#707 - Morgan Housel - 9 Timeless Lessons About Human Psychology
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Hello, friends, welcome back to the show. My yesterday is Morgan housing. He's a partner at the collaboration fund, an investor and an author.

The world continues to change, but the hello epes, that inhabitant stayed the same. So there must be some laws of human psychology which remain true no matter what time and place you're in. And today we get to go through some of the most fascinating ones. Expect to learn the problem with the way most people make predictions.

Who exactly are the responsible optimists? Whether anyone was able to predict the great depression, just how different median income for families defers from the one thousand fifties to today, why trajectory is more important than your opposition, why stories are more powerful than statistics and much more. Morgan is an absolute beast.

This is his fourth time on the show, maybe fifth, but his first time in three years. And I do. This man I love is writing.

I've always love is writing. And there is so much cool stuff that we go through today. And his new book has twenty three lessons in IT, I think.

And we go through nine today, but he's coming out to see me in Austin in january. So you'll get another fourteen you'll get another fourteen uh, in twenty twenty four. But yeah, there's so much cool stuff to take away from today. Just sit back and enjoy this one. But now, ladies and gentleman, please welcome Morgan housel.

I got to to say, before we get started, your new book is absolutely phenomenal. IT feels like IT was written purposefully for me. Your ability to weave a story into a lesson is on godless, and everybody needs to go by same as ever right now. It's one of the best things that i've ride in a very long .

time that makes me so happy here. And maybe I was written for the show, maybe I wrote IT just for the episode right .

now that we're doing. Guess I knew that. I knew that. I knew he dedicated years of your life to just me. My only child, my inner only child, is coming out again also. So got to show the rangers going to the world series.

So I am wrapping, appropriately, the purpose of your books, same as ever as the kind of, as far as I can see, explained to people the underlying, uh, principles and rules like the thermal dynamics of life. That doesn't change. But a lot of the time people focus on things that they think won't change, but will. So what do most people get wrong when they making predictions?

Well, it's pretty well known that particularly in finance and economics, by so in politics, things like that, we're so bad at predicting, predicting the next recession, predicting when the stock markets going to fall, predicting who's going to win the election is not just bad. It's a special it's absolutely disastrous. And so i've been a financial writer for seventeen years.

And a big part of what I focused on is just trying to answer the question like why are we so bad at this? And why does nobody care that we're so bad at this despite the track, our people keep doing that over and over again. And one of the one of the ideas that I that I stumbled across was just the idea that and it's kind of ironic and tongue cheek, but it's not that we're bad at predicting.

It's that we're actually very good at predicting, except for the surprises. And the surprises are tend to be like virtually all that matter over time. And so part of me was when I just accept that how terrible we are at predicting, there's two, there's two things that you can do.

After that, you can become a grump about IT and just say they just become a cyc and say there's nothing we can do, nobody knows anything boh bug. Or you can say, okay, actually, are the things that never change that we put all of our weight into. And I think if you look over history, across any field in history, business, economics entertain medicine, politics, the themes that repeat themselves over and over again.

Once you start looking for them, they're everywhere and it's always like the change, but it's the same movie over and over again. And once you focus on that, and then you marry that with this idea that we can predict the change, nobody can, nobody y's ever been able to do IT nye be ever will be able to do IT, because they are all surprises. And then you marry that with him.

There's actually all these facts of human behavior that never change. All right? Let's put all of our emphasis and our new view of the future. Let's only focus on what we know is never gone to change. And there could be literally thousands of those bits of human behavior that never changed for the book. I focused on twenty three that I thought we're powerful to me, and I thought I had stories to tell about of these things that, like, look, regardless of what happens in the future, we know that these things are gonna be part of IT, regardless of which direction, which path we go down.

It's so interesting to think about the common thread that tires all of this together, being the idiot svan apes that kind of inhabited the world can be different. That can be a catastrophe or not. That can be peacetime or warm time, that can be depressions or IT can be the the greatest wealth creation period in history.

But ultimately, humans are always going to respond with the same fear and greed and envy and lack of altruism and focus on their own self. First I had another, you quote neil ferguson, at the start of the book, and I had him on a couple of weeks ago. I asked him just how accurate is the quote? History doesn't repeat itself, but often ryme.

And he called IT doubly wrong. He said, not only is IT not right, it's also not what mark twin said. So just in case anybody needed a final sort of nail in the cough in of that yeah, you've got this great code as well.

You say to know where we're going, you have to know where we've been. But the more realistic is admitting that if you know where we've been, you realized we have no idea where we're going. Events compound in unfavorable ways.

I mean, there are so many, there are so many little stories in history where you realize how fragile history is and whether it's the start of world war two or nine, eleven or covin, you realized that there would have been just a little tiny, know nothing change in circumstances that nobody paid any attention to, that would have uterine transformed everything.

One of the stories I tell him, the book came from David mccolo, who is a historian, died not too long ago, but he was one of the foremost authorities on the revolutionary war. And I know i'm i'm an american talking to a brit. This is going to get really .

awkward here for i'm an immigrant, this great ni two fourth of Julie, without getting into a next identity crisis.

I'm okay. Well, let's say bygones be bygones it's talk about the revolutionary war but there is a scene where David kos ys, there is a period in the revolutionary war where the the british had George washington cornered just outside lung island and all they had to do was sail up the east river in new york, and George washington would have been quartered IT all have been over, and but they couldn't do IT because the winds were blowing in the wrong direction last night.

They could not sail up the east river, which gave George washington just enough time to get away. And David color was asked. He said, if the winds were blowing in the other direction that night, would there be a united states of america? And he said, no, and never would happened, like the entire existence of this country relied on the winds blowing one direction this one night in the seventeen hundreds.

And if you take that out and you can tell similar stories about the start of world war one, world war two, the civil war. There's all these more you digg into IT. You realize how fragile history is, and then you have to accept if history is that fragile, what the future is too. There's going to be all these little know nothing, the equivalent of the wind blowing in the wrong direction that's happening today that will completely spiral into this god knows unknown story ten or twenty years into the future. And it's just a plea for humility, like when you piece together how fragile the past is, realized what we have, absolutely no clue some of the final details what's going to happen in the future.

Yeah, if you know where we've been, he realized we have no idea where we're going. Each big story could have been turned out differently if I had a few little puffs of nothingness going in the other direction. It's A I think people want to have a sense of control and certainty about the future, and it's disquieting to realize just how much random chance gets thrown into this.

And that kind of what a lot of people didn't like. The fact that neil said the cycles of history aren't read cycles. The only things that are the same of the humans, because IT makes us feel uncertain and we got, oh my god, maybe maybe i'm not going to be able to predict what happens next. He goes, well yeah previously could you have predicted what happened that what was that thing about um uh about the depression? Like how many people were able to predict the depression?

Zero, exactly zero people. Robert seller from elling university, when the mobile present economics, he devoted a big chunk of his career to working with economic historians to find one person who predicted the great depression. And they could find a couple people who would say, or look what you know, the economy is due to decline or do for recession, but who predicted the great depression, zero point zero people.

And of course, that was that was the biggest economic event of the century. And so and the people were pretty well informed back then. It's not that people were winning around a oblivious what was happy.

Everyone knew the stock market was crazy. Everyone knew things were stretched here. But the chain of events that actually turned the decline into the great depression could not have been for seen. I mean, the the bin not to not to go down too much for rabbit le here.

But what really made the great depression awful was the banking crisis IT wasn't the stock market crash IT wasn't n't necessarily the dust l IT was once the bank started fAiling all help workers. And the bacon crisis really began in austria when there is a big bank called credit on sot that went out of business. And you can literally track IT on a map that the banking wave spread across the world.

I went from austria to paris to london, and eventually made IT a way to new york, and then spread throughout the us. United states. And it's like, you can you can draw straight line from this austrian bank in one thousand thousand thirty one, going out a business to a guy in the middle of the ohio losing his job. It's not the kind of thing that somebody in nineteen twenty five could have predicted. IT was such a crazy chain of events that made IT all happen yeah.

you've got this nice formation. We are very good at predicting the future except for the surprises and and the next .

line of that was and the surprises tend to be all that matter over time. That tends to be like if you look at the big events that really move the needle in history for the last eighty years in the united states, at least it's perl harbor. September eleven covered those of the things that, like, we woke up one morning and we said, ocean, the world is not the same.

The world is not the same place that was yesterday and the common denominator of those three events, and you could add some more to IT or that nobody saw them coming there. Not there was no economic outlook a year before. That said, get ready for nine eleven.

Nobody wrote that in the year two thousand. I read in the book this crazy news cast that I came across, and it's from the morning of september eleven. And it's like hunting to listen to IT IT IT takes place about twenty minutes before the attack takes place.

And is this newcaster i'm going to paraphrase but he says, good morning. It's tuesday, pt, september eleven with a beautiful day here in new york city. And the side like she's completely a living to what's that to happen twenty minutes later, which of course, nobody could have seen IT coming.

And you can say with so much certainty that the biggest news story of the next year and the next five years, the next ten years, is something that nobody is talking about today that everyone's completely oblivious to because it's always been like that. It's always been like that. I mean, just in recent times, how many people a month ago we're talking about homos and and israel, the outside of that region? zero.

nobody. But now it's the biggest new story in the world saying with two years ago with russian and ukraine coffee, of course. C, there's a great quote from car Richard financial sor, he says risk is what has left over when you think you ve thought of everything.

So you go out of your way to try to view the future in your own life and in the economy. That's a great that's a good thing to do. And then after you have thought about all the rise in your life, the thing that you're not thinking about, the thing that's not on that list is one that's actually going to do the most damage .

because if IT was on the list, you would have mitigated IT in some way or another .

you'd prepare for IT mean, the perfect example that is y two k it's not that IT wasn't a risk, but everyone had been freaking out about IT for five years. So what would had happened when had prepared for IT? The computers have been changed, whatever IT was. So compare y 2k to nine eleven that nobody saw coming。 It's like it's nineteen day.

He was that not a guy. Who do to the helmet?

Yes, yes, I love that story.

Did is one of the best ones in the book.

So it's a crazy story that I came across as reading. I had this kick a couple years ago where I was really into studying the Apollo missions, because I think what going to the moon is the cool thing humans have ever done. It's like the crazy st.

The risky is the most, the most bossy. And I came across this little story is almost a footnote, but is one of those things where you read IT and you're like weight, tell me more about that. That sounds fascinating.

And what IT was is before NASA went into space on rockets, which were expensive and dangerous, they used to test a lot of their equipment on these ultra high altitude hot air balloons. Then these hot air balloons I could go up to, like one hundred and fifty thousand feet, like basically the edge of space, and they would do IT to test a lot of their equipment. So in july of thousand nine hundred sixty, there is A A U.

S. Air force test pilot, he was Victor thor, who took the higher er balloon up to about one hundred and twelve thousand feet to test nash new suit. He was a suit that they eventually used them in the german.

And he goes up, suit works great. Everything's perfect. He's head back down to earth. He starts to decending back down to earth. And one of the quarks of the suit that he was wearing, the space suit, was that is very hot and stuff y to breathe, particularly in in the floor of summer heat as she's descending back down to earth.

So when he was low enough to breathe on his own, just like five feet, he opened up the face, played on his helmet, just to catch some fresh air. Like, not, not that big deal. He knows he's low enough to breathe on his own.

Like, who cares? The plane a in that situation is that the hot I balloon would land on the back of an aircraft Carrier that was what they intended. But a very well known and well rehearsal plan beat is that he would land in the ocean because he was, he was just hard to stick the landing on this hot balloon.

And so that's what happens. He lands in the ocean. Noble's panicking in that situation. A an air force helicopter is going to hover over him, drop a rescue line that he attaches to himself and his pull of safety as he's doing that, he slips and he falls into the ocean. And that too, like, was not supposed be that big deal.

They had rehearsal, this one not, but because the suit that he was wearing supposed to be water tight and and bullion, he was supposed to bob in the water, but since he had opened up the face plate to his helmet, all said he was not water tight. And as soon as he hits the water, his suit fills up with water, and he thinks to the bottom, the ocean and draws. And there could be so many takeaway from the story.

One of them that I think is just the bunker is, is that there are four NASA astronauts who die in the mission, getting to the moon. All of them died on earth, which is just like crazy in itself. But the other that I think about a lot is that um NASA is the most planning centric organization that ever existed, like you don't go to the moon by crossing your fingers and hoping for the best.

Every image able risk that they can think of was planned out and they had plan A, B and c contingencies for how to mitigate that risk. And in the post mortem of what happened to Victor brothers when he drowned, they said something to the effective. We had thought of every single risk imaginable in this mission, except for the one thing that mattered most, which is that this poor guide just wanted to get some fresh air, and that I think that's the definition of risk.

It's what's left over when you think you've thought of everything. The other thing is that you can imagine the planners for this mission planning about what have I making the success? I am not an engineer.

What happens if the balloon pops? So happens if we run out of fuel, whatever, and I be, you're not going to play. What happens if this poor guy wants to catch some fresh air? right?

There is another story that I wrote about in the psychology of money that I thought I was just so ridiculous when I read IT was during the battle, stalling en grad in world war two. And there was a division of german tanks out on the rear lines, and they get called up to the front. And it's like twenty or thirty tanks, they get called up to the front battlelines.

All the tent commanders turned their tank on and off. It's a key button or whatever. And none of them start. The entire division of tanks of tanks don't start. And they start to research what the hell going on here.

And they realized that when the tanks were sitting in reserve, the field mice outside of stolen grad chewed through the wires. And then so they can. So I use this an example to have.

Like, imagine you're like an army general, and you're planning for what can go wrong. And what can go wrong is you get shot at, you get bombed, you run out of food. Nobody is like, hey, make sure that we protect ourselves from the mice in the fields, right? It's always a thing that you never see coming that's actually going to pose the biggest risk.

I wonder if those were especially trained .

subter mice, perhaps the soviet trained mice.

So given the fact that risk is what is left over after we think that we've thought of everything, what can we do about risk? What should our relationship with risk be like given that, as you say, I mean, do people become analytic and just stop caring about rik at all? Do people become a overly risk of us and try to stay clear of stuff? What do your relationship to risk like?

I do think there are some baLance between those two. I think the honest answer to your question is this is what the world is risky and it's always going to be risky and there is not much we can do about IT. I think that's that's the honest answers.

If there is a more technical answer that I think, particularly as a pertains to finance, is that if you are only planning for and saving for the risk that you can envision, by definition, you're gonna ss a surprise every single time. And so I I tend to have quite a bit of cash as a percentage of my network. And there have been a lot of people who would ask, like why? Like what are you saving for? And my answer is always, I don't know.

Because of course, if I was only planning for things that I can envision, oh, i'm going to need a new car here. My kids are going to go to college in you're always gna miss the equivalent of poor harbor nine eleven of IT every single time. So the amount of safety that you have, it's not to say, can be completely risk of ver, that's not the point at all. But the amount of cushion that you have should feel like it's too much because when he feels like too much.

you say should make you .

wins IT should make you wince a little bit yeah because IT like if IT feels like the right amount, then you know you're unprepared by definition.

And so that I just a metal lesson here or IT sounds like is bake in more contingency, a greater buffer around your current risk file to attempt as best you can to account for that which has been left over that you haven't been able to think of?

That's the only way to do IT. And the other thing to recognize is that the world usually breaks about once per decade, not exactly on that time eline, but pretty much once per decade. There's a big event where, like I say, that people wake up and they say the worlds not the same as as I used to be. So during that time when your savings makes you wince, you might have to sit on a winston amount of savings for a decade. But once a decade you're gna realize its the most valuable as that you've ever had in your life.

The first rule of happiness is low expectations. why? Because every every .

bit of happiness, every bit of joy that you're going to a get out of life is simply the gap between your expectations and your circumstances. And you can show this very cleanly by just pointing out things like john rocket fella. He was the richest man who ever lived. His a Justin inflation.

He was worth nearly half a million dollars in his time, but during his entire life, when he died in one thousand nine hundred and thirty three or their abouts, he never had pencil sunscreen, add value, to say nothing of the internet, or to beautification of any any, that he lived a life that the average ordinary american would look at today and view as positively primitive. Of course, he had mentions and servants and one that, but in terms of the technology he took advantage of, IT was a joke. But no average american should look at him today and say, I live Better than rockfalls because they have penicillin and sunscreen and evil because everything, all those new technologies just become the baseline that we accept.

And therefore that that's just to say, like you can go through a period of life or the economy in general where everything gets Better, technology gets Better, medicine gets Better, everyone becomes richer and nobody feels any Better off for IT because you just reset your expectations all along the way. And you could so imagine a world in which my grandkids are earning three times as much as me, adJusting for inflation, and they're not any happier whatsoever. And the medical, the technology that they have, let's just assume theyve cured cancer.

They've cured they they've cured every disease and they're not any happier for IT because that just becomes the norm, just like when I today. Bye large. Don't think about malaria. If you told somebody three years ago that we in the developed world had more less eradicated malaria, they could not father a world being that glorious.

Are you familiar? Are you familiar? The talk? val? Paradox.

of course. Yeah, yeah.

That's exactly what we're describing here. yeah. Living standard rise, people's expectations rise and then overtake the actual living standards.

That's IT. And at the micro level, IT happens to where you know if if you get if you get a raise at work. But then with that raise, you automatically adjust your expectation to the kind of house you need to live into, the kind of car that you drive, to, the kind of vacations that you take you instead.

That's why you get used to these things so quickly, is not clearly that you become accustomed to them. It's that you raise your baseline of what you expect in them. And so look, isn't important to try to increase your circumstances, become wealthy, increase your network course, the.

But with just as much emphasis, you need to go a way to manage your expectations to keep them low and recognize that it's the gap between those two that's actually going to bring you all the joy and happiness in life. So as a society, there's there's no way to do IT. It's always going to be the case that society y's expectations increases. That's the top of paradox at the individual level. I think you can at least recognize the game that's being played though and .

how ridiculous the game is. What's that? Is that a mongo quote where he says the world is actually driven by it's not driven by greedy, driven by envy.

It's and really what envy is, is you're looking at your neighbor who has a bigger house and saying I want that now that's all IT is, which is just it's just an adjustment of expectations. In one thousand nine hundred and fifties, which people tend to remember as this glorious period of prosperity, the average new house built was nine hundred and twenty square phy, and today in the eight states at twenty seven hundred square feet.

But people don't feel Better off, and I knowledges they not feel Better off. The people who are moving into a house that is two and a half times the size of what we, of what my grandparents would have moved into, probably feel like they are falling behind. Oh, my house is twenty seven hundred scoffed.

But on instagram, the guys houses ten thousand and graph y kind of thing. It's just a constant, the adjustment of expectations. Part of that, by the way, this is an important thing here is great. The fact that people are generally unsatisfied is where innovation comes from. The fact that people wake up in the morning and say i'm unsatisfied with my lot in life, I need to do Better and figure out a Better way is why the world improves. So it's not to say that this is bad, but it's an explanation for why there can be so much progress in your individual life or throughout all society and nobody feels any Better for IT.

Have I given you my bit on the first translation of the buddy if I given you this one yet?

No, no.

So um this is from Robert rights, why body's is true. And in IT, a life is suffering is commonly quoted as coming from the button. But scholars contest that the translation is actually wrong in the final word, which is duca.

D, U, K, K, A, J isn't translated as suffering, but unsatisfactory. S life is unsatisfactory. inss.

I often think about um this imaginary couple that I have a voice relationship with every time I think of this thing. So they plan a holiday, they know that they going to go away. And both of them are big into putting the right tiny together.

And they know exactly the hotel that they are going to go to. And they look at the menu of the hotel, of the hotel bar and of the restaurant that are going to go to, and they know the exact table they are going to sit on. They know that the sun sets, and you've imagined IT theyve thought about, and they ve organize the channel to look after the dog.

And then they fly out and they get there, they sit down, and then the wife sits down and she's facing the sun. But the sun's actually a little bit low and it's sort of plancon off the water, and it's is a little bit bright for her eyes. And they had got this cocktail, but they wish that they had got IT on the rocks instead of blended.

And there was some sand between her from walking on the beach a little bit early. Run life is unsatisfactory. Us IT is baked into your existence that things are just gonna on average of bitch, shit ter than you hope they would even if they out did your expectation very quickly, you're going to be looking over the current moments shoulder, just trying to see what's coming next one .

hundred percent and and Better way. I love the phrase just a bit shit ter than you expected. This was was a wonderful place.

I think a lot of this too, is that you get the most Dylan amine from the anticipation. It's not by actually achieving IT. You get the dopamine by dreaming about IT. So of course, is well known that the best part of a summer vacation is the anticipation of IT. But actually going .

on IT is not didn't far have a hack where he would humanest family would book like the next half decade of holidays. And pretty sure he did that. He would just be like, well, okay, if enjoyment is in the anticipation, if I get more anticipation, that means more enjoyment from the same experience. And i'm pretty sure that there was a period way he had, like five years of holidays and and resorts and trips and flights and everything else, buck, buck bucks out for precisely that reason.

That's so smart. I've had these ridiculous moments in the past. I'm sure others have something similar of i'll be on vacation.

I'll be in mari with my family and it's day one we just get there and standing on the balcony y watching the sunset and thinking to myself wouldn't be so great if we could come back here next year is like like even though I am literally right there, what gives me the most pleasure is thinking about coming back. And then I only have this recognition of just like this is so absurd, but that's how your brain works. Because thinking about coming back is going to give you more dopamine. Then actually, the fact that you're there in the .

moment does an interesting insight from god sadd new book on happiness that a the amount of sex that makes somebody happiest is an adequate amount based on kind of an overall baseline. But what's most important is that you're having a little bit more sex, that most of your friends are based on their self reporting. And you've got this phenomenal quote, which I think kind of summarizes where we're at.

There is no such thing as objective wealth. Everything is relative. And most relative to those around you, there is no such thing as objective. Wealth is phenomenal.

And IT is so true given the fact that, okay, are people today with all of the advantages that we have, one hundred years old hands Better off than jane rock fillet? Well, no one's going to say that. No working class american, the the delivery paycheck to paycheck is going to feel like them more blessed. What was once the richest man potentially who ever lived apart from what massimo, whatever that do was it's no one going to feel like that. And yet objectively, the arguments that you can have on both sides right now there.

as as most comedians do the'd really get to the point there, is a great Chris roxy, where he says, if bill gates woke up with Operas, money, he jump out the window and sled his race on the way down. And just to show that all all wealth is so and so I yeah once once it's framed like that, there's other quote from montescue who said three hundred years ago back to things that never changed.

He said, if you wish to be happy, that can very easily be achieved. But most people want to be happier than other people, and that is difficult because we all restin ate how happy other people are. So that's the thing too.

It's not about how much you have, it's just where do you sit on the relative lot. And from an evolutionary standpoint, of course, sets the case because we're competing against each other for resources and for mates. So of course, IT doesn't matter how much I have IT just matters that I have more than you. You are particular.

But now, so this must relate to fame and status as well beyond just finances.

Yeah, I forget who said this quote, but there's I read something recently that said it's so tragic that humans are not wired for happiness. They are wired for status. That's what we're going after. It's not what can I do to make me happier. It's what can I do that puts me ahead of the other people. And I think there there's actually a lot of people early on in their career that really get this wrong in the sense of they might have a skill i'm really good at microsoft office, yes. But so everybody else, like on relative terms, that means absolutely nothing.

And people over a they they over estimate that how rare their skills are and then they get to the job market and they their first salary sucks and they're not they're not that useful and they can't figure out out is because the skills that they have, everybody else has them to in relative terms of their zero. And so that's that's that's what you it's true in investing to or it's like IT doesn't matter if you have a lot of information. All that matters is the information that you have that others don't and and that number for most investors is zero.

The information that you have that others don't doesn't exist. There's no information that you have about the stock that others don't, and that's why it's so hard to beat the market over time. Everything is just relative to what other people happen, what other people are doing.

I've got this idea at the moment about trajectory being more important than position, and it's literally the same lesson. But from a status fame perspective. So if you are the number two in the world, but last year, one, number one, there is way less sexiness and climate around you. Then if you're number one hundred and fifty, but last year you were three hundred and there's something about a prediction engine being able to kind of move out.

Let's extrapolate into the future exactly where this person's going to end up and what they're going to do in this this sort of a lure of what's trendy someone else that's going on specifically with that, which is someone who is a an appreciating stock is opposed to a declining stock even if that absolute position is lower. IT tells you more about the current sentiment right now. And because our availability bias and the window of what we're seeing is so dependent on the moment we over index for the person who is on the limb but lower as opposed to the person whose maybe at the top but not staying, that this is a great .

way from Wilson ith and his biography, war. He says, becoming famous is the most amazing feeling in the world. Being famous is a mixed bag, and losing fame is a pain like you've never felt before.

And like, I think it's true for wealth too, that becoming wealthier, that your network rising is amazing. Being wealthy just having a high network k is like is okay and losing wealth is is terrible. It's always just the change in circumstances that you're after. Like you, like most people get more join pleasure out of gaining wealth and they do having wealth and they're going to be happier when it's going up and when .

they actually have IT. You weren't going to guess this, but Andrew tate said, IT best not one for quoting Andrew tape, but I do love this quote from him and he says. Having things isn't fun. Getting things is fun.

There's a great school from drake too, where he says, people respect you more when you are chasing something, not when you have IT so good .

yeah and I think .

that I think that applies to virtually everything. And I just a kind of boils down to isn't life just one big competition? We're just trying to get ahead, and it's kind of A A sad thing to come to terms with nothing. There are ways to combat that at the individual level and not always beyond rat race, but just enjoy what you have inside of your own head. But at, at, at the society level, IT has always been like that and always will be.

I'd mentioned before we started, I was with dumplings are in this weekend, and I rolled. This trajectory is more important than position thing to him, and he seemed to agree too. And I said, I wonder if there's an argument to be made that rapid changes in status and wealth and accurately and prestige are actually to be avoided almost at all costs because what you're doing is you're now resetting that baseline, as you mentioned.

That's so good. yeah. So i'm not like slow life strategy, but slow access strategy. Trying as best you can to just pulled pork this thing out a little bit. Let's just spread out.

You know, i'm not i'm not going to go get the car that i've always wanted immediately. Why don't I get a car that halfway between IT? You know, let's it's strange because we want success.

We don't want to leave anything on the table. We want to feel like we're actualizing. We want to maximize whatever we can bring to the world. And yet the quicker that we do that, all that we're really doing is condemning a future version of ourselves to have a higher bar to jump over.

right? I mean, the perfect example of that, everyone knows the long history of lottery winners either going bankrupt or being miserable afterwards. It's like, I know recently, because the lotteries now get ridiculous.

There was someone who is like a very modest blue color work and worker imagines person was making forty fifty thousand dollars year, and they want a billion dollars in the lottery. And that honestly, to go from making forty grand to getting a check for a billion dollars, it's gotta be the the biggest mind fuck that you can imagine. And I don't mean that in a good way. I think, I think, I think that that is is something that on net, it's it's ridiculous to say I know this sounds crazy, but on net, that's gonna, that's a psychological burden.

Could be IT could be one of the most difficult things that you've ever had to deal with your life. Yeah, right. I had this idea as well about guys like Jordan Peterson and bread weinstein and eric weinstein, you know, people who for a long time we have academics working in the dusty annuals of some place, and then they get ripped out of obscurity by some bold M.

M. A commentator. And before they know IT that, you know, heavily scrutinised and people care about what they think and all, my god, I need to comment on the ukraine and let's get involved in the trans issue like they had.

We often talk about the perils of fame too Young, but we never talk about the parts of fame too old, right? Like Young fame is you never got the chance to work out what it's like to be a Normal person. You turned my color. But like more old fame is you thought you knew who you are, and your sense of self has been completely ripped away from what you actually your your entire conception, the way that people see you, how much they care about, what you've got to say you, decades and decades and decades of time accumulated, also flying this version of you. You thought you were for something to come in and just smash IT to pieces in the space of no time at all.

just told IT. Oh, that's great. I I spoke with this author recently whose first book was a mega blockbuster success and a second book was, by any objective standards, a huge success. But in order of magnitude or two less lower than his first book that totally and I asked him how that felt and he said, um even though he knew that was gonna the case going into his second book, he knew that would be the case. IT is prepared for this and hurt and hurt because his first book set the bar so ridiculously high.

Have you got this in your mind given that the psychology of money your first book was I mean, you you're telling me that it's it's growing. It's like they are not. Number of your book is like cove IT on a bad day yeah have you got IT the same as ever despite the fact that everyone needs to go buy IT right now and the link is in the description below is almost certain ly going to be a disappointment to .

you yeah I I I think about a lot. And I was the one of the points of talking to that author who are speaking with, because I I know this is going to be my situation of, yeah, how do you prepare mentally when I I hope to write many books in my career, and I would bet very good money that the first book I wrote will buy an order of maggi de, be the bigger seller. It's it's kind of a hard thing to to repeat.

Of course, it's a good problem to have. Nobody feels bad for you. But yeah, that is kind of a hard thing. Like when i'm sixty six, how am I gonna feel knowing that I peaked at age thirty six when psychology money came out? It's probably, I gona feel that great, to be honest, but it's of all the problems to have.

It's it's not a bad one. yeah. Have you seen the Lewis KPI documentary? No Scottish guy heard this song one one hundred percent. One of your kids, all i've had this song on at some point.

Now you've heard d on the radio, billions and billions and billions of streams and albums or list of documentary about him, and he has to write second album, first album, just ridiculous success, right? Globe trotting insanity and IT songs that he wrote when he was seventeen, still playing them in working men's hubs around scotland, right? And it's Better mastering and studios know the rest of IT but it's the same songs and then he gets this catapulted to the top of the tree and then he's told, right, do IT again and coit happens so he's back in his parents house in scotland in this uh shed type thing that got his recording equipment and trying to right songs for the second album and he develops a twitch like a tred twitch um and it's these videos you can look at the videos is pretty uncomfortable to watch a hima glass and big festivals and he can sing like he literally can't get the words out because of how nervous he is.

So he's very much feeling the pressure, a man who has the talent but not the constitution to be famous, which I think is a beautiful, very interesting dichotomy. And he's got this one line in IT that I paused the documentary just turned IT off after that and went into l like a fever dream for about an hour, thinking about IT these there. And he's talking about all of this change and has been all of this chaos around him. And he's trying to write the second album, pressure from the label, and all of this sort of stuff need signs that the Cameron, he goes, fame doesn't change you. IT just change you, everybody around you.

Yeah, yeah. Oh my god.

Every time I say IT too, I get my the heads of my arms stand up because I just thought I was so profound and so beautiful. Uh, yeah, yeah, you should. What kind of netflix?

It's kind of scary. Because what do so many people, even if not explicit, but they implemented hope for and want in life IT rounds to fame at least, if not explicit, famous, what they want. And then you watch these people who've actually had IT, and there's a lot of baggage attached to IT.

And I really admire the people who went out of their way to push back or to quit the system. One is the actress Cameron D. S.

Mega, a list actress. And then he said, shedding, shedding acting now she's still famous. I'm sure the pop ali still counter.

And now you can't get rid of that. But for people who say I had enough, I achieve what I wanted to in this industry. And and here the other example, I don't know how to pronounce the bank's name IT was spelt G O I T E. And they had one mega hit in twenty twelve. I don't know how pronounced .

whatever is.

I think that's what is. And they had this mega, mega blockbuster hit in twenty twelve. It's all over the world.

It's like the top song and then they just quit. They said we're done like we're never going to top that. We're out here and I have so much respect for that. If you can actually pull IT off, it's the people who feel like they start with a mega blood bussard and then they have to top IT the next time that you are, you're guaranteeing yourself depression and misery. If if that's your goal.

you had this other bit. Could saying expectations are easy to ignore because their value isn't on a Price tag.

then we know what is the cost of a ferri. You can look at the Price and you know what the cost is. It's very easy to measure and put on a spread sheet and get with precision.

This is the cost of a ferrari. Not only is this the cost, but here's how much work you have to do to earn that much money. So it's very it's very quantifiable.

But what is the cost of high expectations? Most people are completely oblivious to them, and you can't really measure them with a lot of precision, but they are an enormous cost because they're weighing ing on your happiness. And so that's that's really what IT is and that's why they're so easy to ignore because they're not on a Price tag.

It's not quantifiable. How do I say like how do I quantify the fact that I have higher expectations for medical care than john y. rockefeller? How do you quantify that? You can. But it's very real. It's extremely real.

Yeah I i've got another one for you. Do so mean and George mac have been working on this for a while, hidden and observable metrics. And it's our contention that people trade hidden metrics for observer able metrics.

And it's mostly to do with the game fiction, the ability to track like how visual and how front of mind that is. But a good example of hidden metric would be the quality of the relationship with your significant other or at time is an odd d metric. It's kind of hidden ness is kind of not a piece of mind sanity, right?

Quality of sleep, uh, your ability to spend your attention where you wanted to be as opposed to being distracted, all of these things. Right, happily traded for a race, happily traded to change to a different job, which is twice the distance away. One of the biggest determines in someone's life happiness is the length of the commute, right? I learned that from JoNathan height.

Like, if you want to be happier, half of your commute, don't worry about the wage. And yeah, people will happily, well, i'm gonna spend an extra, you know, forty five minutes there, forty five minutes back, which means an I in half that i'm not going to spend with my wife. And that's gonna this amount of degradation of the amount of relationship satisfaction that we get. But twenty grand a or whatever, right? Hidden metric traded for an observable metric.

And in the fact that you can measure your salary down to the penny and only that, but I can compare mind to yours. So if if we're in a society where IT doesn't matter what I have, as long as I have more than you, I can measure that so cleanly. But what also matters to your life success, terms of the quality of your marriage, your ability to be a good parent, your own happiness, to sleep eight hours at night with a clear conscience, you those things are very hard to quantify, if not impossible to quantify, but they matter more. So I think it's I think all of that observable versus unobservable, that's what is, is just we're searching for something that's so easy to quantify and everything else that matters more, it's at aside at a mind.

George is trying to battle back against this by making the hidden e observable. So he's got some type form thing that populates a google sheet, his p autism and he puts in, at the end of the day, how many stars he was, did he wake up at this time? Did he do these things and tries to track correlation and basically tries to bring the hidden into the observable realm.

So he's forced to quantify that, which is usually just kind of like an a feal which he washed notion. It's like this ambient fucking sense behind the back of his head. So kind around this out. And I think it's a really, really important point. I'm so glad that you put IT in the book. Presumably there are two things that you can change, right, either your expectations of your circumstances, you can either reduce your expectations down or you can raise the quality of your life up on whatever metric IT is that your playing about with tactically. Have you found any way to reduce your expectations?

The only, the only thing that worked for me, I wrote about this in the psychology money, was this IT was an observation that I had when I was a valley at a five star hotel, mos angle stern college. And there would be all these people driving in in rose roses battles libertines. And I realized I was, like, twenty at the time.

But I realized that never once when somebody drove in in a lambo did I look at the driver and say, all that guy is so cool. What I did is, I imagine myself as a driver, and I thought if I was a driver, people would be looking at me and thinking that i'm cool. But IT was like, way, but I never do that for the joy I just imagine myself.

So then I was, nobody actually cares about the driver, but they want to to be the driver because they think people will then care about them. And I was just like, because what's you recognize that game? And the big takeaway is like, nobody is thinking about you as much as you are.

They're busy thinking about themselves. And when you realized that no one's paying any attention to the size your house or how nice your car is, nobody's paying attention to your clothes, nobody is paying attention to him as much as you are. Once you recognize that, then I think you're a desire to put out your peacock feathers like that diminishes not not to zero. It's not to say you should look at a slot, but it's not that in the slides. It's just when you realize that nobody nobody cares about your syncs, your circumstances as much as you do because you're busy worrying about themselves, then I think it's much easier to keep your expectations and check and be like, why do I want to spend money on this thing that's gonna me look Better when nobody dies, even paying attention to IT except maybe the people who who are like very close in my life, my spouse, my kids, my parents, who don't care about the clothes and morning, they love me for being me so that's like that realization for me was like, okay, look, i'd like nice homes and nice cars, but you recognize that game. I think you are ambition for those just peacock father's aspects of life goes .

way down wild minds. People who think about the world in unique ways you like also think about the world in unique ways you won't like.

I started this about this years ago when people were like, elon musk is kind of rude on twitter and he's saying the wrong things and he's not very polite to people. And like, of course, this is a guy who at age thirty, took on gm, ford and NASA at the same time and succeeded. Like, of course, he is not a well baLanced individual.

Of course he has his crazy courts and of course he thinks that the rules of society don't apply to him because that's what you like him for. The reason that people like an admired elon musk is because he doesn't think any other rules apply to him and he's willing to take these bunkers, bets on new technologies and new engineering. And with that, an unavoidable part in undeviating ble.

Part of that are these are these parts of the world where he thinks about the world differently than use in negative ways. And he can be a journey, different political views in people. And you cannot separate those two. You cannot have somebody who is a crazy at a box thinker in a positive way, and also dresses and speaks and looks in, is polite, like an average citizen. IT does not exist.

Every person who has outside success is gonna some traits in them that are that even even something like more in buffer is like the the best investor of all time came at the expense of time with his family and his kids. Like there's always most people hear this all the other day. Everybody adds up to the same number, but there's like different ways to get there.

And I think most people who are abNormally good at one thing are almost always abNormally bad at something else. Like like those numbers are going to even out in the end. So if you take somebody like mosque is, like off the charts, talented at engineering, retaking entrepreneurship, of course, he's gonna traits in which he is abNormally bad in equal parts to what he is good at.

I think there are so few exceptions to that actually think you look the closest that we've come to and a crazy thinker who looked and acted like a Normal C. E. O as bill gates. There are not many others who are like that where it's like he was this crazy, hard driving visionary, but he wore suit and said the right things on conference calls.

There are not many of people like that um even if you looked at mark's occa berg like he was one of the first tools like i'm i'm going to wear t shirts and genes and even that little thing was just like he didn't look the part of what he was supposed to be doing because this is like, I mean, to do my own way on my own person so for all of these people there are trades and and to be it's just a like be careful who you look up to because you cannot pick and choose the parts of people that you look up to. So you can't say this came from the wall. You can't say, I want his body and his mind and his wealth.

You got IT all comes with the same package. So if you look up to this person and say, I anna beat like that guy, well, you got ta take the full package. The good and the bad, they always come one .

in the same that in all sequence has inspired like probably ten blog posts for me. There's another one from Jason paragon, which is great, except all of your heroes are full of shit. Your heroes aren't gods that just regular people who probably good at one thing by neglecting literally everything else so, you know, target woods, go golfer, not a fantastic husband.

Uh, alan watts, life changing spiritual teacher, died of alcoholism early. James joice guide that wrote filling in wake in hulk, most of author, but also presume ously, a bunch of fat fetish love letters that he wrote to his wife got released. Like, you know, you might want to be the best golf or on the planet, but do you want to be chased down the driveway by your wife wielding a club that presumably you got for free from your sponsor?

Like you might want to have millions of people fall L A sleep to the things that you say in this beautiful british accent, but you wanna die early because of how much you drink. Or like you might want to write block bus and novels like gales and fin ng's wake. You want to have your animal thoughts about the different types of thoughts that come out of your wife while you have anal sex with her be released to the world upon your death?

Probably not. no.

Yeah, I guess you, I imagine that you would say, no.

I read a lot of biography, entrepreneurs, generals and press. Never once, not a single time, have I finished a biography. If someone who achieved these mountains height in life and said or thought I wish I could could live that life, and and the opposite is almost always sure.

The is usually at the end of the book is like, you achieved a lot. But that was, that was an insane life that I never, within one hundred miles of IT I just finished the kensington s documentary on earning stanway. And here's another, he was the author of the century and I think that's an exaggeration.

And his personal life was the most despicable, miserable in moral, uh, drunk in life, you can imagine. And of course, he ended by taking his own life, and but the finer details, what his data day life were like, nobody would look at that and say, that looks fun. IT is easier to glamorize the life of a writer, this big match o guy who loved bullfights, but like the actual love, like his love life, his family life is alcoholism.

His depression was terrible. IT was awful. And I also don't think that you can detach how good he was of a writer from that alcohol depression.

They were doing the same. He was driven by that. And he was he was that messed up mind IT was that pain in his head that created the good writing that we all enjoy.

What does that say that the people who we most admire are the ones who have the least admirable internal states.

I think that that was kind of the point of of the chapters and be careful who you look up to. And after that, I started trying to admire people in my life. I thought lived a good life.

But we're like, I mean, is is in the most polite way, like very average there like not not the celeBrant y not the billionaire entrepreneur, but who do I know who's just like, oh that that I is a good husband and a good dad and he's in good shape. He takes care of himself. He takes care of his family.

He's smart, he's educated, he's funny, and Lucy doesn't make that much money. Nobody knows who he is. But if let's leave that aside, the rest of his life looks amazing and is something that I want for myself.

I want to be a good human and I want to be a good dad. I want to take good care of myself. So like rather than looking up to the famous celebrity, look up to the guy across the street who nobody knows. Like that's actually who's closer to be your own model yeah .

the same personality traits that push people to the top also increase the odds of pushing them over the edge. And I found out that with both mutual fans of john boy, who, if you want to talk about extreme personalities that achieved stuff, this is a guy who actually wrote the book on fighter pilots for the U. S.

Efforts during a kind of a glory period, right, sort of forty through to eighties, which is kind of like this era of a fighter pilot. And he would smoke cigars. I think once there was a story that he just put his cigar out on one of his commanders ties.

this is an absolute monster. There are some story, I hope you getting some of these details wrong, but there is a story of he was in the barricks with his, with his his fellow air forceful, and the the heater wasn't good enough. He was in the middle winner, and they're all cold, and the army refused to put in new heart.

So he burned the barricks down. He put them on fire and burned the bedside, a protest. And there's there's all these scenes of like these little things that he would be in a meeting with his superiors, with generals, and he would, he would like, bite the call us office hands and spit IT across the table, just like he was just a monster of a human. But he was so talented at being a fighter pilot, and he was so good at figuring out the math of the certain speeds and the trajectories of how you wanted to be plain. But with that ridiculous talent came this personality that was impossible for people to .

put up with wild numbers. People don't want accuracy. They want certainty this .

great quote where Jerry sign fell, jimmie cml. Are driving in a car. And it's this old car.

It's like this old relic of a car like this, this old custom car. And Jimmy can will get there. And he says, he says, there's no see belts in here.

Does that bother you? And Jerry sinful says, no. But tell me the truth, how often your life have you actually needed to? Sept, and like, it's a joke. It's supposed to be funny, but in that is like the world is governed by odds. It's not black and White.

It's like like, of course, if there is a one one thousands of a percent chance you're going to need to sea belt your life you should wear every day people understand that, but would actually gets people like to pay attention in life is just whether you are right or wrong. And you see this a lot in investing where it's like, I think there's an eighty percent chance that this stock is going to go down. But then if if IT goes up, was was I wrong? Like no, and is not a black or White thing.

This happened in a big way during the twenty sixteen presidential election when nate silver, who is a very famous statistics, an who predict elections, he said that the odds were that Hillary clinton was going to win. And I think at the time, he said there's a seventy percent chance or eighty percent chance I have Collins going to win. Obviously, he did not win.

And so the next morning every headline was, net server was wrong, net server got wrong, makes over and blue is forecast and he was like, no, I said there's an eighty percent chance he is gna win, which implies there's a twenty percent chance that dropper is gonna in. Just because that's what happened doesn't mean he was wrong. But most people will not accept that form of thinking is black or White where you write or you were you wrong? And so that's like it's a big flow when people think about numbers in the world and data in statistics is that the world is governed by probabilities, but everybody thinks in just binary, yes or no, right or wrong.

And IT makes IT. It's really difficult to know who to pay attention to like you want to be paying attention to the naked severs who think about the world and probabilities and even when they are called and quote wrong, it's like it's actually really tough to tell whether that was like a bad call. He easily could have been right, like there is an eighty percent chance killer was gona win.

That was probably the right statistic, even if he didn't turn out to be how IT what happened in the real world. So the way that people think about numbers is is like screw up in all kinds of ways and which just makes IT. That's part of the reason that we're so bad at predicting markets. And politics is like the world is governed by probabilities, but we always think binary, right or wrong.

I think there's something seductive about a person who is able to speak in binaries and black and White as well because IT seems like certainty, which is a good proxy for expertise. And you don't actually know like if if everyone's just throwing shit at the wall and my shit sexier than your sheet, even if my sheet wrong, it's going to gain a more attention, right?

I see this online with you know other cultural commentators, people that do youtube in podcasts and stuff. I'm very i'm chronically uncertain of everything about and it's why I don't really make big proclamations about much that I don't have an area of expertise on. Didn't bother commenting on COVID, didn't bother commenting on ukraine, didn't bother commenting on israel because I don't think that the world needs more noise. IT needs more signal. An uneducated idiots like me who don't have specific knowledge within that domain giving cod psychology opinions about IT is precisely the problem that were trying to battle .

back against that. You had to post on twitter recently that was just about this for what's going on in israel, but you said, I don't I don't know enough to comment on the situation and I know there are a lot of people who took issue with that.

Well, how how can you not know more about this situation that you don't know more about? I I don't know IT is what IT is, but I think the world would be a much Better place if, uh, people that didn't know what they were talking about tried to not talk about the things they don't know about. We all get out over our skies, right? You know, that same thing I spoke about early run.

Like if you if you're someone who has a Young, medium or old age gone a little bit attention that why shouldn't why shouldn't I give my thoughts on epidemiology? Why shouldn't give my thoughts on the lability hypothesis? I don't want to know about my opinions on immigration. Very, very interesting.

When IT comes to productivity of focus or whatever the hell is, is talk about anything again with that this a seductiveness to fluency in particular but absolutely certainty to this guy called Peter ian real interesting guide geopolitics stood um and I don't know enough to be able to stress test his ideas, but I know one thing he's one of the most certain humans when IT comes to speaking the I ve ever heard and he came on the show and I found him very compelling. But I don't know much about what we going to do, go to dig into the fucking demography of china, be like, oh, actually I think it's not gonna six hundred and fifty million. It's gonna seven hundred and fifty like i'm not going to go do that right.

But I remember uh, thinking at the time while speaking to him and i've kept in touch with them, I think he is a very interesting dude, a wow, like this guy speaks with so much certainty, and he has the ament fans on the internet. I think he goes right back to what we said at the very beginning, which is people abhorr a vacuum and they abhor uncertainty. And if you can give them something that seems like order rangle out of chaos, uh, you, you, I allow me to become an Angeles st.

Like, you know, I will pray at the alter of the person who can tell me what's going to happen. Yeah, this is cold. How many fucking codes are like the world's gona end on the twenty first of december twenty twelve or whatever IT is? And that doesn't happen. But the certainty was so much there that the seduction continues even when the certainty was proven to be wrong.

Even when they are wrong is because what people actually want, they don't want the truth. They don't even want to accurate forecasts. They want to reduce the uncertainty that they exist in their head at this moment today.

And so even when the pundit is wrong, people don't care, because the ponant already did its job of reducing uncertainty when they went on T V last week. And so that's that's that's a big part of this. If you go on T, V and you say there's a twenty percent chance of a recession next year that will be in your last time on T V.

But if you say one hundred percent chance and it's gonna bad and it's going to affect these people in these industries, your phone will ring off the hook because you've just reduced uncertainty. Even if what you are professing is something that's pessimistic and is scary. If you say that was certainty, people like that who I want to pay attention to, I think a lot of religions are probably like this too. Like, like most religions don't say there's a twenty percent chance that haven't exists. This is exactly what's gonna happen with one hundred percent certainty.

And there's no bigger room. I debut and .

but but that IT reduces uncertainty when you know for certain exactly how the world works and what's going to happen in the future, what's going happen in the afterlife. There's a very comforting aspect to that that removes uncertainty that is so unpleasant .

to deal with in your head. What is IT about the sufficiently big sample size playing out thing that you talk about?

One of things that's always struck me is that since the end of world war two, and we've had pretty good economic data of like we track the economy with a lot of precision. There have been, I think, nine recessions, which is not that many like the symposium that are dealing with right now, is ridiculously small.

And if you wanted to really be an expert on economic history, you would, if you had like a wish from the gene, you would say, give me a hundred thousand years of apples to apples d's data that I can study the economy. Like, let me study the last ten thousand recessions. Of course, we don't have that.

We have good data on nine of them. All that were each that was caused by, like a very specific thing. So we really do for something as fundamental, like get important for society as recessions and economic growth.

The truth is we really don't know that much. We don't know what a really bad recession looks like. We don't know the peak of our of our potential or like how fast the economy can grow.

Our sympathizes is so limited. But since it's all we have and because it's still eighty years worth of data, IT seems like a long period time. It's very tempting to say the average recession last for eight months, whatever IT is. It's very tempting to say the average recession, unemployment goes to eight percent. But when you look at that average, what that average is like, there is so much else that could happen for good or bad, like the economy being way stronger than we think IT could be or way worse than we think IT could be once we realized that the day that we're looking at of economic history is so limited.

You talk about unfortunate odds and recklessness and kind of distinguishing between the two, I think.

retroactively.

even if we can see what I could in the past, it's so hard to try and work out the correlation. okay. Was, did these two things just happen together? Or did this thing actually caused this thing to happen? Was IT unfortunate odds? Was IT recklessness IT IT makes this entire situation really messy.

One I think about a lot is that in two thousand seven, I think IT was mark october's was offered a billion dollars for facebook, and he, of course, turned IT down. And we look at that were like, what a fricking genius he was, because now the company's worth the trillion dollars or whatever, like one of the smartest decisions that you could ever make.

Uh, but during that same time, yahoo was offered fifty billion dollars for microsoft and microsoft to buy yahoo. And yahoo turned IT down. And we look at that, and we're like, you idiots, like, of course, you should have taken IT because now I know what yahoo worked, but it's not within twenty BIOS of fifty billion dogs.

And so you look at that and like, what how do we know? Mark zuker d made a great decision and yahoo d didn't like like there's a such an easy world to imagine in which facebook was a flash in the pan and yahoo became the next google. You could easily imagine that world IT didn't happen, but IT easily could have happened.

So when we look at these retrolental decisions and say, uh, these retrospective decisions and say, look, Marks ago were so smart yo, who is so stupid? It's not that clear. Even if that's what actually happened, there are all these alternative histories that now I could have, but should have happened, that could have made that narrative so much different .

than IT is everyone's post talk rationalizing everything all the time. The more that i've dugger into personal growth and and development and being around successful people, the vast majority of what people are doing is I have found a particular strategy that resulted in success for me, would, given my idiosyncrasies and passively less resistance in genetic predisposition and up bringing in culture and timing and gender and all of that stuff, let me now create universal laws for everybody. That is a retrospective justification of how what I did that gave me success is something anyone can do that can give anyone success.

When, like, the irony is, like, the reason that you are successful is because IT only works. you. If that could work for everybody, everybody would do IT. And that skill wouldn't matter IT all anymore.

Like the whole reason that this person got successful is because nobody else could do that thing, that they're now trying to turn in to a universal law. So I think there are some things that we can learn from these, these major successes. Like you're looking at Warren buffet.

The traits that you want to learn from is like his patients, his endurance. But I I don't think you should learn his stocks picking skills because so many of those skills were honed in one thousand and fifty when this market was completely different than IT is today. So that's why you know one of the most famous investing books is the intelligent investor by Benjamin m, and was first written in the thousand nine hundred and thirties. And there is, of course, a lot of timeless wisdom in there, but there's also a lot in those books that is like hyper specific to the economy in the one thousand nine hundred and thirties, in the hundred and forties that if you try to implement those formulas today, you'd lose everything is IT was just relevant to that period of time, and it's not something that you can scale and to a universal law.

Best story wins. Stories are always more powerful than statistics. Why IT drives you .

crazy if you think the world is gonna govern by the right answer and the best answer and if I can just come up with the right answer, like that's what's change people's minds and it's almost never the case. It's always the case that what actually like gets people to, not their heads, is just whoever telling the best story, the most compelling story. And even if if the person is like, sounds to say that they are fooling people.

But if if you have the right answer and you're not a good storyteller, you may or may not get ahead. But if you have the right answer and you're a good storyteller, sky's the limit. That those are the people that really run with IT is so easy to discount the power of a good story because it's a soft skill like a lot of analytically minded people think, if I can just find the right answer in the spread sheet, I can just create the the product that works the best.

Everything else will take care of itself. And this is not how IT works. We were talking earlier.

I've write about this in the book, can burns, who I think is this absolute genius documentation filmmaker. And everything he's ever made is just ten, and ten is so good. And one of the things he does so well is incorporating music into his documentaries.

And he's talked about this before, where he will literally change the sentence structure of a script so that a specific word that the narrator is saying matches with a specific beat in the background music. The emotional word matches the emotional beat the same time. And no other filmmaker, no other historian is doing that.

Most historians have to say, if I have, if I find the right information in the, in the library like that, that's what I get present. And can burns is like. Now this is going to be a performance.

And because of that, I make this point that almost nothing can burns has ever published his new information he writes about. He's made films on the civil war and world war two, and the these are very heavily studied events. Everybody knows, everyone knows how the story is, but his magic is that he's the best storyteller that exists of any historian whose ever existed.

And because of that, when the civil war documentary came out in one thousand nine hundred and ninety can burn civil war documentary, more americans watched at that year than watched the super bowl. And this is an about, this is about an event, the civil war that everyone has been reading about since great school. There's no new information in the documentary, but the story telling is so captivating that IT IT moves nounce.

I think this is true for Michael Lewis too. Of there's there's been no Better business storyteller er in modern times and look with some what's come out recently like he doesn't necessarily always get the story right per say IT IT could be easy to criticism but this is just because i'm a writer. I I just finish going infinite. The book about F, T, X, and even if, yes, there are parts, like many other people, where I thought he was being unfair and supporting S, P F and ways that I didn't agree with, but his story telling is so good, his sentence structure is so good, he's writing is so poetic, that I will read IT all day long, no matter what IT comes out with, like the best stories is .

always gona win. I feel like that when I read all I do, the simplicity of your sentences, whether it's on your blog, collaborate, fund and is a useless that I subscribe to say sorry to whoever else writes for you because my first thing is I click if it's not got Morgan housel ten at the top I just ignore IT and only one third and i'm sure the rest of the right is really great but I just focus on you um yet the simplicity of your sentences, even some I guess you would you break convention in in your books, especially in the new one uh, single lines, three or four world lines that are paragraphs all on the .

road was very intentional and and the publishers don't like IT, but that's how I like to read. And I think it's I think what a lot of readers really want end of a book or what really makes me feel good is making progress. Then, like all I finished this chapter, I finished this level moving onto the next. And when you have when you turn the page and IT solid on intercepted block of text, it's very easy to be .

like a like what not.

But when it's quick when it's a quick line, it's a boom, boom, boom. It's much easier to a feel like you're making progress also is just an easier format to reading. You can just kind of breeze your eyes over the page and soaked IT up rather than like really dense, powerful reading.

So yeah, I think that structure is it's part of IT. And I yeah you're right that I don't think most readers think about the length of their structures or the the the the visibility of what the paragraph actually looks like like like like a block of text. But it's critically important to the the reading experience .

yeah your books have a particular robust to put downing ness like it's very difficult to put them down for precisely that reason. This a little bit more a little this story about fucking world or two like, let me get into that and yet for my news letter, I stole a bunch of ideas yourself James clear, uh, a rine holiday, even some of the conventions that he uses and the news that this is kind of and commonly done now.

But it's one sentence per paragraph with the smaller line breaks in between. And it's just. Straight through, super easy, very nice to read, tight margins. So yeah like stuff like that and we were talking before we started about the um story that I try and tell with these big productions that I do on the show. You know I want to we choose the location of these particular venues based on the guest that we're speaking to.

So you know, we have Patrick bet David coming on and he's kind of like a like A A power guy, like a power broker kind of guy, is like a mafia boss. So I wanted to a wall of books, right? We have an Andrew huberman coming on who's kind of this interesting blend of sort of science and precision with kind of like raw, masculine and kind of like grittiness like in terms of the way that he presents.

So he found this um beautiful warehouse with exposed wooden beams. So it's kind of got that wrong ness to IT but it's organic as well and IT feels IT sort of humanize IT or we do Peterson and we did him in the alumni santonio and it's got this sort of beautifully or nate um blinds behind him。 This sort of wooden blinds is casting this very particular kind of lighter.

So you know we're trying to do something to just create this little bit more uh of an event of an occasion. But you've told the right that you know many of us, me included, how many times have we felt resentment for somebody who we think has achieved success that they don't deserve because of the way that they look, because of something which is outside of the substance of what they're doing. You know all style, no substance is a mean for a reason.

And you know, with campongs, you could spend forever designing the sentences to hit debate of the the music can do all the rest, the stuff. But ultimately, the reason that IT works is because of the story yeah, that is then packaged in the way that's appropriate. And going back to what we were saying before about certainty, fluency is another thing.

You know, if you've got some beautiful ly fluent person, you've got this great story about modern lutha king, right? If you have someone who's unbelievably fluent, not forgetting that he went off script in his famous I have a dream speech, and he all, he gives himself a pattern break, right? He starts doing IT follow script, goes no. And then freestyles IT like that. The the fluency literally out did the rational, prescribed, well thought out arithmetic stuff.

The good the script that he and his speech rater wrote that day is what he started to speak from. And then there is a gospel singer in the crowd, a couple lines in front of them, who who is a friend of a marm with the king. And you can actually hear this in some of the videos.

At one point in in the speech, he turns around and he says, tell him about the dream, Martin, tell me about the dream. And you can really see this in the video. At that point, he takes his script on the podium and he moves up to the side, and then he looks up to the sky, and he starts saying, I have a dream.

And the rest of history, and he had actually practiced that I have a dream. So he was another speech that he had given before, but in the moment, I think he could a sense at the speech that he was prepared to give was not the best one that day, and that the gospel singer millia J. I was right that the I have a dreams that was the one he should have been doing, and he just started freewheel IT and became literally the most famous speech of modern history.

How are stories like leveraged? When you've got a complex topic?

It's like leverage because you can freeze more value out of them than you could get to get by just putting raw data on the table. So I mean, you can you know if I think I think a lot of entrepreneur s will think if I have a successful company, I need to come up with something brand new like the reinvent the wheel kind of thing.

And what times you don't you can take a preexisting product and just tell a Better story with IT like, boom, new york to the rice. That's great. And so there's once you realize how much leverage you can get out of a story or and how powerful story can be, you like the field of opportunities in front of you is endless because you don't need to come up with something brand new.

Can burns is is the ten thousands person to document world war two. But he did the best job of that because he he told the story, if kenn burn's had to find new history, find a new event that you've never heard of for his things, like, forget about that, you can do that. But if you can use a good story to leverage those order out there.

you can become the most famous story teller of your era. What's the complex bit? how? Why is IT? When a topic is complex? Stories are like leverage. Do they help to synthesize down confusion?

yeah. I mean, I think most people's tolerance for complexity is so limited. And everyone knows like a the dull professor who just talks in p values and is just like right and shorts and is so much like monotask.

And if you can switch that out with a good storyteller, like after the races, like there, there's so much you can do in there. So it's particularly in the complicated topics that are boring and dry and dull. This is why Richard fineman was such a genius.

He took physics, which is so boring and so dull for most people. But he can tell a story about IT. This is video online. You should people should search for IT.

It's he's explaining the physics of fire like like how does fire actually work and i'm not going to do IT anywhere near the justice but is like, imagine a tramplin with two bowling balls on IT and they are both like competing for space and they are running into each other. And when they running IT into each other, like they move around and he describing how molecules interact with each other that create fire. And I I didn't I didn't do the the the accurate job there. But when he doesn't you like, oh, that's so entertaining and by the way, I understand the physics of fire now in a way that if I just pulled out a physics textbook, I want to be like, so I don't understand IT and even I understand that .

this is so boring to read yeah, I like. And again, the best diet is the one you stick to. The best fitness plan is the one that you follow.

The best habit is the one that you're compliant with. Ultimately, in order to be able to get whatever the information is that you want across, you need to play the game using the rules. And the rules include all of the lack of attention and board m, and ease of distraction, and every else that humans ub, every wine.

Stein said this to me about in a stickiness arms race, the most sticky message is the one that wins, not necessarily the one which is most accurate. And you know, this is how cultural means take hold. Like I A friend mary, who says, mean first, explain later.

Which is why coming up with a name for something, a great name will retrofit the idea to the fucking name. I get the name, uh, because presuming, like if the idea is bolitics IT IT doesn't matter. It's the packaging in many regards and I think the story telling side but you know I still see inside of me that oh it's almost like A A purity, like a purism to like this is the way that IT should be done. IT should be. You shouldn't need to dress up the fact that should just be that the raw data and the fact that it's truth fall and on, baby, it's signo did like these things go to a be sexy Victoria secrets that even they are rolling back the change in branding from the last couple of years that the ting back towards sexus.

So very, very famous example from from Steve jobs of the ipod, where you could have called a digital M. P. Three player. But instead what Steve jobs said was a thousand songs in your pocket, but just a story.

And like further people who are just like, we don't need to dress up the technology IT IT should exist on its own. They would have called a digital M P three player, which is probably what SONY and panasonic did. And Steve jobs said, a thousand songs in your pocket, which everyone that can easily be like, oh, that sounds great. I love IT that that's what I want, is to such a brilliant era of story .

telling does not compute. The world is driven by forces that cannot be measured.

There are so many examples that when you're watching a group of people or an individual do something and you're like, why are you doing that makes no sense whatsoever. You should have quit long ago. You couldn't be doing, but they keep doing that.

And if you expect that every person is a rational thinker, and they're doing things that makes sense, that add up on the spread shit, you're going to go through life completely bamboozled at the number of people who. So I use this example in that chapter of during, at the end of world war I, the battle of the bulge, when the nations attacked the allies, there is a big, they made a big counter offensive. IT was a complete surprise to the allies.

They really never thought comment, which is why the the battle was such a big deal. And the reason they thought coming is because the U. S.

Generals, the like generals, thought there is no rational world in which the germans would counter attack right now. They don't have enough troops, they don't have enough supplies, they don't have enough fuel. The weather is atrocious.

The geography is not in their favor, so therefore we assume they are not an account tack. What they missed was that the germans were not rational thinkers at the time. Hilo was not a rational thinker.

He was completely out of his mind. And so because because the ally generals assumed that their opponent was rational, they miss what actually happened. That's why they were so vulnerable. So going through life, assuming is the same with market bubbles.

If you assume that people are rational with their money, like of course they're not, then you're gonna completely bamboozle when once a decade, there's a massive bubble and people like their money on fire and you can't figure out what's going on. Well, what's going on is like things just don't compute. There's a human element like the world is not govern by spreading tes. There's an emotional, hormonal human element that's a very hard to track, impossible to measure, but have some of the biggest outcomes in any of these activities in life.

Who whose arched hill archibold .

ill was his crazy. He was such a cool guy. He was a physiologist. About one hundred years ago, and he was a big runner. He was, he was an athlete. And because he was a physiologist and an athlete, he devoted a lot of his career to just trying to answer the question, how asking people run given, like given my body, given my a OPEC capacity or given your body, what's the theo theoretical limit on how fast we can run? And he came up with all of these formula.

He was kind of the early for, uh, a guy who came up with the two max, which which a lot of people are familiar with now to really measure, like how people process ox gen, how is dispersed to your body, the like tic acid build up in your legs. And he came up with a formula for how fast people can run. And he was very accurate.

So people like these athletes would come into his laboratory and he'd run his test, and he would say, you know, make them up. He'd say, jim, the faster you can run, a mile is six minutes and thirty two seconds. And you would go out on the track and give IT all he's got, and you d run IT in six minutes and thirty two seconds.

Like this formula was very accurate. And he actually won the nobel prize in medicine, I think, in one thousand nine hundred and twenty two. But there is a quark about IT in that his formula was never able to predict a race winner like in a competitive race. You could not use this formula and predict who is going to win the olympic medal in track. And I think this is kind of bother they they bothered a lot people in the field and bothered him as well that this formula was so accurate on the on the track, on the test track and had no accuracy in the real world.

And they eventually figured out what was going on here, which is that in a competitive race like the olympics, when the stakes are very high, people get nervous, they get excited, they get rushes of a general, they get all these other emotions that cannot be replicated on the test track when the stickers are low. That completely altered your performance. And therefore, like his whole takeaway, was your a obie capacity.

Your ability as a runner is not just about your machine, your body. It's your body within the context of all you're in the moment incentives and the the crazy hormones and feelings going through your head. It's those two things in combination that creates your actual capacity.

So I have is two of like if if you said the fastest you can run a mile is six minutes and thirty seconds and you say, like, I gave IT everything i've got, I can't do IT faster but then if I said, hey, if you can do IT in six minutes and thirty one seconds, i'll give you a million dollars, you'll figure out a way to do IT like, like once the incentives change, in the moment you become a completely different person. And and so I think that applies to a lot of things in life, and it's why things don't always compute. It's not just a spreadsheet have to figure out what's going through people's head.

So logic has its limits, and our ability to be rational and make predictions is always going to bounce up against things that unable to fit inside of the model always.

And IT drives people crazy. This is just like best story wens, where if, if you assume the world is governed by logic, you're going to be let to stray your entire life, because IT never is. Whether it's the germans deciding to attack when they shot IT or trying to predict athletes performance.

I I group as a ski resort that was my sport not a very popular sport in amErica but that's when I follow. And the greatest ski race now of all time is a woman from the united states name Michaela shift um and she's choose the greatest gear man or woman in history. She's absolute beast.

She's incredible. And SHE has a thing that SHE spoken about this publicly. It's not a secret that when the stakes are very high, like in the olympics of the word championships, SHE before the race will vomit.

And it's it's a thing SHE gets so nervous that her body just kind of gives up and obvious ly, that has a huge impact on like your hydration and your energy levels if you're throwing up before the races. And one of the takeaway is like mechano shift, erin on the test track on on when when she's training is not the same skier as he is in the olympics. Her entire mindset is utter ly different.

And even like the physical composition of her hydration is completely different, because when the stakes get high and people start getting nervous and emotional, they become completely different people. So you would think that her skin ability would just be like the strength of her core and her gilty flexibility. And it's not like ninety percent of IT. It's just what's going through her head in the moment.

Have a DJ friend who for a long time wanted to be on eric prizes label, very much idolized him. And then after a decade, a bit of working in producing, making songs, he ended up doing IT and now supports parades all around the world, is played medicine square garden new years eve shows with supporting erick. Is hello a projective thing?

There was a good chunk of time where he would throw up before he went on stage as well. And you know, you see him back stage and is just the super cool guys like sort of buff, like northeast and british food. And before you go up, because he did right, he had so much about what he was going to do. And you look at, you know, the component parts of this particular person's talent, go, you know, they like they are the function of this and this and say, yeah but what about the context and what about all of the other stuff the you can imagine thinking about um the crazy battle of the bulge and the insanity of have you ever looked into theatre morale that was his personal physician i've heard a lot .

about just because I know heller was drugged out of his mind, particularly in the last years of his .

life but I know many details about IT do if you if you come across the theater or um documentary, there's a few. Them on youtube are great. It's amazing this guy was a total quiet. He was injecting a hitter with bull semon um he was like on math, injecting him with cocaine like multiple times per day.

Does this really interesting interaction between hitler musli? And it's one of these turning points in the war and I think that hit the kind of goes really, really crazy and flies off the hand and all the rest of IT. Anna IT thought that morale had overdosed him with some drugs.

I often think about, you know, just how much of what happened. Obviously, heller, not internet. I'm not justifying hitler, but I do.

I shop this video? No.

I do sometimes think about how much of the the madness that we saw coming out of nazi germany was actually you due to one particular quacky physicians covered, and what he chose to do to the leader of the nc party.

And even for regular run of the mill soldiers, there's another thing where it's like it's impossible to know how you're onna react and bond until there's bullets flying over your head. There's no amount of training and preparation that's going .

to prepare you for no. Isn't there is some insane number of soldiers that went to was IT. Maybe vietnam's didn't fire or they were firing in the air. They were purposely not firing at the enemy.

I forget the exact percentage of IT without true in word war ii, where they could tell even the soldiers that were in front line combat, how many of them actually pointed the gun at the enemy and pulled the trigger, is a very low percentage. And I think I would be willing to bet that a lot of those people probably knew IT going into IT. I don't know if I could kill another human being by that. There are a lot of IT who went in with a lot of provoke and saying.

like i'm going to be.

get up with the toys and training and then you see the weight of the enemy's eyes and you realize it's just another kid just like you and I said, you say, I don't I don't know if I could do IT and who are you and I to say that we would not to do the same thing if you've never been in that situation? You have absolutely no idea.

Calm plants, the seeds of crazy. Crazy doesn't mean broken. Crazy is Normal. Beyond the point of crazy is Normal.

It's just this idea that the reason there are so much volatility in a lot of things in life for particularly the economy, the reason that we have boom and bus, the reason that we have recessions is because we have periods of calm. And when the economy is calm and people are really optimistic, they when they become optimistic, they go into debt because they are optimistic about their future.

Of course, I can pay off the dead once they go into a dead and they're optimistic. Go the economy comes unstable. Once economy is unstable, of course you're gona have a recession.

So it's a weird like in in a world in which there were no recessions, no bear markets. Stock market never goes down. That is the world that guarantees the next recession. Because if if if we pass a lot completely hypothetic, we pass a lot, the stock market cannot go down anymore. The stock mark, you can only go up.

The rational thing to do in that situation would be to mortgage your house and sell your furniture and buy as many stocks as you can because because they're guaranteed to go up there. Once you do that, the valuations go to the mood, stock crisis get bid up to the stratosphere. And once evaluations are that high, they're guaranteed to crash.

So this is like the irony of the reason that you have market crashes is because those periods of companies and calm always plans to seize ds of crazy. And it's so tempting to look at every booming bust, every bubble, every market crash and say, people were crazy like, who do we blame here? Like who screwed up? And let's think it's such a natural phenomenon and economies.

There was this economist back in the thousand nine hundred and sixty named hyman minsk I from university, said Lewis. And during the one thousand nine hundred and sixties, there is a big idea that we are gonna eradicate recessions. That was a big idea in economic circles.

And minsky basically said, it's all bullshit. That will never happen. And his his theory was called the financial instability hypothesis.

And he laid out what I just said, if there were no recessions, people would go into debt because are optimistic. Once they going to debt, the economy is unstable. Once economy is unstable, you're going to have a recession. So because of that, it's just like such a clean chain of events that you can never eradicate recessions. You can't eradicate boobs and bus because calm always plans a ceeon of crazy.

Yeah, you've got this idea about paranoia leads to success because IT keeps you on your toes. And I guess this is an an uncomfortable realization, that part of the reason that we are able to survive the chaos of the world is precisely the emotion that we are trying to mitigate, like our paranoia. A is the competitive advantage, which is keeping us going.

It's as irony of like people are super paranoid about their career or the business that they started. And if you were to sit them down on the therapy couch and say, why are you so paranoid? They say, because, like, I have this anxiety and I want to be successful because when i'm successful, I won't have the sankei ety anymore.

I need to become rich so I don't have to worry anymore. So they become super. They wake up scared every morning. And because of that, because they wake up scared and driven, they're onna become super successful.

And then once they get to some level of success, they say, now that i've made IT, I can relax because i've made IT, this is the whole point of getting rich with so that I could relax. And then once they relax, the thing that made them successful, which was the stress and paranoia, is gone, and that that plans the seeds of their demise. And you see that with so many companies, like companies, to get fat and happy and lazy, and they become the absolute top of their game.

And then they just become, they start to become oblivious and they start to lose IT. Sears is one of the best examples of, like we don't think about much today, but seas, which is a department store, was the biggest department store in the united states, similar to maces or something like that. And IT was the most dominant retailer, is probably ever existed.

I think serious in its heyday was more dominant than than one order target, anything like that. And now IT barely exists. IT still technically exists, but it's an absolute shell of its format self. And if you look at the history of here, that's really what IT was.

It's like one hundred years ago, they were scared and scrappy and made them so successful, and then they became so dominant that they has got lazy and and that, of course, let the their fall. Same with IBM, same with general motors, same with aig. It's like be careful what you wish for, for that because a lot of times the reason that you are so successful is because you have the straight that you are so eager to get rid of once you become successful. And once once that happens, like boom, it's all over.

There's another question, kind of the reverse of this is a question around if we sacrifice the thing that we want for the thing which you supposed to get IT, what the fuck are we doing? Like if we sacrifice happiness in order to be successful, so that when we are finally successful, we can allow ourselves to be happy. If this was an algy's a equation, and I just removed success from both sides of the equation, you would just be left with happiness, right? It's the parable of the mexican Fishermen.

like to say the exact same thing, but this is that this is an area where does not compute, entered the pitch because life is an algal equation. If if people just did the equation, what you just say to make perfect sense, and people would be the mexican Fisherman. But IT doesn't computer.

There's this element of because from what we are talking about earlier, like people's goal is not to become successful. It's become more successful than other people. So there's never gona come a point where people say, oh, i'm completely satisfied.

I can just sleep in and do some fishing and hang out my wife. It's always going to be. I have to get to the next level. I have to beat the next person next to me.

Yeah, does I seen in rick in where they play the game of roy? You heard of this, not see this is a super legends on youtube. It's a one minute long clip you can watch.

It's just record mody roy. It'll come up and it's a computer game where you play. Imagine life as this guy and he works as a carpet seller and multi goes and plays IT, and he's a football player.

And then he has a heart attack in a copt store. And then he goes back to the copt store and he comes out and rick says to him, never go back to the carpet store moti. And then he gets in and this crowd sort of gets around his VR thing and they say, oh my god, he's taken, uh, he's taken roy off grid.

Roy doesn't even have a social security number. And IT always makes me think about people that are playing the game and people who have somehow managed to break the thermodynamics of the game and the thermal dynamics of the game like A A good person that I think is, at least in part broken. Dum a ryan holiday, tim ferris, both come to mind.

really how so because I am not that close, but I know both those people so ryan appears .

to be someone who is purpose seoul's kind of like Cameron deas um reduce the trappings of fame ah ramped up simplicity is best account and he he'll have his demons and goblins ins and all the rest of IT right just like the rest of us and layers and layers and layers of of whatever self work to get to but IT seems to me like he purposively leads into doing simplicity like he has his routine.

He knows kind of where his his mission lies and that seems to work the same with tim that you know tim is largely taken of a pretty big step back from super public life. You know he's not guessing on terms of podcasts. IT doesn't seem like he's writing a book at the moment or at least he hasn't done for a little while, still does this show but even that it's not so much about the youtube and and the instagram stuff.

It's like his audience and he owns this part of of the audio stuff. You know, remember reading thirteen reasons not to get famous. One of my favorite ever. Close.

close. It's him. So great, it's so great. I take a bag.

I thought you're using those people as examples of people who got trapped in the fame. You you're using them as examples of the opposite. yes. yeah. I greet that tim post on thirteen reasons how to get famous will .

make your job job to it's great .

and you read there's nobody who read that and and disagree with what he saying. Like there is a massive downside of fame. I think once I want to speak for him, but I think once he experienced IT, he pushed back at, pushed back at in a pretty successful way .

yeah it's very interesting um but the paranoid leads to success because IT keeps you on your toes thing kind of also comes back to what we were saying earlier that um the people who we most admire, the ones who have the least admirable internal states, right? If you went to trade places with the texture of elon mosk kim caddesi, an economic greg his mind, you would probably not thought the bill for the Price that you'd have to pay. And again, hidden observable metrics. Again, this is why I love the the fact that these threads all tie together, even though that desperate ideas, there's a narrative that kind of weeks them all together and fundamentally, it's a stupid desire for recognition and accolade in prestige to be seen invalidated by the world and to be slightly higher than the people that are around us.

Does this idea I meant so early on, intergenerational competition theory, we od of this no so IT describes a situation where one of the biggest predictors of york quality of life, especially when you smear IT across an entire nation, is how does this generation compare to its parents generation at the stage of life? That it's that, and you, we hope it's been a bit of a metam in for a while, you know, like malene niels, with the first generation to not do Better than their parents, but really with J, Z, I think that that is being felt very, very closely. And even if the um raw facts and data when IT comes to cost of living minus inflation plus wages and all of the rest of IT, even if that kind event ds up not making too much difference the way that IT seems, i'm never going to be able to buy a house. People staying in the house of the most common living arrangement for a man and the thirty is still being at home with his parents right?

right. And I think I think social media plays such a massive role in this of just who you are comparing yourself too. Now is accurate algorithm, highlight real of the fake scenes and other people's lives, and that becomes your baseline to compare yourself against you.

And I see this in my own life, like when I was growing up, my definition of rich was the people who bought new pickup trucks and in a Normal person, drove a use pickup truck. And you compare that to the current generation that grew up with youtube and tiktok and instagram or not, their expectations are in a different universe compared to by generations. And and you're and your generation, and like, what is that gonna to their well being? There are psychological well being, you know, what's not going to be good? And the people who studied this, JoNathan height of n.

Yu, teenage depression and suicide, exploited when social media came out particular when I came out on mobile devices. Not not went up a little bit IT went vertical during those periods. And I still feel like we're probably in the early the early innings of that cycle. And so it's it's pretty scary, particularly as as a parent of two Young kids who are you know four and eight, what is their generation going to a be like when they're seventeen after they growing up influenced by social media such .

a profound way. What we've been able to facilitate is uh, industrial scale at scale comparison. Yes, that's fundamentally what so I think I think .

I think you could take a one step further and say industrial scale anxiety is what IT produces. Actually what I was, it's designed to make you look at other people. Yes, yeah, it's designed to make you look at other people and feel a little bit worse about your self.

I looked this study from finland this week using my news letter. The worked out the fifteen percent around about fifteen percent of the increase in Young female mental health adverse mental health outcomes can be attributed to uh, use of home mono birth control and i'd said this when I first learned about the impact of homo birth control on developing brains maybe about a year ago.

I just thought I got IT in the back of my mind, and I meant to tell JoNathan about IT because I don't know if anyone has like fact in the base rate of the increase in contracts. Tive pill use among Young teenage goals. So does a confluence of different things conspiring to try and and a damage the mental health of everybody. But um it's it's not good.

And you know from a comparison perspective, you think about yourself think about how you feel I call IT post content clarity like after you've spent a little bit of time on your phone, like, you know, if you watch one type of thing reading A B, reading a collaborate fund blog or something, and i'm like, oh like, you know, spent five minutes reading, reading this thing. What how do I feel after that? Do I want to ring my mom? I want to go outside.

Do I feel like the world is actually working with me? Is supposed to against me? Have I got agency? Or after I watch some panel argument about politics or something, I I wanted just you cut up in a ball and I want to eat shit food and I don't want to tell anyone that I miss them. You that very much is the duality of of the internet. And we always justify the toxic elements that we spend our time on by the needles in haystacks that we sometimes find, as my dad would say, a streak of peace in .

a pile of shit. Love IT. This is IT. I definitely feel like modern politics is explicit, designed to pissed you off. And once you realized that that's the game, it's like it's not a game that who would want to voluntarily play that game, you are guaranteed to wake up every morning and read your news. Upside of choice for to explicit, just make you a little bit angry. Or at the other half of the country, what's you frame IT like that and said, why would you voluntarily ily play that game? I'm going to chose to play a different game too much.

too soon, too fast. A good idea on steroid quickly becomes a terrible idea.

This is this idea of blitz scaling in startups, which is like, and look, they came from very successful entrepreneurs, uh, but it's this idea of like, however faster growing. Like do IT faster. Like like whatever good idea you have.

Like do IT ten times Better, ten times faster that go, go, go, go, go. And I think with blitz scaling, usually comes blitz fAiling. Like there's a natural rate at which anything in investing or business or life relationships should go.

And if you try to push IT pass that it's gna break, particularly do for relationships like like there there is a natural rating which you should go from meeting someone to marry that I have no idea what the natural rate is. There can be different for everyone. But the extent that you're trying to push IT further and faster than it's gonna, it's always going to lead to disappointing.

So I think just understanding the natural rate at which these things need to grow, to grow at and realizing that if you push them faster, it's all gona break is so important. It's important in investing where I say one time, the fastest way to get rich us to go slow because this that's what always gets people. It's always throws people off is like they get this investing strategy or they're y're good.

They're good at picking stocks, whoever is. And then their natural intuition is like, great. Now let's do IT faster.

I can learn ten percent of a year, like how do we to twenty I can earn to. How do we get to 4？ And that is gonna low, up ten times at a ten.

Like the natural rate of how fast you should grow your wealth for the huge majority of people is probably be between five and ten percent per year. That's the natural rate. And and you're a built you're willingness to push IT beyond that is eventually going to go over the Cliff.

And like if you stay in that zone and just keep IT going for your lifetime, you win you you win the game. You've got to compound your wealth. Everything's got everything going to be great. And it's a people who try to push IT beyond that, that are always going to end up as losers.

It's like that you don't hit the red button experiment like that. This is just one thing that you don't do. And I don't push IT beyond that.

And yet the blow of risk is always a hidden metric. Where's the additional ten percent gain that you've got last year? Is a very observable one whose whose Robert wadlow.

Robert rather was the tallest human to ever exist. He was I forget the exact number, but I think he was pushing eight feet tall. Um you doesn't up.

If you look at pictures of him, IT IT doesn't look like a human being. He looks like a cartoon. He was, he had a an abNormality in his patuit ory gland that just bomb barred his body with growth ormon for his entire life.

And what what I wrote about in the book is like, if you think about rob willow, he was eight feet tall. He were, I think, a size twenty two shoe. His hand was like, sixteen inches across.

You think of him as like the real life version of paul bunyan, like you would think he would be like a superhuman, just like the strongest man, the best athlete. And he wasn't. He would.

He could barely walk. He could. He could only walk on crushes. And when he did IT, he was like this horribly pain, the lip that he had, he was his super awkward walking around, because his body just didn't really work.

And the takeaway was that you can double the size of a human and expect double the output. If you double the size of the human, the entire thing breaks. And you look at this in nature, like most very large animals, either have extremely long, skinny legs like a giraffe, or very short, stubby legs like a anos us.

But if you take a human that has like medium length legs, and you to say, double the size of IT, IT doesn't work. And although he was growing, so what he died, I think in his late twice, he was very Young. And but the scientists and the doctors who are studying and said, if you grow much larger, simply walking, even with your cane, your legs are going to snap, because the mechanics of the human body just did not support a leg and weight ratio of that amount.

And what actually killed them is almost a strategic IT was so hard for his heart to pump throughout his enormous body that he had very, very high blood pressure, and that LED to an author and also got infected, and he died from the infection. So is actually such a tragic story. It's amazing.

It's like he's always in the ginneys bca d records and the like. He was a basically a circus freak during his day. But you read about this man is like it's a terrible, terrible, tragic life. But it's a starke's example of you can just about the size of something and expect double the output. Sometimes when you double the size.

the whole system collapses. Yeah, there's something about kind of the survival of the fist as well though you've got this example about how trees grow sometimes and rents get eaten eventually but then when you force growth too much, that's when IT goes wrong. There is definitely something about um I guess when the when the tide goes out, working out who's swiming naked, so to speak, I think that's a useful side, effective growth.

Yeah and and the same thing with rather rather than perfectly applies to companies. You can double the size of a company and expect you to get double the output because when you doubled the size of a company, particularly, that start up goes to employees, to one hundred employees is or whatever, all the sudden your employ culture is different, your hiring practices different, you need rules and regulations, you need employ handbook.

And that might completely kill the culture that made the start of successful from zero to twenty employees. So knowing the Normal growth and the natural size of any of these businesses is super important. Starbucks is another example using the book of like back fifteen years ago, he was on this ridiculous growth bench, and IT was just like, every street corner in the world needs not just one starbucks, but two.

And IT found that IT completely oversaturate, and IT completely killed the starbucks. Experience went through this depths of despair a couple of years around two thousand seven, where starbuck was really losing its way. And they found that like whatever the natural growth rate for starbucks was, and whenever the the right amount of stories that should have I went way far beyond that, I needed to pull way back. So all these examples of like successful companies, good companies that try to push you too hard and a backfires on them, those stories are everywhere.

What there any examples of how this is this would apply to people's personal lives, or the way that they show up in their data existence?

I think there's definitely a case. I use the example of travel's colonic, who is the founder of uber. And he later got pushed out the company as someone who he had the exact right personality and management, pho sophy, to bring uber from zero to one hundred.

And he was the exact worst person that you can imagine to bring uber from one hundred two, one thousand. And so there's a lot of times where your specific personality is going to work really well in this situation and be disastrous in another. And I think that we grow a different phases of your life if you are someone who is the life of every party, and you can drink people under the table and your loud and your boy stress.

That is an amazing personality when you're twenty one. If you are still, that person at forty seven is probably a disaster. That's not the personality.

You buy a large one at forty seven. So sometimes what works in one area that doesn't scale to other areas of your own life. And if you don't realize that you can't change course, it's a tough road for a lot of people.

I love IT Morgan houses. Ladies and gentleman, Morgan, you are one of my favorite writers. I'm so glad that we ve been able to get you back on. You're coming on again in january in .

genuine and i'm scared to see the the set design that you pick for me because now I know IT is a reflection. Is this going to be like some qt house that you bring me too? And I am going to feel really bad about who .

you think I am. Perhaps yeah, we'll have to wait and see. But no, I absolutely.

And once the book, actually, when when does he get released? November s november seventh, right? This will be out pretty much around about that.

Everybody needs to go by this book, Morgan household's first book. Psychology of money was a beast. And this next one is, is absolutely phenomenal. Why should they people got? Where else should they go to find out what you do and follow you?

I spent most my time on twitter. My handle is first and last name, Morgan housel. I also have a Young macit experimental podcast called the Morgan houses podcast and still plan around with IT allia Morgan.

I'll see you next year, next crip.