Points To Ponder

The fastest way to get rich is to go slow.

Nothing is more blinding than success caused by good fortune, because when you succeed without effort it’s easy to think, “I must be naturally talented.”

Social media makes more sense when you view it as a place people go to perform rather than a place to communicate.

Comedy is the best way to teach about human behavior. George Carlin, Chris Rock, and Jerry Seinfeld have done more to enlighten others than 99.9% of psychology PhDs.

The best measure of wealth is what you have minus what you want. (By this measure, some billionaires are broke.)

The most valuable personal finance asset is not needing to impress anyone.

Most financial debates are people with different time horizons talking over each other.

From school, I remember: Every good story I was told, but none of the formulas I memorized before a test.

“People like you more when you are working towards something, not when you have it.” - Drake

A lot of people seem to have a necessary level of stress, and when their life is going well they make up imaginary problems to fill the void.

Few things are as persuasive as your own baloney, while nothing is easier to identify than other people’s baloney.

Those we admire most in sports, business, politics, and entertainment tend to share one quality: They knew when it was time to quit, time to pass the baton, time to disappear, in a way that preserved, even enhanced, their reputation. Nothing diminishes past success like overstaying your welcome.

The hardest thing when studying history is that you know how the story ends, which makes it impossible to put yourself in people’s shoes and imagine what they were thinking or feeling in the past.

You can only ignore the critics if you also discount the praise.

Related: Few traits are as destructive as an appetite for praise.

There are two types of people: Those who want to know more and those who want to defend what they already know.

A lot of people like making money more than they enjoy having money. The change, not the accumulated amount, is the thrill.

Matt Damon says, “You retard socially and emotionally the moment you become famous. Your experience of the world is never the same.” The same may be true – and far more common – for those who become wealthy.

Most beliefs are self-validating. Angry people look for problems and find them everywhere, happy people seek out smiles and find them everywhere, pessimists look for trouble and find it everywhere. Brains are good at filtering inputs to focus on what you want to believe.

Few traits are as attractive as humility, but few are as common as vanity.

The market is rational but investors play different games and those games look irrational to people playing a different game.

A big problem with bubbles is the reflexive association between wealth and wisdom, so a bunch of crazy ideas are taken seriously because a temporarily rich person said it.

Logic doesn’t persuade people. Clarity, storytelling, and appealing to self-interest do.

You only know someone well if you can correctly predict how they will react in stressful situations.

Past performance increases confidence more than ability.

Happiness is the gap between expectations and reality, so the irony is that nothing is more pessimistic than someone full of optimism. They are bound to be disappointed.

In social fields, very few things are true all the time. “Too many theories try too hard to be laws,” says Carl von Clausewitz.

The most important decision most people will ever make is whether, when, and whom to marry. But that topic is never taught in school. It can’t be – everyone’s different, and you can’t reduce it to a formula or a statistic.

I’ve often wondered how many personal bankruptcies and financial troubles were caused by spending that brought no joy to begin with. It’s a double loss: not only are you in trouble, but you didn’t even have fun getting there.

Nothing leads to success like unshakable faith in one big idea, and nothing sets the seeds of your downfall like an unshakable faith to one big idea.

The bust is only dangerous if you depend on the boom.

“Reality will pay you back in equal proportion to your delusion.” - Will Smith

Every five to seven years people forget that recessions occur every five to seven years.

Many people check their portfolios every day but their blood pressure every few years, if even that.

The pessimists can be wrong if just a few big things go right.

The most important communication skill is knowing when to be quiet.

“It’s good to have people in your life who you don’t want to disappoint.” - Buffett

Not caring about temporary things, and caring very much permanent things, is underrated.

Lots of things are factually true but contextually nonsense.

Economies run in cycles but people forecast in straight lines.

You are twice as gullible as you think you are – four times if you disagree with that statement.

Price is what you pay, value is whatever you want Excel to say.

“Men resist randomness, markets resist prophecy.” - Maggie Mahar

People tend to be obsessed with harm posed by others (terrorism, crime) while oblivious to much greater self-inflicted harms (poor diet, no exercise).

We underestimate the importance of control. Camping is fun, even when you’re cold. Being homeless is miserable, even when you’re warm.

So much of what people call “conviction” is actually a willful disregard for facts that might change their minds.

In school they tell you your paper must be a minimum of five pages long. In the real world you have five seconds to catch someone’s attention before they’re bored and move on.

“Learn enough from history to respect one another’s delusions.” - Will + Ariel Durant

There is an “ideal” net worth for everyone, when money not only stops bringing pleasure but becomes a social liability.

“If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.” - Montesquieu

With the right incentives, people can be led to believe and defend almost anything.

Good marketing wins in the short run and good products win in the long run.

“Judge talent at its best and character at its worst.” - Lord Acton

Net worth goes from $0 to $1 million: Ecstasy. Net worth goes from $10 million to $1 million: Despondency. Can we agree that all wealth is relative?

Three legal investment strategies: Be smarter than others, have more mazel than others, be more patient than others. That’s the whole list.

The most productive hour of your day often looks the laziest. Good ideas rarely come during meetings – they come while going for a walk, or sitting on the couch, or taking a shower.

Nothing destroys relationships – in love and careers – like being needy.

Schools are good at measuring intelligence but not great at measuring passion, endurance, and character, which tend to be more important than intelligence in the long run.

The majority of what you know comes from the experiences you’ve had and the people you’ve met, both of which are largely out of your control.

Average performance sustained for an above-average period of time leads to extraordinary performance. This is true not just in investing but careers, relationships, and parenting.

The same traits needed for huge success are the same traits that increase the odds of failure. We should be careful praising winners or criticizing failures, because they often made similar decisions with different degrees of success.

Vaccines can be amazing at one point in time but lose effectiveness as the virus they were targeting adapts and evolves into something new. The same is true for business and investing strategies: What works wonders in one era might flop the next as the world evolves.

A good test when reading the news is to constantly ask, “Will I still care about this story in a year? Two years? Five years?”

A good bet in economics: the past wasn’t as good as you remember, the present isn’t as bad as you think, and the future will be better than you anticipate.




Morgan Housel