The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness by Morgan Housel

Takeaways and notes from the book:

Voltaire’s observation: “history never repeats itself; man always does.“ The lowest income households in the United States on average spend $412 a year on lotto tickets, four times the amount of those in the highest income groups. 40% of Americans cannot come up with $400 in an emergency. Which is to say: Those buying $400 in lottery tickets are by and large the same people who say they can’t come up with $400 in an emergency.

Years ago I asked economist Robert Schiller, who won the Nobel prize in economics what do you want to know about investing that we can’t know? “The exact role of luck and successful outcomes,“ he answered.

The difficulty in identifying what is luck, what is skill, and what is risk is one of the biggest problems we face when trying to learn about the best way to manage money.

What Gupta and Madoff did is something different. They already had everything: unimaginable wealth, prestige, power, freedom. And they threw it all away because they wanted more. They had no sense of enough.

Reputation is invaluable. Freedom and independence are invaluable. Family and friends are invaluable. Being loved by those who you want to love you is invaluable. Happiness is invaluable.

Good investing is not necessarily about making good decisions. It’s about consistently not screwing up.

At the Berkshire Hathaway shareholder meeting in 2013 Warren Buffett said he’s owned 400 to 500 stocks during his life and made most of his money on 10 of them. Charlie Munger followed up: “If you remove just a few of Berkshire‘s top investments, its long-term track record is pretty average.“

The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.“

Controlling your time is the highest dividend money pays.

No one is impressed with your possessions as much as you are.

Savings in the bank that earn 0% interest might actually generate an extraordinary return if they give you the flexibility to take a job with a lower salary but more purpose, or wait for investment opportunities that come when those without flexibility turn desperate.

Having more control over your time and options is becoming one of the most valuable currencies in the world.

The most important driver of anything tied to money is the stories people tell themselves and the preferences they have for goods and services. Those things don’t tend to sit still. They change with culture and generation. They’re always changing and always will.

History can be a misleading guide to the future of the economy and stock market because it doesn’t account for structural changes that are relevant to today’s world.

The most important part of every plan is planning on your plan not going according to plan.

German tanks at Stalingrad – – field mice had nested inside the vehicles and eaten away installations covering the electrical systems. (No one had planned for this risk, hence German tanks were inoperative.)

The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true.

Manage your money in a way that helps you sleep at night. Use money to gain control over your time.

Effectively all of our net worth is a house, a checking account and some Vanguard index funds. One of my deeply held investing beliefs is that there is little correlation between investment effort and investment results. The reason is because the world is driven by tales – – a few variables account for the majority of returns. (Author describing his financial management.)

Sturm und Drang

Words that never were true
Spoken to help nobody but you
Words with lies inside
But small enough to hide
‘Til your playin’ was through
Words The Monkees

Lately I feel like I resemble this remark by the satirist Mort Sahl: “a very likable guy who makes ex-friends easily.”

(8/10/2021: Text conversation between S and I on her invite for me to join a birthday party for two members in a private pickleball group called Kilmer)

(About an hour later, I receive this text…)

S: Hey Eric, I see you haven’t joined Kilmer yet. We are celebrating Pete’s birthday and Dave’s on Wednesday if interested in joining.

Me: I will stop by and I will bring some snacks for the party. Thanks again for the invite and I’ll see you tomorrow night. I was thinking about soft pretzels and some chocolates. But I will defer to you if I should bring something else.

S:That’s perfect! Very sweet of you. Don’t bring too much. It’s your first time coming and you are also our guest.

(Minutes later, I receive this text from S, rescinding the invitation)

S: Hi Eric, I circumvented our system and didn’t check first with everyone which is our usual policy. Pls hold off. I’m sorry.

(Since I was “disinvited,” I tried to handle this as gracefully as I could. I felt bad for S. I knew she wasn’t behind the disinvite.)

Me: Thanks again for the invitation to join. But I am going to take my name off the list. I sense that there could be an “issue“ and I do not wish to upset the dynamics of a very good group. I will see all of you at various meet ups and look forward to playing with all of you then. I will wish Pete and Dave a happy birthday the next time that I see them.

S: If things change please let me know. It would be really great to have you.

(In October 2021, a party was scheduled at the pickleball courts where I host Meet-ups. I am declining an invitation to the party and am addressing my text to the individual who was responsible for my invitation to the August birthday party being rescinded.)

P., “Thanks for your invite to the Kilmer Halloween party but I regretfully decline. In August, S. had invited me to a birthday party for Pete and Dave. Since I am friendly with just about all of the Kilmer group, I accepted. I discussed with S. what to bring and I looked forward to the get together. Unfortunately S. contacted me later and apologetically asked me not to come as there was an issue with me being invited. I was disappointed but I did not want S. to feel more awkward so I told her I would not go. I did wish Pete and Dave Happy Birthdays when I saw them on the courts.

It’s a shame that someone in the group felt to exclude me. Besides the competition in Pickleball, what may be most important are the social connections and friendships we develop in the sport. I try to make and keep as many friendships as I can.

Because of the disappointment I felt at missing the earlier Kilmer party and not wanting to risk being told at the gate for the Halloween party that I am not welcomed, I decline your invitation.

I hope your party goes well and the attendees have a great time…”

(Text by P to the community Pickleball Group where both she and I belong. She admits to being the person who did not want me at the party and she attempts to explain why.)

P: I was uncomfortable about Eric attending the party at Kilmer because of comments directed at me during River Road meetups, which I kept private. Air cleared.

(I had asked her why I was denied entry to the party after being invited. I already knew she was responsible.)

P: Eric, you’d fear entry to the party would be denied? How dare you say or anyone believe this disparaging remark aimed at people you play with at RR (including my Tuesday meetup) Hainesport, & Jeff Young every week. This feeble ploy to gain sympathy should be above you.

(Turns out I was not invited to a surprise party for P in March 2022. I was disappointed I was not invited but I was angered to find out that I was deliberately excluded. As far as I knew I had very good relations with the rest of the Kilmer Group except P., who I thought I was rebuilding a past friendship with.)

( I was friendly with F. She was a member of the Kilmer Group and I enjoyed our conversations and playing pickleball together. There was an issue with the RR pickleball courts and she seemed upset with me on how I handled it. I sent her a text explaining my rationale and I included this wish below…)

Me: Don’t want to lose your friendship.

A few days after I sent the text, I noticed that she had unfriended me on Facebook. Recently I saw F on the pickleball courts. Maybe my imagination, but she seemed to be avoiding me. However later we wound up partnered in a game. After the game ended, we had this brief conversation:

Me: F, why did you unfriend me on Facebook?
F: I don’t know what you are talking about. I did not unfriend you.
Me: (Showing her Facebook profile on my iPhone) It now says ‘Add Friend.” You deleted me. I just wanted to know why. You can leave our friendship but please don’t lie to me.

F denied that she did anything but her denials were hollow.

There are lies that may hurt my feelings and then there are lies that also insult my intelligence. While I am disappointed by the first lie, I am enraged by the second. So if you are going to take the opportunity to lie to me, at least do me the favor of taking the time to make your lie a plausible one.



She was Circe to my Odysseus. And like Odysseus, I resisted the siren’s call…


If there is no honesty, loyalty and trust in a friendship, there is no friendship.

Deceit is hurtful; from those we considered friends, devastating.

Hurricane Vignettes

My first cruise was on the Disney Magic out of Orlando in 1999. I was somewhat apprehensive about sailing anyway and when I saw that a hurricane was brewing close to our itinerary, I became more fearful. I was assured by a Disney representative that the ship would sail away from the storm. Turned out the ship sailed right through the storm. For about 12 hours, I was on a ship that sailed through 80 MPH winds, rough seas and pitched violently. Torrents of water cascaded down the elevator shaft. I could not sleep and spent time trying to comfort a young mother with children in the lobby who sobbed that we were going to die. Thankfully my wife somehow slept through the storm. Next day, I saw the ship’s captain and asked “WTF?” He said he was assured by Disney’s weather consultants that the storm would not be that bad and it was safe to sail for the Bahamas. I was mislead by Disney. The captain was mislead by his support staff. Ultimately the customer’s safety and comfort be damned. There was money involved for Disney and the Bahamas for the ship to sail and on its predestined course.

On September 12, 1960, I walked 1 .5 miles to my school, St Joseph’s Elementary in South Camden. I was 8 years old and starting third grade. My father had died from a heart attack in February. My mother did not have a car and she did not know how to drive. I did not listen to the news so I was unaware of the impending severe weather. Hurricane Donna which had ravaged states up the Atlantic seacoast was on target to hit New Jersey. As I sat in class, I started to see the driving rain and winds gusting. My class soon emptied as anxious parents picked up their children. My teacher would not let me leave as she feared for my safety. I told her that no one was going to come for me. As the storm worsened, I made a decision. I was leaving. I headed home. An umbrella was useless due to the high winds. I passed West Jersey Hospital where a group of nurses insisted that I come into their building. I declined. My concern was the electrical wires I passed and debris falling around. Last 1/2 mile, I ran home. My mother was in tears as I arrived home and that experience convinced her to learn to drive and buy a car.

The Price is Right (1970s edition)

I have maintained a personal journey since I was 16 years old. Here are some golden oldies on my entries on what prices used to be fifty years ago…Note gas prices…

March 17, 1973

A haircut cost me $4.25 today. I can remember when they were only two dollars. People are rightfully angry at rising prices and costs. Where does one begin to hold the line?

August 9, 1973

Pair of glasses cost me $44.

Friday, March 22, 1974

Bought an $85 suit on Monday. Pretty snazzy!

Saturday, December 7, 1974

Bought a 1973 Maverick. Price $2118.

Wednesday, January 29, 1975

Gas prices for regular run about $.47 a gallon right now on the average.

Tuesday, July 31, 1979

Flounder $2.29 a pound
Eggs one dollar a dozen
Bread $.53 a load
Steak $2.49 a pound
Pepsi 64 oz. $.99
Lettuce $.59 a head
Milk $.86 for a half-gallon
Hamburger $1.99 lb.
Movies $3.50

Saturday, April 12, 1980

Price trivia:
Gas $1.27 per gallon unleaded
Egg McMuffin, hash browns, OJ $1.94
Sunday Inquirer $.60
Sunday Courier $.35
Gatorade $.69 a bottle

Sweeping the Chalkboard

The worst personal rejections come when those who meant so much to you show how little you meant to them.

Relationship neutron bomb—I survive but the friendship, memories, interest and good feelings don’t.

“How long have you known him?
“Fifteen years.”
“What’s the one thing we should know about him if we offer him the job?”
She lowered her head smiling. Pausing for a moment she then stared hard at the questioner and warned, “He doesn’t suffer fools gladly.”

At the precipice, my muscles and sinews struggled mightily to pull up the rope. With each slight pull, I felt a great weight at the end of the rope. With one last desperate pull of strength, I was able to reach the end of the rope. To my shock, there was no one, nothing attached. I had struggled desperately at great effort to save what I thought valuable, but it did not exist, it was imaginary.

Photo by Dids-Pexels

Her silence to my inquiry communicated nothing but told me everything.


Political Potpourri

Why should I worry about the future? Political, religious and cultural groups are pushing an agenda to return to the way things were in the mid-1960s when I was in my teens. Intolerance, racism, sexual repression, discrimination, and religious fanaticism are making a return thanks to Republicans and the Supreme Court, though I’m sure they have never left.

In my almost eight decades of life in the United States, I have seen so much improvement in our technology, medicine and science. Sadly I have not seen the same level of improvement in our national character.

Studying American history after November 21, 1963 is like reading a tragedy. The previous four Presidents before that date were successful ones: FDR, Truman, Eisenhower and JFK. The next four Presidents were LBJ, Nixon, Ford and Carter. They were responsible for the Vietnam War, Watergate, Nixon’s pardon and Iran hostage crisis. Since 1963, we have been involved in unnecessary wars in Vietnam, Iraq and Afghanistan. Starting with the Reagan years, we have hollowed out the middle class in this country and made it much harder for young citizens to achieve the “American dream.” The United States has largely lost the immense respect it had in the world after World War II.

Was the last great national achievement of this country the moon landing in July 1969?

So many Americans are content to being entertained as opposed to being informed and educated. Those Americans are like professional wrestling “marks”. They are gullible to the most ludicrous story lines and pontifications…

Today’s Supreme Court has the same credibility as a moral, ethical, judicial and intellectual authority and arbiter as the Vatican.

While many in this country seem to celebrate individual success stories, one senses that many in the public secretly revel more in the failures, scandals and downfalls of those individuals. The media like to highlight the successes but love to cover and commentate on the downfall.

“Next time the National Anthem is played, every woman and girl should take a knee.” Cheri Jacobus, writing on Twitter

I think that you may receive a more accurate projection of your money and finances from a carnival fortuneteller then a certified financial advisor.

Roe vs Wade Overturn: First Thoughts

A leaked draft opinion indicating the Supreme Court has voted to overturn Roe v. Wade, the landmark decision that guaranteed abortion access, sent immediate shock waves throughout the United States, as many Americans braced for a future without reproductive rights that had been established for nearly a half-century.

NYT 5/3/2022

First Thoughts:

This development is probably bad news for the Republican party as it pertains to the midterm elections. The GOP was looking forward to significant gains in the House and Senate in the upcoming November election. I sense that there will be a significant political backlash and rise in political activism among women.

I think that many Democrats and liberals who decided to stand on the sidelines for the November midterm elections will now get back into the game.

Regrettably this story will push back and minimize coverage of the war in Ukraine. I hope that Americans will still support Ukraine with the fervor that they have shown so far.

This purported decision by the Supreme Court will further deepen the cultural, political and social rifts that plagued this country. I fear there will be political violence and terrorism created by this decision.

This decision will spur further discussion on how to limit the Supreme Court’s powers and also bring back ideas on increasing the size of the Court. I don’t believe that any of these discussions will generate any results.