Reasonable vs. Rational
The Morgan Housel Podcast
Morgan Housel
4.9 • 1.1K Ratings
🗓️ 2 April 2025
⏱️ 16 minutes
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Summary
The most impactful idea to me personally in my book: My theory is that most investment models maximize for risk-adjusted returns, but in the real world every investor wants to maximize for sleeping well at night and being proud of themselves in a complicated world.
Thanks to my friends at Eight Sleep. Check out eightsleep.com/morganhousel for more.
Transcript
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| 0:00.0 | The whole purpose of money is as a tool to give you a better life. That's always been my mantra. |
| 0:04.8 | And if there's one area of my life that I've wanted to improve, it is my sleep. I have always been a |
| 0:09.5 | terrible sleeper, and it's had such a big impact on my health and occasionally my mood. |
| 0:13.7 | I recently started using eight sleep, and it has been wonderful. Truly one of the best investments |
| 0:18.5 | I've made in a while. Eight sleep is a mattress cover that heats and cools underneath you while you sleep, analyzing your sleep patterns to |
| 0:24.9 | find the right temperature and automatically adjusting throughout the night. It also gives you |
| 0:28.5 | tons of data the next morning showing your sleep patterns, where you can improve, and how much rest |
| 0:33.0 | you actually received. I love it. If you want to check out more and get up to $350 off, go to 8Sleep.com |
| 0:39.6 | slash Morgan Housel. That's E-I-G-H-T-Sleep.com slash Morgan Housel. |
| 0:52.0 | My first book, The Psychology of Money, is 19 short chapters. |
| 0:57.0 | And I've been asked once or twice on different interviews, which one of them is my favorite. |
| 1:02.0 | And I think a lot of people in that situation would use the classic, like, oh, that's like asking me which one's my favorite child. |
| 1:08.7 | And for me, it's not that at all. |
| 1:09.9 | I know exactly which one of these chapters is my favorite for me, it's not that at all. I know exactly which |
| 1:10.9 | one of these chapters is my favorite because it had the biggest impact on me personally. |
| 1:15.1 | Like, which one of these topics in my own personal life when I'm managing money within my |
| 1:20.7 | family was the most influential to me? And to me, it is the idea that we should not aim to be rational with our money. |
| 1:29.7 | We should just aim to be merely reasonable. |
| 1:33.3 | I'll tell you in a second where I first found this idea and why it was important to me. |
| 1:39.6 | But I think at a high view, let me explain this idea. |
| 1:43.5 | We are not machines. |
| 1:46.3 | We are emotional, screwed up, biased, hormonal humans. |
... |
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