The 10 Most Important Financial Skills
The Morgan Housel Podcast
Morgan Housel
4.9 • 1.1K Ratings
🗓️ 12 December 2023
⏱️ 16 minutes
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Summary
My wife recently bought me an old book. It's called The Mathematical Theory of Investment. It was written in 1913 and it's as dry and boring as it sounds (but the old weathered cover looks awesome on a bookshelf).
I flipped through it and thought, "Does any of this matter?" These formulas, these charts, this data?
Well, yes.
But not nearly as much as the soft, behavioral side of investing.
This episode shares 10 of what I think are the most critical financial skills -- none of which you'll find in a 100-year-old academic text.
Transcript
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| 0:00.0 | All right, we're back. I had to take a couple weeks off. Like many of you, I got sick from what my kids brought home from school and I lost my voice. |
| 0:16.0 | Sounded like death for a couple weeks. |
| 0:18.0 | Sounded like I was trying to swallow a chainsaw, but we're back. Thanks for being patient. My wife recently bought |
| 0:25.9 | this book from an old bookstore. It's called The Mathematical Theory of Investment. It was |
| 0:32.3 | written in 1913 which is why she bought it. It's |
| 0:34.8 | this beautiful old leather-bound weathered book and she thought I'd be |
| 0:39.2 | interested in it and I love it. It looks great on my bookshelf this old |
| 0:42.2 | ancient book sitting there It looks great on my books this old ancient book sitting there. It looks great. |
| 0:45.0 | But it's so funny to flip through it |
| 0:48.0 | that this book, written in 1913, called |
| 0:51.0 | The Mathematical Theory of Investment investment is as dry and boring as it sounds. |
| 0:58.0 | It's just a bunch of formulas about how compound interest works, |
| 1:02.0 | written in the driest academic pros you could possibly imagine. |
| 1:06.0 | And look, when I think about things like that, |
| 1:10.0 | like the analytical, mathematical, deep academic side of finance. |
| 1:15.0 | Do I think it is wrong or unnecessary? |
| 1:18.0 | No. |
| 1:19.0 | I think we know a lot today that we did not, even a hundred years ago when this book was written, that we are better off for. But it's just so true that what actually matters in |
| 1:28.8 | people's lives in terms of using money as a tool to live a better life and be happier and what actually works |
| 1:37.0 | are things that are not found at all in a book like this. |
| 1:42.0 | The source of what matters with money is not the formulas, it's not the |
| 1:45.7 | education, it's not the academics, it's just the behavior. It's just the understanding in your |
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