makes life look entirely different. you asked a few questions ago about how to be more content with what you have. I think being a student of history is very important here. When you learn what life used to be like, I've used this example before in my first book, John D. Rockefeller was the richest man of the world at his time. He didn't have penicillin. Not only that, he didn't have Advil. He didn't have sunscreen. He didn't have electricity for most of his adult life. He didn't have a tiny fraction of any of the medical care that you and I can get at urgent care right down the street. And it's not to say that the average,

person is living better than John D. Rockefeller. It's just an example of like how quickly luxuries become necessities for everybody. And you can easily imagine a world in which our children, let's say, for example, don't have to worry about cancer, that it's just something that we've kind of solved 30 or 40 years from now. I'm not a medical professional. I have no idea. But let's say that's the case. Almost certainly they will not feel the sense of gratitude that imagining that scenario feels like today. When you and I say that, you guys won't have to worry about cancer. It's like this is the most amazing world and you're going to wake up every day so grateful for it. No, they won't.

They'll find something else to complain about. Just like you and I don't have to worry about dying from scarlet fever, which would have seemed preposterous 150 years ago. So one of the ways to become more grateful about what you have today is to become a deeper student of history and to learn about what life was like for 99% of people who came before us. Okay, so if we go all the way back to the question I asked before, like, how do you manage your expectations?

How do you have some contentment? Again, not the type of contentment and reduced expectations that put you on the couch forever, but that kind of takes the edge off of the natural, healthy ambition that many of us feel. So how do you do it? I'm hearing at least four things and I'm running them by you just to make sure I understand them correctly and also just to make sure there isn't something we missed. One is, you know, living a simple life so that the luxuries you do have actually produce dopamine and aren't, you know, absorbed in the hedonic treadmill that,

is so prevalent in our lives. On a related note, becoming a student of history as a root to gratitude, understanding that if you look at your life through the lens of Thomas Jefferson or a Rockefeller, there's a lot of stuff that you could be really grateful for, realize that the purchase you think is going to bring you increased status and universal acclaim is actually not likely to do that, given that most people are stuck in their own movie and they're not that concerned with you. And then finally, it's like knowing that the best use of money is not acquisition, accumulation, the feudal pursuit of status. It's to buy yourself independence, to buy yourself freedom of some sort of buffer against life's inevitable ups and downs.

I think that's right. I would use this more recent example that I heard recently that I really liked. Andrew Ross Sorkin just wrote a book called 1929 about the stock market crash in 1929. It's a fascinating book about the early days of the Great Depression. And in one of the reviews, I thought this was a very astute thing to point out in the review, virtually all of the big characters that are portrayed in that book, who were the titans of their day back in the 1920, some of the richest men in the world, the most powerful people in the country, virtually all of them are forgotten today. And so I think this is another kind of subtle example of you can be the richest person in the world with the biggest mansion in New York and whatnot. Nobody cares. You're not going to be remembered

for any of that. Nobody is paying as much attention as you think. And on the flip side of that, I think a lot of people have like a grandfather of lore who did something incredible, was helpful to his or your grandmother's community, did something amazing, was funny or whatnot, and is remembered forever. And so, like, if all you're doing in life is making money and trying to show off how big your house is, nobody's going to remember you for that. If you actually do something positive in the world, people will remember you for that for a long time. So is this the thing about resume virtues versus eulogy virtues that David Brooks talks a lot about?

which is such a brilliant way to phrase that. Resume virtue is your GPA, the square footage of your house, how much money you make, eulogy virtue is how kind you are, how many friends you have, how helpful you were to your community. Warren Buffett framed this in a slightly different way, similar topic though. He said, write what you want your obituary to say. And so it's going to be different for everybody, but what do I want my obituary to say? I would want it to say something like Morgan was a good father, Morgan was a good husband, Morgan helped his community, he listen to his friends, those kind of things is what I would want it to say. And you instantly realize in that exercise that you would never put your salary, your net worth, how much your

stock portfolio outperform the market. It's intuitive that those things don't matter at all when you're looking back at your life. Nobody would think of those things. And so it just gives you a different set of goals to chase. And as I said earlier, a lot of the reason we chase financial goals is just because they're so easy to count. And so if I said, I want to be a 10% better dad, great goal. There's no way to track that. There's absolutely no way to know whether I'm on track and whether I'm a phenomenal or a terrible father today. Nobody know. It's impossible to measure. But if I said, I want to increase my salary by 10% next year, very easy thing to track. And so because of that, we're more attached to financial goals than we should be as a solution to so many of our

problems. I may have been hallucinating what I'm about to say, but I feel in preparing for this interview that I read something in your writings somewhere that when we purchase something, like we get a new car, or we get a new house or a new sweater or whatever it is, that we think is going to bring us glory socially. To the extent that anybody notices, they are not conferring the glory upon you. They are just admiring the thing and mostly imagining what their lives would be like if they had that thing. Right. That came from my first book, The Psychology of Money. And I noticed that when I was in college, I was a valet at a five-star hotel in Los Angeles. And it's the coolest job any 19-year-old could have because I was parking Rolls Royces and

Aston Martins and Ferraris is the most amazing job. And I realized one day that if somebody drove into the hotel in a Ferrari, I would stop and gawk, but I never stopped and looked at the driver. I couldn't care less about the driver. What I would do is I would imagine myself as the driver. and I told myself, if I was in that car, everybody would stop and look at me. And it was one day after doing this for years,

and I was like, don't you see the irony? Like, I don't care about the driver, but I want to be the driver because I think people will then care about me. And it was like, no, nobody's thinking about you as much as you are. And I think that's true if you have an incredible house, an incredible sweater, as you point out, incredible shoes, whatever it might be,

that to the extent that people are looking at them, by and large, what they're doing is they're imagining themselves having that item. They don't really care about you. They bypass you and they go straight to themselves. I think that's a very common thing. And it gets back to this idea that nobody's thinking about you as much as you are. If we're about to go out to a holiday party, let's say, sometimes I'll ask my wife, hey, does this shirt look okay?

Does this show us has the same response. Morgan, nobody's looking at you. Nobody cares. Nobody's paying that much attention. Just wear the shirt and go. Nobody's going to pay any attention to it. I think there's a lot of truth to that. What does the research say about whether,

having more money will make us happier? For many decades, it was a contentious topic because there would be one study that shows pretty high correlation. Make more money and you're going to be happier. There are the other famous studies that show, oh, after $70,000 per year, it really tapers off. So if you're dirt poor earning more money is great, tapers off after that. And there was a lot of contention between that. For every study, there was an equal and opposite study.

And so a lot of that, in my view, was there's some new information on that that I think was really interesting, which is that just in the last couple years, we've shown that if you are already an unhappy, miserable, grumpy person, earning more money is not going to do very much for you. If you are already a joyful, content, happy person, earning more money is incredible. So in either way, it just leverages who you already are. And I think you see that for a lot of rich people that they're not happy whatsoever. And I think a lot of it can even go negative. And Will Smith, another great modern philosopher, brought this up. He said, when he was poor and depressed. He could tell himself, once I make more money, then I'm going to be happy. And so he had hope.

And hope is an amazing thing. But then when he was rich and he was still depressed, he lost all hope. He was like, I have more money that I could ever need. And I'm still sad. I'm still depressed. And so I think not that people have a lot of empathy for them, but a lot of richer people can find themselves in this moment of despair when they're like, I worked my ass off and I have more money than I could ever spend. My grandchildren don't need to work. And I'm still unhappy. I think it was Rick Rubin who said, you only become truly depressed once you've reached your goals. Because that's when you realize that it didn't change who you were. And so I think there's quite a bit of that.

I have a really close friend who sold a bunch of companies at a young age, made a bunch of money, but not off money that he could retire, although he could have retired, but he kept working. He was really young. And then he built another company, sold that, and then had like true fuck you money and had to quadruple his dose of antidepressants. Just went off a cliff. Like there was no meaning or purpose to his life.

All of the ghosts that had been chasing him caught up with him in the slow period after having cashed his checks. And it was really, really hard. You know, I point out in the book that among the 10 richest men in the world, there are cumulative 15 divorces among them. And so I think if you actually put the richest people in the world on the therapist's couch and really got into their brains to figure, about happiness is not a common denominator that you would find among them. I think there's a couple reasons for this. One is that a lot of very wealthy people are wealthy because their career has come at the expense of everything else, at the expense of their family life, at the expense of their personal health. And so the reason they're rich is because that's the only thing they've ever focused on.

And it's very difficult to be truly happy and content in life if all you have to show for it is money. So I think that's one of the reasons. The other is, as we're saying before, being poor or just being of modest means is having that sense of hope that there's something on the other side that if I work really hard and make more money, then I'm going to have a better life. That's an amazing thing to chase after. I mean, what's the general philosophy of how to have a good life? It's like something to do, somebody to love, and something to look forward to. Something to look forward to is a really key ingredient of having a good life. And once you can't look forward to the day when more money is going to make you happier because you already

have as much money as ever want, that could be actually a pretty depressing thing. And I feel like we don't talk about that at all because people don't have a lot of empathy for rich people. It's like, oh, boo-hoo kind of thing. But you see it. You spend time with these people and it's like, oh, it's a real thing. Yeah, do we keep coming back to the super rich, not because we think it's relatable, you and I, but because it's a cautionary tale. It's a series of cautionary tales. It's an extreme version of what we all deal with that helps us put our quotidian worries into perspective.

let's keep going with some more sort of down-to-earth tactical advice that you have for the rest of us, the vast majority of humans who are not super rich. One of your pieces of advice is to aim for utility versus status. What does that mean? The example I use is you have to imagine yourself being on a deserted island, maybe just you and your family and maybe some of your close friends, like your core tribe of people. And so in that world, nobody can see, no outside.

at least, can see how you're living. Nobody can see your house. Nobody can see your car. Nobody can see your clothes. You are blocked off from the rest of the world. There's no social media. How would you choose to live in that world? And let's also say, since this is all make-believe, you have unlimited money. How would you choose to live in that world? If nobody could see it, I think most people would gravitate towards utility over status. You would not want an enormous mansion because it's a pain in the ass to take care of. You would want a house with a nice view because that gives you utility. You probably would not want a Lamborghini. You'd probably want a pickup truck that has utility. Somebody explains to me in a way that I thought was great. They said a high-end Toyota is a nicer

car than an entry-level BMW. Because all the entry-level BMW is, is status. It's just an emblem to show other people that you have some sort of taste and level of success. The high-end Toyota is filled with utility for you. It's comfortable seats and a good sound system and a moonroof. It's like things that make you good, even if everybody on the outside, just like, looks at your little Toyota emblem. I think that's a good way to think about it. Like, are you doing this thing because it makes you happy and gives you a better life and helps your family? Or are you doing it because you think there's a level of status that is going to be reflected upon other people? And so I think that's the way to think about it. And that's always been the case. Social media just dumped kerosene

on this fire. Yes. Because now so much of life is performative, which is the right word. People don't post on social media. They perform on social media. Perform for other people. And no matter how, well you're doing in life, there is an endless stream on your phone to people who at least appear to be doing better and are happier and richer and prettier than you are. And so this topic that we're talking about would have been relevant and important 30 years ago. I think it's an order of magnitude bigger now, especially for young people. It's incredible to me how reliable a source of suffering Instagram is for me, even with all of the meditation and other work I've done. It's incredible. I think this is related. Another piece of advice is that a key

defense against the unwinnable status game, which is the game that has been drenched in kerosene by social media, but has been with us as a species since the savannah, a key defense in your argument is self-examination. Do I have that right? And if so, what do you mean by that specifically? I think a lot of what envy is is kind of outsourcing your goals to other people. Like, I want what you have. And again, a lot of life is a competition that's unavoidable, competition for jobs and for mates and whatnot. A lot of it is unavoidable. But if my definition of success is just one more of whatever you have, that's an unwinnable game. And so I think for a lot of this, you have to become selfish in a good way. You have to keep your goals and your aspirations kind of confined to the

roof of your own house, just you and your family. This is one of the things that I'll always put the asterisks of easier said than done. But I try to think about that quite a bit for my own goals, of like there's a humble bubble that you have to live in with your own goals and whatnot. So I think about like for investing returns. So much of the investing industry is based off of outperforming peers. It's not how well have you done. It's not even do you have enough money for retirement or to send your kids to college. That's a side point in most of the investing industry. Almost everything is, did you outperform your peers? It just turned into a game. It's like a sporting event of this. And if life is a competition, that can kind of make sense. But you can, if you step back, you see the

absurdity of it. The question is not, are you prepared for retirement? It's did we outperform our two, are three, five, and ten-year benchmarks. Like, it's absurd. And so I think if you keep your goals confined to the roof of your house, a lot of these things become much more manageable. You can keep your expectations in check in a much more manageable way and say, I don't care what my kids' test scores are relative to other people. I care that they are happy and content and proud of themselves and that we're proud of them. And, you know, balancing that with life being a competition is always difficult. If you want your kids to get into a good college or get a good job after that, a lot of it is you do have to play that game of test scores, whatever it might be. If your goal is to

have a good life, I think it takes more of a sense of keeping those goals internal, the internal benchmark versus the external benchmark. It sounds like your wife is a key part of this, but what do you do in order to keep yourself to the best of your ability and with the caveat that it's easier said than done? What do you do to keep yourself in the aforementioned humble bubble? I think I've always been, and this is not unique, this is not rare, but part of it is I've always been the kind of person who has two or three really good friends, and then the world kind of drops off after that. I don't know if that's the healthiest life, but that's what has always been. I don't have research backing this up, but I tend to think that people who want to be everybody's

friend tend to be the kind of people who are trying to impress massive groups of people, and that's a very difficult game to play. So keeping your social circle small is important. Being choosing and picky about who you socialize with is very important. I grew up in the woods outside of Lake Tahoe, and this was before tech money when it was just a poor mountain town. And then I went to college in Los Angeles during the housing bubble when there was literally just like a trillion dollars floating down the street kind of thing. And it was clear as day. It was not subtle that people had better lives, were happier and more content in the poor mountain town than they did in Los Angeles. I think a lot of that was just in the poor mountain town, your neighbors were humble as well.

And so when I was growing up, rich people had new pickup trucks and poor people had old pickup trucks. That was the stratification of wealth. It was not that much. In Los Angeles, you know, poor people have entry-level Rolls Royces and rich people have like custom-made rose-wises. That was the stratification in Los Angeles. And so being careful who you socialize with, I think is very important. Someone asked me not too recently, like among rich people, again, just using them as a magnifying glass, what subset of rich people tend to be the most happy and content with it?

And one of the things that I said that I've seen many times are if you start off modest and then become rich, the people who kept their friends. After they became rich, they kept the same group of friends that they had before they had money or especially kept the spouse that they had before they had money. Those people tend to do fairly well. The group of people who, once they become wealthy, they discard their old social circle or discard their spouse and upgrade, so to speak. Those people, I think, have a much harder time with it because their expectations are rising at the same level of their income. And so if your income goes up 10fold and your expectations go up 12fold because you enter a whole new social circle, that's a very difficult game to play. If your income doubles and you keep the same friends who have the same expectations and the same definition of a good life, that could be an amazing life. That could be awesome. And so I've tried to do that myself. The small group of friends that I do have are friends that have had for many, many years. And again, maybe that's not that unique, but the friends who I cherish the most and who I'm capable of having the best time with are friends that I've had for 20 years. And I think there's quite a bit

of that, no matter how much money you make. That lands for me. Coming up, Morgan talks about how to minimize future regret, how to talk to your kids about money, and how to separate your self-worth from your financial worth. Just to reset, we're talking about how to use your money, no matter how much money you have to bolster your happiness instead of sapping it, to bolster your sense of well-being instead of diminish it. Another concept you have, Morgan, is to minimize future regret. Can you unpack that? This came from Daniel Kahneman, the late psychologist, won the Nobel Prize in economics. I did an interview with them 10 or 15 years ago. He passed away last year. And we asked him specifically about investing. Like, what behavioral traits do you need to be a good

investor. And he kind of swatted away the investing side of it. But he said for money in general and for life in general, you need to have a well calibrated sense of your future regret. He said, you need to understand what decisions today you're going to look back at 20 or 30 years from now with a sense of regret. And most people don't have a very good sense of regret. But you need to understand, like, I think it was Jerry Seinfeld, another, a third great modern philosopher from this episode, who said, self-control is empathy with your future self. Having self-control over your decisions today is understanding that you are going to be a person 10 or 20 years from now and you need to respect that person and be nice to that person. And if you think about that, you will eat differently,

you will exercise differently, you will spend your money differently if you can be nice to you 10 years in the future. That's understanding your sense of future regret. It's different for everybody. Jeff Bezos talked about the regret minimization framework is why he started Amazon. And he said back in 1994, if he started Amazon and it failed, he would not regret that. But if he didn't start it and never tried, he would regret that. Looking back at his life when he was 90 years old, as he said. And I think what's important about that is if I poured my life savings and all of my time into a startup and it failed, I would regret it. Like, I would regret.

Everybody has a different sense of regret. He wouldn't have, I would have. So there's no universal formula on what you're going to regret here. I think I've gotten a little bit better as I age. And I think this is true for most people, at understanding what I'm going to regret in the future. because what is making a bad decision feel like in the moment? It usually feels amazing. It usually feels like an incredible thing.

Because most of what you're going to regret are times when you kind of front-loaded future pleasure into today. Like you robbed it from the future. So eating cake and ice cream feels amazing, but you're robbing yourself of how you're going to feel an hour later or the next day or 30 years from now when you're overweight. And so I think over time, taking a step back and asking of the decisions that I do regret, How did it feel at the time? What can I learn from that? And have I gotten any better over time at understanding it, taking action today and avoiding actions today that I know I'm going to regret in the future? Another concept when it comes to spending money in a way that will redound to our well-being is, and this is the flip side of minimizing regret, it's the creation of positive memories. I think a lot of that. I forget who said that the purpose of life is to do things for which you are going to have nostalgia for. in the future. And I think that's quite a bit of it. There's the kind of stale, stereotypical advice

for money of don't spend your money on things, spend it on memories. And I think people can go and spend it on experiences, I should say. I think that can go astray because a lot of the time that people spend money on experiences, they're still doing it for performative reasons. They're still spending their money on this vacation, not because they really enjoyed that location or because they had a good time there, but because they know it's going to make a good Instagram picture. They know there's some sort of social clout in going to Bali and telling your friends that you did it is why you're doing it. So the idea of forming memories for most people, not everybody, but I think it's not uncommon that if you are an adult looking back at your life and I said, when did you form the best memories? Like what era of your life did you have the best memories?

A lot of people will tell you high school that that was an era when it was just carefree and you had a great group of friends and you were going to parties and you didn't have the responsibilities that you had later in life. those were the golden years, that was great. And a lot of the common denominator of people in high school is they don't have any money. They're broke. And so the idea of like forming good memories is not a financial thing whatsoever. For a lot of people, too, it's when their children were very young. When they had toddlers and young kids, those can be amazing years of core memories. And that too tends to be a time in your life when you don't have a lot of money. You're not sleeping very much. You're stressed out of your mind, but those form core memories too. So the needric reaction of what we think is going to form a great memory, expensive vacation, like, let's say, tends not necessarily

to be the case. I actually think in a lot of these instances, there's a negative correlation between how much money you're spending and how much time you have, how much joy and good memory you're going to take away from it. I'm just ticking down my list here. Another piece of advice that you give in the book, and it's kind of harkens back to something you said earlier in this conversation, is it's important to not link or hitch money to our identity, even the identity as a saver You described yourself as a saver, but there's a way in which if you have a fixed identity about your attitudes toward money, it can limit your range of options. Yeah, I think whenever in life you use the phrase, I am a blank. And it doesn't matter what the blank is, Democrat, Republican, saver. I am a blank. You've attached yourself to a tribal identity. And it's very difficult to break away from that and to think really rationally. You've kind of outsourced your critical thinking. to other people in the tribe. So if you talk to a lot of financial advisors, they'll tell you one of the

most critical problems and common problems that they face are people who have saved enough money for retirement. They've saved a million bucks for retirement and they're 65 years old. Congratulations, you won. And they cannot get that client to spend money and even the most responsible way. Because in that person's mind, I am a saver has become part of their identity. And for the previous 30 years, they saved money every month, every paycheck. And they saw their net worth go up every year. And the idea of ceasing that and going in the other direction and start spending that balance down is so antithetical to their identity, to their personality, that they've sacrificed so much to save this money and they can't spend it now. And so anytime in your

financial life, you say, I am a blank. And everyone says that you pointed out, I am a saver. And will it be hard for me once my peak earning years are over to turn that dial around and start spending it down? Yeah, yeah. This gets back to like, let's not pretend like, I've mastered this and I'm trying to impart the wisdom on you. Everybody suffers from this to some extent. And it's a difference between using money as a tool to live a better life versus something that controls you. And this is actually the part of the book where I profiled the Vanderbilts who were in their day, by far the richest family in the world. And I think virtually every single one of them was controlled by their money. It's like the money was just

the puppet master controlling their life. And it was this weird thing where they had more money than anyone else in the world, but nobody in the world was as beholden to their money and taken hostage to their money psychologically as the Vanderbilt. It told them where they could live, who they could socialize with, who they can marry, who they were allowed to be. They had no independence over their own psychology. And so whenever the money dictates your life rather than you using it as a tool, I think in those situations, money can be a financial asset, but it's a psychological liability. Yes, it's a financial asset on your balance sheet, but it's completely hijacked your identity and your thought process. And once that happens, it's very difficult for you to use it as a

tool to live a better life. Apropos of you being a saver, a friend of mine, Ricky, used a term recently, and hopefully I'm not going to mangle it, but he talked about recreational frugality. He loves to gamify his cheapness out in the world. You have a chapter. called the finer things, and would you talk about the upside and the downside of obsessing over small expenses? What should we know? I think what's important, and this is a great segue from the previous question of money hijacking your identity, if I can perfectly guess how much money you spend on certain topics, if you just tell me your salary, there's a good chance that you're not thinking independently. You're just spending your money in a way the society

tells you to do. And especially for people that are over a modest amount of income, there should be parts of your spending that don't make a lot of sense. You spend way less than average on this and way above average on that because you don't value this thing and you really value that thing. I got this concept from Rameet Setti. He was a great financial thinker, and author. And his version of this, if I'm remembering it correctly, he's done quite well for himself financially, but he's not a car guy. So I think he drives like an older Honda accord, but he loves clothes. He loves fashion and spends a fortune on fashion. That's the kind of mindset. Whatever your version of that, that should be. I'm not a wine drinker, and I've had people try to make me one. They'll be like, okay, you haven't tried the right one. Try this one. It's going to change your life, and I drink it, and it all tastes the same to me. And so I would never in a million years spend more than 10 or 12 bucks on a bottle of wine. There are other areas that I do spend more than other people on, even people who have the same income than I do, that I value even if they don't. And so the idea that there's no formula on how to do this, you have to figure it out for yourself. And if you're not,

you are not thinking independently unless there is something like that in your life where you're spending more than other people might think you should and less on other items than you're probably not thinking independently. Is it true that you recommend we should check our bank account daily and if so, why? Well, I think particularly for young people, it's the simplest activity that moves the needle the most financially. I think most poor financial outcomes are not because of lack of intelligence or even lack of of self-control. It's lack of awareness. And the majority of people, if you ask them right now, how much money do you make per month and how much money do you spend per month? And what is your net worth? The most basic questions you could think of in finance, the vast majority of people

couldn't tell you or would give you the wrong answer. It's just out of sight, out of mind. And so checking your bank account every day, it takes 10 seconds. It's the easiest thing you can do on your phone to just have a higher level of cognition of how much money's going in, how much money's going out. It's the easiest thing you could do to move the needle in the greatest degree. And if you don't do that, I mean, I think it's similar with food for a lot of people. If you ask people, how many calories did you

eat yesterday and how many calories did you burn yesterday? I have no clue whatsoever. This is why a lot of people don't have the health outcomes that they would want. It's not that they're making bad decisions, is that they don't even understand or are cognizant of the decisions that they're making. There's a lot of truth for that in finance. I think this is

apropos, because we're talking about checking, having some familiarity with the inflows and outflows of your personal balance sheet. You also, however, have a chapter called Spreadsheets Don't Care About Your Feelings. What's that about? Well, first started thinking about this when my wife and I bought our first house, we had an infant son. He was a couple months old at the time. And I think a lot of parents feel this, especially when they have their first kid, if not before. The feeling of I don't want to be a renter anymore.

I need to be a homeowner now, now that I'm a parent, was profound on us. And so we found this house on Zillow that was in the neighborhood that we wanted to live in. They were like, oh, that looks nice. Let's just go there. Oh, and there's an open house today. Let's visit just to get some information. We're not interested in buying it. We just want to go get some information about it.

And we pulled into the driveway. And my wife gasped, and she said, oh, my God, I love it. And I did too. And at that moment, the idea that we were just going to seek some information was completely out the door. This was an emotional decision. So we had an infant son, and there was a kid's tree swing. in the front yard and we were just like, oh, this is perfect. So the idea that finance is a spreadsheet endeavor, I think, is lying to yourself. Most of what finance is your retirement and sending your

kids to college and purchasing a house. That's the majority of what the financial industry is. And the idea that you can think about those as numbers rather than emotions and major life milestones is fooling yourself. So I think most good financial decisions are like half spreadsheet and half heart. One of the ways to phrase this is like, stop thinking that you can think rationally. We are not spreadsheets. We're not robots. We are all broken and imperfect and emotional and hormonal in our own special ways. I think the best you can aim for is to be reasonable with your financial decisions. Just be reasonable about it. Don't be unreasonable about it. But you can do things that don't make perfect sense on a spreadsheet, but they fill some part of your soul.

They're filling up some void that you have that you really like. Because when you're buying a house, it's not just mortgage payment, square footage. When you go to that house, you're envisioning what Christmas morning is going to look like. You're envisioning like backyard barbecues with your friends. That's not on spreadsheet anywhere. And it's a very real part of how the home buying process works. And so just being aware of that and accepting of that, that this is not a math game. This is a lifestyle game. And this is like a very key part of your identity and like scratching social issues that you have. That's really important. Your story about buying the house, very similar story. My wife and I pulled up the driveway of this house that we live in.

been now about five years ago and fell irrationally and wholeheartedly in love with it and just made a series of really stupid financial decisions as a consequence. And we still love it here, but this place is nearly killed us so many times. So I totally feel you on that. It's a very common story. So just a couple more questions. You and I both referenced repeatedly, our children, you also talk in the book about how to talk about money to your kids. What should we know? The first thing is that you don't need to sit them down and lecture them about money. Because whether you know it or not, they're paying attention. Every time that you as a parent have said, we can't afford this, or we need to buy more of that, or any time you make a snide comment about somebody else's finances

or about somebody else's spending decisions, they are paying attention and forming a mental model in their head. The closest example of this is politics. There's a lot of studies that will show that your political beliefs have an extremely high correlation to your father's political beliefs. That by and large, what your father believed is what had a profound impact on you. And it's specifically your father. And most of the time, parents don't sit their children down and tell them, this is why we vote the way that we do. It's not explicit. But every time that the parent made a snide comment about politicians. Every time that they were watching the news, every time that they made a comment about who they voted for, the kid paid attention to it. And over time, they formed this mental model

that can stick with them for life. Money is very similar to that. So I think the best you can do as a parent is lead by example and remember that they're always paying attention. And that actually, if you sit them down, particularly when they're teenagers, and try to lecture them on what the best thing to do is financially, they're probably going to rebel against that, as most teenagers would. If your parents trying to force wisdom upon you, they're going to push that away. And But all throughout your life, they're always paying attention to it. So that's something that I try to think about quite a bit. I think it's important to teach kids to the extent that you do,

not necessarily what money can do for you, but what money can't do for you. It's very common for young people, particularly in late teens, early 20s, that at that phase of life, they don't have a lot of job skills. They might not have a lot of humor. They might not have the ability to be a good partner. They haven't learned those skills yet. and it's very common in that young person's life to say, look, I can't gain my love from job skills or humor or wisdom. Maybe I can gain it through money. And so the appeal that money is the solution

to your problems and that money will make you who you are is very appealing to young people. It's the most appealing to young people because they don't have any other way to gain that love and attention and admiration in other endeavors. So I think if there is something to teach young people, it's, yes, good financial management and those kind of things. It's also what money cannot do for you. There's a long list of things that money can do for you. There is an even longer list of things that it cannot do for you. Final question. You had a great chapter title that I really agree with. And this is actually the one thing that I do lecture my son about. The luckier you are, the nicer you should be.

This is the last question. So I'm going to take the liberty of giving you a very long answer to this. And I'll tell you the story that led me to this idea. It's one of the coolest stories I've ever heard. It came from the actor Kevin Costner. And this was back in the 1980s when he was a big actor, but not yet an A-List celebrity. And he had a friend who was homeless and moved in with the Costner's. And the friend was a writer. And when he was homeless and moved in the Costner's basement, I think it was, he was writing a script. The friend was a writer.

And he's begging the Costner's, Kevin Costner and his wife, please read the script. It's so good. The script is the best thing I've ever read. Please read it. And Kevin and his wife, no, no, no, not going to read your script, not interested. you're lucky enough that we let you move in, not reading your script. This guy, I think, started trying to read the script to the Costa's children at the time because he thought it was so good.

And there was a moment when Kevin Costner's wife said, enough, he's out. And they sent this guy on his way. He was still homeless when they kicked him out. And after he moved out, he keeps calling Kevin. Have you read my script? Have you read my script? It's so good. It's so good.

I think Kevin Costner, as he tells a story out of a sense of desperation, get the friend to shut up, said, fine, I'll read your stupid script. and he went to where it was stored in his house, and he pulled it out, and the name of the script was dances with wolves, which, if you're not familiar, it became Kevin Gossner's blockbuster hit. And I think a takeaway from that is,

like, talent can come from anywhere. And there's too much association in the world of your worth as a person, and your talent as a person is equal to your net worth and equal to your income. It's a very flawed way to think about it. And I think there are so many people who have not figured out finances. They haven't figured out how to monetize their life yet,

but they're very talented. They're very funny. They're full of wisdom. They have a lot to offer. They make incredible friends. But the scorecard of, well, how much money do you make and what is your net worth becomes more important than anything. And so that's kind of the idea of I had of the luckier you are, the nicer you should be. I think the more money you make, the easier it is to tell yourself that rich people are good people. Rich people are the people who are worth letting into your life that you want to surround yourself with. I think it's a very flawed assumption.

And the only way to break out of that and to understand that everybody of all income have values to add in the world and benefits and joy to add to your life is the idea of the luckier you are, the nicer you should be. I did lie when I said it was my last question. I actually always end on two questions. One is, is there something you were hoping we would get to that we haven't? No, nothing comes to mind. This is a great conversation.

I agree. It was a great conversation. Second, can you remind everybody of the name of your new book, the book that preceded it, anything else you've made that you want us to know about? So I've written three books. My first book is called The Psychology of Money. I wrote another book called Same As Ever about behaviors that never change over time. And my latest book is called The Art of Spending Money.

Social's website. etc., etc. My social media drug of choice has become Twitter over time. I'm trying to wean myself from it. I don't know if I'm doing a very good job of it, but the books that I write is the vast majority of what I do, and I've kind of downloaded everything that I've learned over the last 20 years into those books. So if you're interested in more, that's the place to check it out. Awesome. Morgan, really appreciate your time. Always great to talk to you. Thank you. Thanks, Dan. This is fun. Thanks again to Morgan Housel. Always love talking to that guy. Don't forget to check out my new app,

10% with Dan Harris. and sign up at Dan Harris.com. There's a free 14-day trial. You're going to love it. Dan Harris.com join the party. Finally, I just want to say thank you to everybody who works so hard on this show. Our producers are Tara Anderson and Eleanor Vasili. Our recording and engineering is handled by the great folks over at Pod People.

Lauren Smith is our managing producer. Marissa Schneiderman is our senior producer. DJ Kashmir is our executive producer. And Nick Thorburn of the band Islands wrote our theme. Thank you.