The Psychology of Money [Morgan Housel]

Dated Jun 1, 2018; last modified on Mon, 05 Sep 2022

The Psychology of Money. Morgan Housel. www.collaborativefund.com . Jun 1, 2018.

People underestimate the role played by luck. Given \(N\) investors, if \(N\) is large enough, a couple of them will luck their way into billions.

But every investor seems to be doing due diligence. The successful ones will be more convinced that their methods really work.

Considering the amount of investing books out there, we should be seeing a lot more Warren Buffets in the world. But that’s not the case. A believer might say those investors just don’t want success enough - if they did, they’d make billions.

Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. Dear Son, I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.

Housel wrote the above letter to his son once he was born. I think it’s pretty neat.