A Few Thoughts on Spending Money
The Morgan Housel Podcast
Morgan Housel
4.9 • 1.1K Ratings
🗓️ 1 February 2024
⏱️ 13 minutes
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Summary
Behavioral finance is now well documented. But most of the attention goes to how people invest. But the study of how you spend money might be far more interesting -- and practical. How you spend money can reveal an existential struggle of what you find valuable in life, who you want to spend time with, why you chose your career, and the kind of attention you want from other people.
There is a science to spending money – how to find a bargain, how to make a budget, things like that.
But there’s also an art to spending. A part that can’t be quantified and varies person to person.
Transcript
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| 0:00.0 | Welcome back. |
| 0:07.0 | Nice to see you. |
| 0:10.0 | Thanks again for being here. |
| 0:13.0 | Something I've always found interesting |
| 0:16.0 | and that has had a big impact on my career |
| 0:20.0 | is that most of the interest and research in behavioral finance |
| 0:25.6 | centers around investing. |
| 0:28.2 | Like how people make decisions around greed and fear and risk and opportunity what I've called the psychology of money |
| 0:36.7 | really centers around making investing decisions. |
| 0:41.4 | I think there's some background to that that makes sense. I think most of this came out of |
| 0:45.9 | academia and a lot of the pioneers on this were interested in investing. They were |
| 0:51.5 | investing minds who kind of gravitated towards psychology and a lot of the behavioral finance literature so to speak is around investing decisions. |
| 1:08.0 | But what's interesting to me is that that of course applies to only a small |
| 1:11.2 | percentage of the population. |
| 1:14.0 | Just over half of Americans own stocks. |
| 1:17.0 | It's not a minority. Most Americans own stocks. |
| 1:20.0 | But for most people, it's not the center of their lives. |
| 1:24.0 | They have a 401k, they're saving for retirement. |
| 1:27.0 | But day-to-day spending decisions, that impacts everybody. |
| 1:31.0 | From the poorest person to the Deca billionaire everyone is |
| 1:36.2 | impacted by the psychology of spending money more so than they're impacted by |
| 1:40.9 | the psychology of investing their money. |
... |
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