Morgan Housel on the New Way We Think About Money

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Joe Weisenthal (1:20)

Hello, and welcome to another episode of the Odd Lots podcast. I'm Joe Weisenthal.

Tracy Alloway (1:25)

And I'm Tracy Alloway.

Joe Weisenthal (1:27)

Tracy, you know what topic we'd never really talk about, or really do is like, we never really do anything related to personal finance.

Tracy Alloway (1:35)

Like what to actually do with all the information that we talk about on a bi-weekly basis, what it means for making money.

Joe Weisenthal (1:42)

It's like a huge part of finance media, but it's like, you know, we like to talk, we're usually like, well, what's gonna happen with quantitative tightening or something?

Tracy Alloway (1:49)

That's a tough one, because I feel like you can talk about it generally, but also there's the temptation, a lot of people end up doing this to give specific recommendations.

Joe Weisenthal (1:59)

Right, like get this credit card or, yeah, either buy this stock, get this credit card, don't buy avocado toast, like all this stuff, or like, you know, move your money. But like, it's kind of like cliched topic, but like on the other hand, I do think it's interesting right now because we've just had this like sort of extraordinary, like three years of like inflation, which many people have never really experienced in their lives.

And so to my mind, that raises some interesting questions, like how is this gonna like change people's behavior and what have people done in the past during periods of inflation? Like there are really interesting sort of like personal finance spending investing questions that like will come out of this era.

Tracy Alloway (2:38)

Well, absolutely. And also the prospect of just finally actually earning some interest on a basic savings account. I know it's still below the level of inflation, but for people who've been earning 0% for most of their professional lives, I think it's very exciting.

Joe Weisenthal (2:53)

I think now it's kind of positive, right? Cause you could probably get like 5% in the CD and maybe inflation will be three and a half. Right. You know, I asked my dad recently about his memory of the 1970s. I was like, what was it like? And you know, the first thing he said was like, oh, you could really get a lot of money on a bank account in those days.

Tracy Alloway (3:08)

Oh, there you go.

Joe Weisenthal (3:09)

Yeah. So, you know, there's all kinds of interesting things about like how people actually deal with the...

Tracy Alloway (3:15)

Right, and also, what happens when we have a sort of regime change?

Joe Weisenthal (3:19)

Yes.

Tracy Alloway (3:19)

And how do people react to it? And how much have things actually changed?

Joe Weisenthal (3:23)

Well, you know, and we've been talking about some, you know, some of the real estate episodes we've done, like how much people like anchor to the Zerp era, they're like, you know, as if like that was normal.

Tracy Alloway (3:31)

Yes.

Joe Weisenthal (3:31)

So it's like, when have people adjusted? Is there still a big adjustment left to go? Like, there's just some really interesting questions.

Tracy Alloway (3:37)

Absolutely.

Joe Weisenthal (3:38)

Okay, well, I think we should talk about them. And we really do have the perfect guest. We are going to be speaking with Morgan Housel, long time writer, the author of the bestselling book, The Psychology of Money. There's more books coming out, hugely popular in this area. Morgan, thank you so much for coming on Odd Lots.

Morgan Housel (3:55)

Well, Joe and Tracy, happy to be here. Thanks for having me.