Financial Expert: Passive Income Is A Scam! Post-Traumatic Broke Syndrome Is Controlling Millions!

Steven Bartlett (0:00)

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People talk a lot about passive income.

Morgan Housel (0:58)

It is not a thing. Look, there's two ways to get wealthier. And passive income is not part of that equation. But what's really important for people is how we should spend money. Because I've written about money and finance and investing for 20 years. And I can tell you the correlation between how much you spend and how happy you are. It can exist, but it is not as simple as you think.

SPEAKER_3 (1:16)

Morgan Housel is the legendary financial guru, revealing that everything we've been told about saving and spending money could be our biggest downfall. And here's why.

Morgan Housel (1:25)

If you're unhappy with your life, it is a very easy assumption to make that if you had more money, a bigger house, a better car, or whatever it might be, things would be better. And it's a lie, we tell ourselves, of course. Because here's the truth. So much of spending is a psychological itch that you're trying to scratch. And that manifests in so many different ways. For example, life is a competition. It doesn't matter how well I'm doing. It matters how well I'm doing relative to you. And the most tangible way to do that is the material stuff.

Steven Bartlett (1:48)

I was reading some funny stats. They say that if you win the lottery, the probability of your neighbor going bankrupt increases.

Morgan Housel (1:55)

It's an amazing statistic. So be careful who you socialize with, because you're going to anchor to them as a baseline level of success and happiness.

Steven Bartlett (2:03)

So is it wrong to buy a Rolex?

Morgan Housel (2:04)

Absolutely not. But when it's controlling your personality, it's no different than any other addiction, where it's forcing you to do things that you otherwise don't want to do.

Steven Bartlett (2:11)

What about people who don't seem to spend anything?

Morgan Housel (2:13)

It's just as dangerous. Like there's something called post-traumatic broke syndrome. And I'll talk about that. But I guarantee you that everyone can spend money in a way it's going to make them happier.

Steven Bartlett (2:22)

So if I wanted to make a framework to know how to spend my money, where do I start? But also, based on everything you know about money, if I want to get complete financial freedom, what's the five things that I should be thinking about?

Morgan Housel (2:32)

The first thing that I think is most important is...

Steven Bartlett (2:36)

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Morgan, everybody loves to talk about investing. They love to talk about saving money. But I've never heard anybody emphasise the importance of spending money. You've written this book, The Art Of Spending. So it begs the question, why would someone like you, who sells tens of millions of copies of their books when they write about something, and really, really cares about the art of writing, commit themselves to writing a book about the art of spending when you could have written anything that you wanted to and it would have been a success?