morgan housel on danny miranda

Morgan Housel: Happiness, Fame, Reading, ChatGPT & Optimism | The Danny Miranda Podcast 299

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Key Takeaways

  • Ninety percent of virality is luck; Morgan Housel has been a full-time writer since 2007 and still does not have a great grasp on what will work and what will not
  • Writing is not just a way to communicate with other people, it is a way to clarify your own thoughts   
  • Behavior is a large component of money and finance; you can learn about money and finance by studying things that are seemingly unrelated to money and finance, such as World War II or the Apollo missions
  • How to choose what to read: Cast the widest net that you can, but have a very tight filter
  • If you want to get in touch with a person you admire, write them a short message that covers who you are, why you admire them, and if you can take them to coffee; do not write them a novel
  • Extremely successful people may be happy, but it is probably because they have good friends, a good spouse, happy kids, and good health 
  • The four keys to happiness, according to the late Tony Hsieh: progress in what you are pursuing, control over what you are doing, connections to other people, and being part of something bigger than yourself 
  • Doing something when someone else tells you to do it can be absolutely miserable, even if doing that exact same thing on your own accord feels great 
  • People do not want to ask other people questions because they are afraid to be told that they are doing it wrong 
  • Plan on the plan not going according to plan 
  • The first iteration of a new invention is often much worse than the status quo
  • Morgan Housel on ChatGPT: A combination of 80% human and 20% computer might be 5x better than what a human by itself could write
  • Try to be more introspective about yourself and realize that there is no one right answer 
  • People tend to know other people better than they know themselves; flip this around and you will make progress in life   

Intro 

  • Morgan Housel (@morganhousel) is the author of the best-selling book The Psychology of Money, which has sold over 2 million copies. He is also a partner at The Collaborative Fund 
  • In this conversation, Morgan Housel and Danny Miranda discuss why 90% of virality is luck, obsession, Morgan’s research process, choosing what to read, how to get in contact with your heroes, the downsides to fame, happiness, meaning, the pitfalls of FIRE, the psychology of money, innovation, ChatGPT, and why you are not special 
  • Check out these Podcast Notes from Morgan’s appearance on Modern Wisdom 
  • Host: Danny Miranda (@heydannymiranda)

The Ski Trip That Changed Morgan’s Life 

  • Morgan was a competitive skier growing up 
  • In 2001, he and two friends were skiing out of bounds at Squaw Valley and triggered a small avalanche
    • They were 17 years old at the time
  • The avalanche was only up to their knees and they safely made it to the bottom
  • His two friends wanted to do the run again, so they hiked back up the mountain while Morgan hung back 
  • This was the last time that Morgan saw his two friends; they were killed by a massive avalanche and found by search and rescue the following day
  • This experience taught Morgan about risk and the fragility of life 
  • Morgan Housel wrote about this in “Three Sides of Risk”, the is the most read and commented thing he has ever written 

Ninety-Percent of Virality Is Luck 

  • Morgan believes that 90% of virality is luck 
  • Morgan has been a full-time writer for 16 years and still does not have a great grasp on what will work and what will not 
  • There is an element of “luck” in most successful people and companies 
  • “Luck” is defined as the person doing something that was unintentional and they did not have much control over the outcome of it 
  • This 90-10 rule can be painful when there is a big investment in time; for example, a blog post that flops is not as painful as a book that flops 

Obsessed With Writing 

  • When reading, it is not obvious which sentences were easy for the writer and which ones she agonized over for days
  • Morgan enjoys the writing process, but it can be torturous 
  • Writing is not just a way to communicate with other people, it is a way to clarify your own thoughts 

Morgan Housel’s Research Process 

  • Starting out, Morgan knew his articles would be more compelling if he quoted people that were much smarter than he 
  • He heavily leaned on quotes as a new writer 
  • Naval strongly disagrees with quoting other people in your writing; he says to take their ideas and phrase them in your own words without plagiarizing 
  • You need to get people’s attention if you want your work to reach them 
  • Morgan uses stories to get people’s attention
  • Try to get the reader’s attention in the first five seconds that they interact with your content   
  • Behavior is a large component of money and finance; you can learn about finance and money by studying things that are seemingly unrelated to money and finance, such as World War II and the Apollo missions 

Choosing What To Read 

  • Cast the widest net that you can, but have a very tight filter      
  • Attempt to read every book that looks even slightly interesting to you, but stop reading it if it does not capture your attention very quickly 
  • People that say, “I don’t like to read” likely feel obligated to finish books that they do not like 
    • These books may be objectively bad, but they may not be for that specific person 
  • Morgan has quit books after reading the first paragraph
  • People don’t remember books, they remember sentences

Why Do Some Things Hit Us?

  • The “aha moment” happens when you intuitively know something to be true, but you have not yet put it into words  
  • You instantly know it to be true and you require zero energy expenditure to verify it as truth, hence the instantaneous reaction
  • A great sentence can take concepts kept in a person’s deep storage and put them into their RAM  

Morgan Starstruck by Jason Zweig 

  • Jason Zweig’s book Your Money and Your Brain  showed Morgan that there was so much more to money and finance than he thought 
  • Jason Zweig inspired Morgan Housel to be a finance writer

How To Get In Contact With Your Heroes

  • “I admire your work and want to take you out for coffee” had a 70% success rate for Morgan Housel 
  • The success rate is higher than you think if you simply reach out 
  • A short message that covers:
    • This is who I am 
    • This is why I admire you 
    • Take you out to coffee? 
  • Do not write them a novel about why you like and who you are
  • It means a lot to people when you respond to their cold outreach, and it can stick with them for a long time if you do not reply 

Downsides To Fame 

  • Given that about 1% of the population are complete nutjobs, if your blog post gets a million page views, then you have 10,000 nutjobs reading your blog post 
  • Those 10,000 nutjobs are also more inclined to reach out to you and tell you how stupid you are 
  • The hate gets louder as your platform scales 
  • As your platform grows, the positive emails you receive may stay the same, but the hate mail grows exponentially

Happiness & Meaning 

  • About 90% of your happiness comes from your relationship with your spouse, the health and happiness of your children, and your own health, according to Morgan
  • Going on the Tim Ferriss Show is great, but it should not crack the top 30 things in anyone’s life
  • It is easy to overestimate how certain things will make you happy
  • Julia Roberts won an Oscar and it was revealed that her husband cheated on her in the same week
    • Net, that’s the worst week you could possibly imagine
  • Extremely successful people may be happy, but it is probably because they have good friends, a good spouse, happy kids, and good health  
  • To ignore the career is not the message; your career is important, and hopefully, you enjoy your career  
  • Signaling via job titles and college degrees is not necessarily a bad thing because it can convey a lot of general information efficiently 
  • In Tony Hsieh’s book Delivering Happiness, he claimed there were four keys to happiness:
    • Progress in what you are pursuing
    • Control over what you are doing
    • Connections to other people
    • Being part of something bigger than yourself
  • It is easy to imagine a managing director at Goldman Sachs having none of these four keys to happiness 
  • For the majority of people, being able to control your time will probably bring them more happiness than having a $100M

Free Time Post-Retirement 

  • Controlling your time does not mean doing anything, it just means you get to do what you want to do 
  • Financial Independence Retire Early (FIRE) is not for everyone; financial independence is great, but the retire early part can lead to despair and loss of direction 
  • Doing something when someone else tells you to do it can be absolutely miserable, even if doing that exact same thing on your own accord feels great 

Raising Children 

  • Watching your child’s personality grow can be one of the most amazing parts of raising a child, but it can also be the most difficult to deal with 
  • It is astounding (and scary) when you realize your child has a life outside of you
  • For the first five years of parenting your child, you are like the CEO of a two-person startup that signs and sees every check that goes out the door; it turns into a thousand-person startup when they turn seven and you realize there is a lot going on behind the scenes that you do not know about 
  • The two phases of parenting are parenting and launching, which require entirely different skill-sets 

Curiosity 

  • The cliche that “you can learn something from everybody” is a cliche because it is true 
  • People do not want to ask other people questions because they are afraid to be told that they are doing it wrong 

Why Morgan Housel Reads Old Newspapers 

  • It is fascinating to read old newspapers when you know how the story ends
  • You can analyze what was overlooked, what they got right, how people were naive, etc.
  • Reading old newspapers will make you skeptical of forecasts; everybody is wrong all the time

Morgan Housel’s Money Rule 

  • Plan on the plan not going according to plan 
  • If you are only preparing for the risk that you can foresee, you are going to miss a surprise every single time 
  • A large portion of society is not prepared for risks that are guaranteed to occur, both financially and mentally   
  • Morgan believes that the level of savings you should have should feel “a bit excessive”; it only feels excessive when you know you are saving for a risk that you cannot envision 

Innovation  

  • Even if you are right about a trend, it is difficult to make money off of your being right 
  • The first iteration of a new invention is often much worse than the status quo
    • Horses were a far better transportation technology than the first iteration of the automobile
    • Trains and ships were much better than the first iteration of an airplane 

ChatGPT

  • “I need to get my next book out before I’m completely irrelevant and still have a job.” – Morgan Housel on ChatGPT 
  • ChatGPT will replace some writers 
  • Amazing writers that are not ashamed to use ChatGPT as a tool will create amazing content 
  • A combination of 80% human and 20% computer might be 5x better than what a human by itself could write, according to Morgan Housel
  • Using ChatGPT to distill information will probably be more useful than having it right for you 

You Are Not Special 

  • Following the success, it can be healthy to remind yourself that you are not that special 
  • You start doing sloppy work when you begin to think that you are special  

Challenge 

  • Morgan Housel’s challenge for the audience: Try to be more introspective about yourself and realize that there is no one right answer 
  • People look at the answer that worked for other people and erroneously assumes it will work for them 
  • People tend to know other people better than they know themselves; flip this around and you will make progress in life
The Danny Miranda Podcast : , , ,
Notes By Stan Rizzo

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