Plain English with Derek Thompson - How to Invest and Be Happy When It Feels Like the World Is Falling Apart

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I’m Alyssa Perez neck.

You can listen to this flew up on Spotify or wherever you get your podcasts.

Today’s episode is about money happiness and the meaning of life.


Hearing that came out my mouth.

I know it sounds a little bit grandiloquent, but I don’t know what to tell you.

That’s what the episodes about.

So, the first title that I gave this show, when I was planning, it was how to invest when it feels like the world is falling apart.

You might be like, well, what do you mean the world is falling apart?


Well, to set the stage briefly, I think we’re in a moment in world history, where a lot of big, Global paradigms are dying.

For decades, it was point of fact, that Europe was basically peaceful that Paradigm has gone up in smoke.


In the last 12 months for decades, the relationship between the US and China was one of mutual dependency and growth to dramatically oversimplify.

We invented a lot of stuff, China made a lot of stuff and we bought a lot of stuff.

The China mate, China got jobs and money.


We got cheap stuff.

That Paradigm I think is changing rapidly as the u.s. moves toward a new industrial policy and China shrinks inside of a shell of authoritarianism.

Also for decades low interest rates shaped the world that they shaped the companies.


They got started, the growth of the internet, the ability of governments to run, massive deficits And now with interest rates and inflation rates Rising that Paradigm is going away.

So, the world is a bit of a mess right now.

And I wanted to talk about it with one of my favorite authors in the world, he is Morgan, housel, he partner at collaborative fund and the author of the best-selling book, the psychology of money.


We talk about what happened to the world in the last 18 months.

What happened to markets in the last 18 months?

The legacy of zero bound interest rates and inflation But, to be honest, that’s like the first, maybe 10-15 minutes of the show, the bulk of this episode is about deeper questions.

Something like what’s Investing For Does making more money really make us happy.


And why do so many rich people seem so miserable?

If you liked this episode, please leave us a rating on Spotify or a five star review on a podcast.

If you don’t like this episode, we still want to hear from you.

Tell us why it plain English at


I’m Derek Thompson.

This is plain English.


Morgan housel welcome back to the podcast.

Hate Eric.

Thanks thanks again for having me.

So stocks have obviously been a mess this year.

The S&P 500 is down. 20% NASDAQ is down 30% and it is amazing to me how obvious everything looks in retrospect.


Like you go back 18 months ago, the u.s. approves a record high amount of government spending in an economy that was supplied constrained because the pandemic, the result was inflation, the medicine as everyone knows.

Elation is higher interest rates.

We know this for a fact, you get inflation, you get higher interest rates.


We also know for a fact that higher interest rates tend to increase the cost of borrowing and make it harder for companies that have less cash flow to thrive.

That means companies that relied on growth narratives, like, Netflix and high multiple tech stocks were punished the most when interest rates increased like this.


That’s what’s happened.

And you go back and you look at all the falling dominoes to begin to each other.

And it’s like, holy crap.

It’s so easy to see all of all of this.

Now, it’s so predictable because it happened and I have lately become obsessed with this Paradox.

That the future always feels so unknowable.


And yet the past always seems so obvious.

So you’re a wonderful think you’re at the intersection of investing in Psychology.

How do you reconcile that Paradox?

Well, you’re right that it’s always felt like that.

The future is unknowable and the past is so obvious, my wife has brought up this point several times that in 2020.


It completely shredded the global economy broke everything.

And from the investing standpoint in the stock market, there was no price to pay.

I mean, the stock market fell for like a month and but then, if you look at 20:20 and United States, stocks Rose like 20% that year and when people try to say how do you explain, like make sense of this market decline this year?


My response is like know how do you make sense of that?

How do you make sense of the fact that in the craziest, most insane year maybe in the history of this country?

The stock market went up 20 Explain that to me.

So in some ways, I think what we’re dealing with now is maybe, just, hey, there is a price to pay for the consequences of what happened.


Both both the pandemic and the policy responses that came after that to your point though, about it being so obvious that this would occur.

I would push back a little bit.

And I would say, if you remember what happened after 2008, during the financial crisis, when we had, you know, massive stimulus packages and the Fed was printing trillions of dollars.


So many people including myself, by the way, we’re warning, In 2008-2009 that hey, hyperinflation is right around the corner.

It is unavoidable, it is with 100% certainty, that interest rates are going to spike and inflation is going to Surge and it didn’t.

It did not come and we went years and years and years with people warning 1 and it never happened.


I think that is actually a big reason why in 2020 we did 10 trillion, some odd dollars of stimulus.

And a lot of people including maybe myself said, hey, it’s probably not that big a deal or maybe it’s gonna if they’re going to be some kind.

But like we were so conditioned after 2008 to assume that we can have our cake and eat it too.


And so that I think even though it’s obvious in hindsight, there are examples recent examples of when it did not play out.

Like, we thought it would.

That’s a really good point and I’m already ready to concede a bit on my original thesis that the past always seems so obvious because you just put it out that sometimes we were trying to explain the past.


It’s almost as if for predicting the past the same way that we predict the future, we’re trying to inscribe The nation’s on that which is somewhat inherently mysterious like why did stocks absolutely plummet in March 20 20?

Let’s just totally created for two weeks and then like, the global investor Community was like, oh no.


Like we’re actually, we’re actually fine.

So my answer that question and I Minister what you think about this Theory.

And again it’s just a theory is that it has to do with basically two data points, physical response and monetary response.

So when the world fell off a cliff in March, 20, 20, The Federal Reserve and the federal government and lots of fiscal policy makers.


All over the world said, we foresee a massive crunch to both supply and demand because of this Global pandemic.

And as result, we are going to kitchen sink, this shit, we are going to throw everything that we possibly can at this pandemic.


And as a result investors recognizing that this relatively unprecedented moment, world history was getting a relatively unprecedented monetary and fiscal responsibility.

Hans said, I think we have more faith that we can muddle through economically than we had before.

They might have a flash freeze recession rather than a kind of global depression.


Whereas you look at the paradigm shift that’s happened, the last year and a half, we’re going from 20 years of zirp, zero interest rate policy to be foreseeable future that is non zirp.

It is 2%, 3% 4%, 5% federal funds rates, which is An entirely different paradigmatic climate for the future of business.


So that would be my big picture explanation for WTF March 20, 20 versus WTF right now.

I agree with everything you just said, but I think it’s maybe 80% of the story or something like that.

The other data points that I would, that, I would give to you is, if you go back to the late 1990s, interest rates were 7%, the budget deficit was in Surplus, there was no deficit, it was literally negative stimulus and the market was as insane and Bubblicious at his at ever been.


So when people say, we had a market bubble because of interest rates and what not, I think that’s that’s inarguable, but it’s not, it’s not black and white like that.

You can have a market bubble with the opposite of massive stimulus with negative stimulus, a budget surplus and it was crazier 1999 than it has been in.


It was in 2021.

So, I do think that there’s always just this psychological animal spirit side to what the market is doing that.

You cannot explain with data and maybe some of that in 2020, and Anyone was people were locked in their homes.

They weren’t going to school, they weren’t going to work.


They weren’t going to concerts with their friends.

What did they do?

A lot of people literally tens of millions of people opened up a Robin Hood account, and started day trading.

And that was, that was not a small portion of it.

That was like, literally tens of millions of new investors.

Most of them are small dollar amounts but so much new participation pushing up the meme stocks and thus packs.


Toxic all this, what we look back on as the crazy bubble of 2021?

I think that’s the right word for it.

Now was probably due to some sense of boredom.

That was in many ways I think displaced from the monetary and fiscal policy that was happening.

Even if that did of course play a role Right now, the market is way down.


It may go down further.

Before it goes back up and I have friends who talked to me about the market and I feel like I can sort of bucket them into two different categories.

There’s one category of friends, whose emotional coping mechanism is to say, I’m not going to even look at my 401k.


I’m gonna be completely averse to the entire idea of checking my net worth.

I’m just not going to think about it.

I’m going to wait five years in the long run.

Equities tend to go up.

I have other friends category.

Number two, Who are like it’s time to strike.

Like the bottom is near, stocks are cheap.


I can find opportunity right now.

That’s akin to, like, getting in on Amazon, the year 2000?

What I wonder what you make of a moment like this, when the markets gotten smacked is this?

The time to do nothing?

Or is it the time to do something?


I think the do-nothing aspect is, you know, you know, I checked my brokerage account every day Derek.

But I think that’s okay because I Never take an action.

I’ve never sold in any significant amount ever in my life.

I checked because I think it’s interesting just following what’s going on.


I like the tracking of it, but I don’t make any emotional decisions because of it.

I dollar cost average, which means I invest roughly the same amount of money, every month, come hell, or high water, no matter what the market or the economy is doing, there’s always this, this anecdote that I love.

I probably reference the book, The Great Depression, a diary on this podcast before it was written by a lawyer named Benjamin Roth in the 1930s who kept a diary.


There’s this one entry where I In 1930, he’s writing about the stock market and he says, the market has fallen so much nobody can imagine.

It could possibly go any lower and then in 1932, there is an addendum to that, diary entry.

And he said, I was wrong.

It got much, much, much lower, it felt like, another seventy percent from there.



Just because of Market has declined a lot and just because you might do some analysis that says stocks are cheap, does not mean you have any insight whatsoever know what’s going to happen over the next one year, five years.

And Joe as well I like Joe wiesenthal’s line here that At this any given stock can always fall 90% from whatever dollar amount it is.



It can fuck, doesn’t have 110.

All right, because snowfall, from 10 to 1, we can still fall from 1 to 10 cents anyway, go on.

And when you have like, pretty good, high quality companies whose stocks have declined 75 percent in the last year, like just Facebook for an example, a crazy profitable company, a very good company by any metric and its stock fell 75%.


Obviously, there’s things going on in the business and what not, but I’m Like it’s it’s so much easier for stocks.

That have big declines from levels that you would have never imagined than people think.

And this is why I dollar cost averaging for those who look historically and crunch the data.

Even if you are trying to like, reverse engineer it with hindsight bias and you were to say, okay with hindsight bias, if I added more money to my investments, when we were in a recession, if I added more money after the market, fell twenty percent, would that be would that improve my returns?


Even if you are cherry picking by and large, the answer is no.

No and it is so difficult to beat a dollar cost averaging strategy.

For the simple reason that you have no idea how much lower it’s going to go even if stocks have gone lower.

So someone had say if someone today said now is the time to strike and they invested their bankroll you know half of their Banker or fear or 100% of the bankroll Marcus could easily go, another 30, 40 50 percent lower and then by not having the opportunity to buy those shares, you just taking away from your future returns.


It is so it’s so easy to become bored with dollar cost averaging and think.

No, I can use my big brain and do better than this if you actually crunch the data.

It is so difficult to actually beat it.

You think really deeply about investing strategies and about psychology and I wonder what you make of a paper that I know that, you know about James Choi professor at Yale University wrote this paper.


After teaching, a personal finance course at Yale.

He poured over 50, different popular, personal finance titles, not yours, I think, but others that had sold millions of copies like yours and he got really interested in this idea of what’s the difference between the way that economists think about investing and the way that the most popular personal finance advisors and writers think about investing and his conclusion was that economists tend to offer more rational advice because they’re dealing with numbers.


While the best-selling books tended to offer more practical advice, that wasn’t always specifically rational.

So just quick example, Dave Ramsey, Is famous for suggesting that people pay off their debt with a quote debt snowball method.


That means you pay off debt from the smallest at the, you have to the largest debt that you have because you want to close out the smaller accounts, get the all the momentum from feeling like, yeah, I check that box.

I closed I close one of those accounts.

I paid that debt down before moving on to the larger debts, whereas inches, classic macroeconomic, thinking, or micro economic thinking, you should want to try to pay off the larger debts before the smaller ones because they are the bigger.


GE hit on your monthly statement.

I wonder what you thought of this paper.

I thought it was really interesting, but it, it basically sort of pushes on this tension between our rational mind and our cycle and and are our sort of mammalian mind when it comes to investing.


I think James Choi, is is a brilliant individual.

I have I’ve communicated with him since the paper came out.

I think he’s a very nice guy.

I mean, this Nothing personal but I think what he put forth and so many other academic economists have put forth as well.

Is the idea that they have the right answer and the pundits and the writers and the authors don’t really know what they’re doing.


So then the assumption is that you can compare the quote-unquote.


Answer to what everyone else is is putting out there and find the difference and I just found that so arrogant to think that that a person with a PhD and a chalkboard and is good and Excel knows the right.


Dancer and the financial advisors who are in the trenches actually working with people actually getting stuff done in the real world.

Don’t know the right answer.

If anything it is the opposite that the people like Ramsey who, by the way, I’m not even like a full-blown fan of it.

But I’d mentioned recently, I said, how many people has Dave Ramsey, helped out of debt compared with academic Economist and I said, look, it’s a million-to-one I’m making that up, but it’s Gotta Be, You know, you’re not making it up, it’s probably mostly a million to one ratio so the idea Someone could say, well, he’s wrong, he’s not doing it right and I the academic has the right answer.


I’m just like Ah that’s just not it’s just not how it works.

And the idea that well the academics have the rational answer yet.

But people are not rational, they are not machines, they’re not spreadsheets or not, chalkboards their emotional hormonal, people who make financial decisions at their dinner table, not in Excel, then make them at the dinner table.


We’re all these weird emotions and Dynamics and family.

You know, you know your spouse is risk.

Tolerance is different from your risk tolerance and your Social goals, your aspirations.

They all come together into this big pot.

That’s that, that just makes it impossible to make a quote-unquote rational financial decision.


That was my big takeaway from it.

I thought the best point he made in that paper was about smoothing consumption versus smoothing your savings rate.

So, in plain English, what most, what a lot of best-selling, personal finance, books, advise people to do is to smooth their savings rate That is to say rain or shine stock away a consistent share of income to build a savings habits over time somewhat similar to your strategy of putting away, a similar amount of money every single month.


The reason to do this is because habits are sticky, saving money is hard, and it’s important to clock that habit of saving.

So that no matter what happens, you still have it.

The argument against it is that life isn’t Smooth, Life is spiky, you know many people who barely earn enough to afford rent to 25 because Um Rich enough to afford a home at 40 or 50 some parents find that they are you know, totally Deluge with daycare expenses for their very young kids.


And then realize that a huge chunk of cash is freed up when their kids move on to public school because they no longer have to pay ten twenty thirty thousand dollars a year and so for this reason he said academics who are more likely to encourage people to smooth consumption will say look you don’t have to say the same amount of money every single year.


You can be responsive to the world, you can respond to whatever your situation is and change your savings rate in order to make yourself comfortable in the short run.

I wonder what you think about that question about whether savings smoothing is smarter because it is psychologically intelligent or whether consumption, smoothing pays homage to like a larger reality, that it’s important to be happy in life, even when life is like really, really squeezing.


You, I first have to point out my my contradiction that I have just put forth in the last 5 minutes which is I said, dollar cost averaging as an investor is a right way to do it because if you crunch the numbers it is impossible to beat.

But but but then I went and said people are not rational and, you know, it’s not it’s not made on the chalkboard.


So I think there is that contradiction there as well.

So even when people are not dollar cost averaging in their Investments or not smoothing their consumption, not smoother, can savings, there’s so much worse.

It’s like, it just comes down to the individual.

And there are some people whose income and whose income is.


So lumpy not even necessarily High income workers, but if you are a gig worker, your income might be incredibly lucky lumpy.

If you’re an Uber driver, your income might fluctuate by thousands of dollars by the week and therefore the idea that you can have a smooth savings rate or a smooth consumption, just I just think it’s just kind of gets disconnected from reality.


And do think what’s definitely true that we know from behavioral Finance is that people are very sensitive to declining their I’ll if they were used to spending three thousand dollars a month and they were used to spending our to driving the fancy car and then they are forced to go down even down a little bit, the loss aversion from that is devastating.


If you go from a Honda Civic to a BMW and then you’re forced to go back to the Honda Civic.

Even if it’s a nicer, Honda Civic, like, with the moonroof you’re like, this is terrible.

It’s, it’s very difficult to do that.

So if you can manage your savings or and and you’re spending your consumption to a degree that even with your lumpy income, you’re never going to be forced in a major way to And to pull back your lifestyle that I think has a lot of validity to it.


One of the things I would say about these contradictions of a story that I think, is so powerful.

John Bogle, who is the late founder of Vanguard.

He is the Pioneer, The Godfather of index fund passive investing passive where you just owning a broad basket of stocks.

You’re not picking stocks per se.


His son is an active fund manager.

His son is a stock picker, and so many people.

And and John Bogle, invested, substantial amount of money with his sons fund.

And a lot of people pointed out, this is John Bogle.

You are the U-Haul, your whole life’s work is saying, don’t have an active fun.


You should be indexing, but here you did doing with your son’s, your son’s fun.

Isn’t that inconsistent?

His answer was something along the lines of, yes, but life is it consistent?

That’s just how it works.

Sometimes, I think that is the realistic solution and answer to all these problems.

Even if you can say, shouldn’t you do action, you do.


I, it’s like, yeah.

But that’s life is messy, life is messy.

I also kind of love the idea that the founder of Vanguard in his own personal life.

Polio has a position in active managing right here because he’s invested most of his money.

Most of his attention.


Most of his philosophy of life in the idea that index funds are better than active managing funds.

But then he’s invested like, you know, whatever a small portion of his life of his income of his Savings in the possibility that hey, maybe some people can actually beat the average.

I think, I think, you know, I am, I don’t think about investing as much as you do, but sometimes I use the portfolio analogy to represent the fact that we We are willing to accept a degree of hypocrisy in the context of investing a portfolio of money, right?


When we, when people invest portfolio of money, we think about hedging is being a good thing.

You should bet on some high growth companies, but also you should bet on, you know, some whatever Commodities or options that are likely to move in the opposite direction, but it’s one of the outside of the context of investing money.


We tend to think that that’s sort of hip-hop.

See is a bad thing, right?

We tend to think like, oh, all of your positions need to be 100%.

Whereas, most people even in the things, they seem to think most deeply have a portfolio of opinions, right?

They think that a that a high tax rate on rich, people is the best thing to do, but a small part of them is like, wait, maybe if we cut taxes on the wealthy, they would have more money that they would save higher savings would go into invention and Innovation and that might be better in the long run.


Like it’s just people, people are messy in that way and I think it’s what about a fascinating story that that you could.

I can now go forth and tell that story with the with the founder of Vanguard and I think there are so many areas in life where people are, okay?

With the contradictions if they know that the topic is subjective, if you’re talking about your taste in music or your taste in food or something like that.


If I said, I hate country music but then, if you heard me like humming along to a Tim McGraw song, you’d be like, wait, what about that?

And I was like, well yeah, like I hate country music but like that, that one’s okay.

And then people are okay with that because they know it’s If but they view investing and finance as not subjective, they view it as a hard science like physics or chemistry or math and therefore any subjectiveness that you haven’t it seems like it should not be there.


You want to remove all subjectiveness to it but it is subjective and it’s always it’s always subjective.

And I think that’s what throws people off about this.

The question of what you do and inflection moments like this, you know, should you act?

Should you invest your, should you do nothing and just not pay attention to your 401k.

It kind of gets it a deeper philosophical question about whether or not there.


Our differences between getting rich and staying Rich, right?

Like getting rich and staying.

Rich are two different things, right?

What do you consider the difference?

They’re two completely different skills.

And they are conflicting skills, which is what throws people off, getting rich requires being an optimist, and taking a risk, and being optimistic about your own abilities, and the economy’s abilities swinging for the fences, when you need to get rich, staying rich, is almost the exact opposite.


It’s like degree of pessimism and paranoia.

And conservatism, and just an acknowledgement.

I meant that, as you talked about, like, the future is always so uncertain and we have no idea what the biggest risk is going to be over the next one, year, the next five years.

But then, if but then acknowledging, that if you can get those two things to co-exist those two personalities to co-exist that if you can endure, all of the short-term nonsense, and unpredictability, and risks and threats in front of us, if you can survive those financially and stick around long enough for your long-term optimism to actually pay off.


The rewards can be incredible.

One of the way to think about that is the idea of saving your money like a pessimist and investing your money like an First, I think that’s the way to do it.

You want to say with the idea that what’s in front of us is just a big unknown black box of surprise and decline.

But if you can endure, all of that and stick around for long enough, it can be amazing.


Never getting to my favorite subject which is at the interplay between money and happiness.

Let me start with the most basic question here and then ladder up to somewhat harder questions.

What do we know about the relationship between income and happiness?


If you really dig into the studies of what it shows, it’s not that rich people are necessarily happier, but they tend to be more content and being content to contentment and happiness are very different happiness, tends to be a very fleeting emotion and our is Elon Musk and Bill Gates and Jeff Bezos.

Are they happier than you?


And I probably not, they might have fewer bad days in you and I, but I truly doubt, they’re happier than you and I, but would someone who is successful?

And let’s leave aside the deck of billionaires, would a dentist have a more feeling of contentment.

Mint in their career than a lower-income worker by and large.


The answer is yes.

More likely to get to your later years in life and look back and say I’m pretty proud of what I’ve accomplished that is very different from happiness, but it is worth striving for as well.

So whenever people say more money doesn’t bring more happiness, it’s usually a black-and-white of and therefore, you should not go out and Chase more money to some degree.


I think that’s okay advice, but it’s not that more money does nothing for you.

It does something for you.

It’s just not exactly what you thought it would be.

Can I ask a little bit more about the difference between being content and being happy?

I absolutely understand.


The idea that happiness is fleeting that no one exists fully suspended in a permanent state of absolute happy ecstasy at the same time, precisely because life is messy and it is emotionally unstable.


And there are happy moments, disappointed, moments and rumination and anxiety.

I’m trying to figure We’re contentedness sits in there, the way that you’re using it.

Are you saying that it’s almost as if there is a higher floor to their emotional experience or like a higher sort of average temperature of contentedness like their happiness thermostat is turned up just a little bit higher than someone that makes 10 times less than them.


Like how are we defining the concept of being content versus happy here?

As I would, as I would Define it and this is says, is my interpretation of the study.

That have been done, it’s a lower propensity of regret later on in your life.

And I think that is a major cause of things.


Like midlife crises is having a sense of regret that, oh, I’m now in my 50s.

I wish when I was in my 20s, I would have pursued this different career.

I wish I would have taken a bigger risk.

I wish want to try to get the promotion that if you have a higher income, you are less likely not fully but less likely to experience those emotions.


Now, there are other things that you might regret, if you are a very successful entrepreneur, you might look back and say, I regret not spending more time with my children.

And I regret not spending more time with my friends and family.

There are other things, but a lower susceptibility to be plagued with regret later in your life, as your income goes up.


If you take the Very extreme levels of this if Bill Gates were on his deathbed today.

I imagine maybe this is not true.

I’m not going to speak for him, but I imagine he would look back and say I built an amazing company.

I made a lot of money.

I gave the majority of money of that a way towards helping Society, it wasn’t perfect.


I did not have a perfect life by any means, but I’m Pretty proud of what I accomplished and I think that would just be a very low level of regret that he would have.

That’s my assumption of it and maybe completely different what actually happens.

But I think at the broad level, that’s what happens.

All of these things to the changes in whatever feeling you’re going to have whether it’s happiness, or contentment are pretty marginal.


There really is not that much of a difference.

And I do think, too, that there is a sense that what money does for you is not necessarily bring more happiness, but it can remove levels of unhappiness, which is about as good as you can hope for, and it’s worth striving for so back to the Bill Gates, and Bezos.

Do they have more happy days than you and I probably not do they have fewer bad days than the average homeless person?


The average low income, or yes.

Yes, strictly as a function of their wealth.

So I think that is worth striving for it’s just very different from what most people assume that you will get for more money which is they assume it’s going to bring happiness.

It’s addition to think that wealth is more like a vaccine than a performance-enhancing drug.



Because a vaccine vaccine prevents illness.

Animality, performance-enhancing drug makes you super human, right?

It turns me into Barry Bonds.

Not then we need to go back into that whole thing.

I already debated, but his legacy with Bill Simmons, with an interesting and interesting thought what I keep coming back to when it comes to happiness, is that to me, the denominator of everything is time.


It’s all about experience in time.

And when I’m giving advice to my friends, family members about what they should do, whether they should go for a job that I think you’ll enjoy more versus a job.

Make a lot more money in.

I say, well, cash it out in time, okay?


You make an extra ten thousand dollars, it makes it, you make it extra hundred thousand dollars, but yeah, you make it extra million dollars, right?


That’s a number as a number, in a spreadsheet at a bank.

What experience does that by you in time?

Does it buy you a vacation that you love?



Does it buy you a house in a safer neighborhood near a better school with a pool?

It’s gonna make you really, really happy because floating in a pool is the thing that brings you like the highest Joy.

In the world.

But like it’s shocking to me how few people actually, like, do this calculation.

The money is just a number, in a spreadsheet in a bank.


You can reflect on it and be prideful.

But like, who cares?

Even that pride is just a moment in time.

It lasts five seconds.

That is you’re done and you’re worried about your kids, you worried about your, you know, your partner.

You worried about whatever the thing that’s coming down, the pike at work is so understanding that wealth is just this thing.


The cash is out in time, like, how did How do you think about, I guess, the interaction between between money and time in this way?

I’ve often thought of it just in the simplest terms, every dollar of savings, you have is a piece of your future that you own that you have a claim to.

And, and on in the inverse, every dollar of debt that you have is a piece of your future that somebody else owns the knee-jerk reaction of what money is going to bring for, you is more stuff and nicer stuff.


That’s and that’s great.

That’s true.

I enjoy that aspect of it as well.

It is so easy to overlook though, the power of using money to control, your time, to be able to live, where you want do, where you wants to wake up every morning and Do what you want with whom you want for.

As long as you want and taking control over.

Your calendar is one of the areas that you can use money and higher wealth, to actually give yourself a better life.


I’m going to avoid using the word happy but a better life and the irony is that there are so many people.

Particularly very wealthy people who their wealth comes from the fact that they have no control over its and their time, they’re completely scheduled down to the second from 6, a.m. to 10 p.m. in their job, as an investment, banker or a lawyer, or whatever it might be.


And that in itself is a unique form of poverty, having no control over your time.

They haven’t been forced to work six or seven days a week and being at your boss’s Mercy, 24 hours, a day, that is a unique form of poverty.

That is so easy to overlook when you are just measuring wealth by how many dollars you have in the bank and if you can use what little money, you have to control your time.


And not necessarily say, I want to use this this thousand dollars to buy more stuff, but I’m going to use this thousand dollars to or whatever wealth you you have accumulated to live where you want to retire on your own terms.

When you want to do that, I think is going to be such a more bigger.

Us to your well-being then using money to have nicer stuff.


It’s just using it as a measure to control your time.

Why do you think so many people make this mistake?

Like let’s assume for the moment that you and I are right.

Maybe we’re not you know, once again we’re just making a prediction about life, we might be entirely wrong but let’s assume for the moment that were right and that lots of people who are very privileged who are really, really lucky to be able to make choices about their life, choose time poverty in order to grow the number in the spreadsheet.


At the bank.

Why do you think this is such a popular mistake?

I think there’s, I think there’s there’s two, there’s two reasons here, one is that for a lot of high income people, the money is not to feel their lifestyle.

It’s just the scorecard of how, well they’re doing in life.

And then when they’ve tied so much of their identity and their entire life, since they’ve been teenagers to that scorecard, the idea of letting it go and retiring from the game is impossible.


The scorecard has to keep going up and if it doesn’t go up there, a failure in life because that’s their entire personality.

I am so impressed.

With pro athletes who have to retire when they’re fairly young, just because their bodies don’t work anymore and to and therefore they have their body.

Hi buddies, don’t work there.


But I still work much better than yours in mind, they just did.

This don’t work at an elite level for.


But they are forced to give up the identity that was so recognizable and so important just have to walk away from it.

That’s amazing.

But if you are a lawyer or an investment banker by and large, you can keep going for decade after decade, after decade still playing that game.


And the more you do it, the more addictive it.


That’s one reason.

The other reason that I read in, Will Smith’s biography that I thought was so insightful, was Will Smith said when he was poor and depressed, he could tell himself.

Oh if only I had more money, all my problems are go away.

But then when he was rich and depressed, he couldn’t say that anymore.


He was like, I’ve got all the money I could ever need.

And I’m still sad.

And he said that, what one of the things that wealth did for him is it removed his sense of hope that he had when he was poor, but if he only had more money, his problems would go away.

And he was rich, he lost that.

That is It is an amazing recognition that he had by think most people no matter their income, never get to that recognition and they still no matter their net worth, no matter their income.


They have an assumption that if they had a little bit more, their problems would go away and it’s never true.

Never true, but they keep chasing it.

It also speaks to the asymmetry of success that becoming successful feeling like you’re becoming successful at any level within a company within a project within a group of friends feeling like you’re becoming popular, that momentum is so joyous.


Holding on to, it is tenuous and losing.

It sucks like and losing.

It might suck more than getting it is good.

I’m not sure if that sentence was very well, hopefully makes sense and let me quote, the great philosopher Will Smith again.


It’s good to go off of this.

Another thing you said is book that I thought was so insightful, these are probably like the, to only things that I really took away from his book.

He also had this quote where he says, becoming famous is amazing.

It’s one of the best feelings in the world being famous is Okay, losing Fame, is is torturous.


It’s a terrible feeling, and, and his point was like, most people want, they don’t want to be famous.

They want to become famous, I think it’s the same with money.

The most people enjoy getting rich more than they would enjoy being rich.

It’s just the change in expectations that they are after that.


They really enjoy and that’s Troublesome to.

It’s like people don’t want to have a million dollars.

They want to go from zero to a million dollars.

It’s the change that they want that in an economy and especially at a stock market Is so volatile.

That’s a dangerous feeling to have because you are guaranteed with 100% certainty.


That there are going to be periods.

Even long multi-year periods when you lose money and if you are just addicted to the Delta the change in your net worth, you’re setting yourself up for some disappointing times.

Did you ever disturb you when you think about just how tenuous Fame is, how horrible it is to lose it that we tacitly encourage Millions tens of millions, maybe billions of ‘Well, to chase a prize that is so fundamentally unsatisfying.


Not only is the answer obviously.

Yes, but I think it is way more accentuated now than it was even for your and my childhood.

Because now the famous people are YouTube stars and Tick-Tock stars and when you and I were kids, the idea of becoming a Hollywood film star was like so far Out Of Reach.


But for the kids today and by kids, I mean, anyone under the age of like 30, the idea of becoming a tick tock, star actually feels like it’s within reach, you could actually be like, oh, I could do it.

No this guy down the street who did it to?

That’s what everyone’s thinking.

And therefore the idea of Fame seems like right there, he’s got to reach out and try to grab it.


Whereas for us it was so such a distant dream that I think it’s just setting up an entire generation for disappointment and you you’ve probably seen the studies to that.

Basically show that the surveys.

If when you ask a young person today, what is your dream career or something?

Along those lines, AB major percentage of him, say social media influence or something along those lines, that’s what they want to be and they want to do that for the fame, the recognition.


That’s a tough thing.

Well, the other survey that really strikes, me is the CDC.

Does this survey of American teenagers, asking them?

How many of them are consistently hopeless or sad?

And just last year found that the share of teens in high school who say they are consistently.

Hope, it’s real sad, Rose to 44 percent, its highest level ever recorded, just 12 years ago.


It was 26% for girls, it’s more than half for LGBT students.

It’s more than 70 percent.

And in thinking about just, you know, I’m fascinated with this with this concept and want to do it.

More podcasts about it, this phenomenon of anxiety in America, where, you know, I don’t want to be too much of a progress booster here, but just in terms of both material and moral progress, things are a lot better than they used to be.


We are richer than we were 20 30 years ago.

No question.

If you look at, you know, race relations, you look at attitudes toward gay marriage, you could attitudes toward interracial.

Marriage is a morally.

We’ve made a lot of progress and I have despite all of this material and moral progress, people are sad.


Then they have ever been at least according to these surveys.

And it’s, I’m obsessed with this question of why?

And I don’t, there’s anyone explanation.

But I do think that one little nugget that you just mentioned, is something that I’ve never quite put my finger on, which is that disappointment, is such a downer drug, like to lose the feeling of success, or the feeling of micro Fame, is such a downer drug.


And if we are allowing encouraging all All of these young people to be online and seek out this feeling of micro Fame, these 15 seconds of Fame that they can find on Snapchat and Instagram and Tick Tock.

And they are feeling that only these bursts of success, but also, these little micro doses of disappointment, when whatever their video or their posts.


Like, doesn’t hit the same all-time high that last week.

Or last month’s video were posted.

They are all experiencing at a, at a nano level.

The very thing that The philosopher.

William Smith was talking about that achieving Fame is beautiful and losing.


It is torture.

I-i’m not really on Tick-Tock that much.

We have a tick, tock Channel people should subscribe to it but I’m not like a consumer of tick-tock I’m not on Instagram so I’m not as in these environments is a lot of other people are but I do wonder if that’s a small part of the the this sort of tsunami of negative Vibes that seems to be overcoming the younger generation.


I was going to mention when you talk about the, the explosion in teenage depression.

Have you seen an explanation that is not tied to social media?

Or is that, that is, is that part of it?

Or that is everything, it’s definitely not everything.


And in fact, the study is about the effects of social media are not as persuasive.

As I would expect them to be the effect sizes or a pretty are pretty small compared to the Normos change that, we’ve seen in teenage depression, but I think there’s two other factors that are worth talking about maybe three I’ll try to see if I can remember all of them.


By the time I finish this answer.

Number one is that social media use is not just about the time that people spend on the phone is about the time that they don’t spend in the physical world.

According to teen self-reports, they have fewer friends and they used to, they spend less time they used to outside, they spend less time playing sports and they used to there’s just less engagement with the physical world with just biologically evolutionarily speaking.


Seeking has to be pretty good for wellbeing because we’ve been in that physical world for millions of years.

Number two, there’s been some changes in parenting that are pretty important.

A shift toward a common of the parenting which is about making sure that young people feel as little distress as possible, which is difficult for a world that will routinely deliver distress to you on a daily basis.


And so young people are essentially less emotionally prepared for being an adult.

And then finally, and this, I actually put quite a lot of emphasis And even though it’s slightly an elite explanation, I think that the change in the way that parents treat College expectations has really changed and that young people have much more pressure to totally fill their lives with all these extracurricular activities, and don’t have a lot of time to lift up and think, you know, it’s okay if I don’t get into Williams college and only quote, unquote, only get into like a good State School in New York, in New York state and the pressure that’s been put on young people in terms of the college.


Rat race has really changed.

That’s not everything, but those are a couple of the non-social media variables that all make sense.

And what’s interesting about all three of those plus social media, is just my inability to see how many of those change in a significant way.


You can imagine a world which all those things get worse.

Maybe that the maybe the part about college you could see kind of diminishing there has been a fairly substantial drop in college applications.

Last two years, maybe like the importance of, where did you go to school?

Will lower?

And we’ll lower in importance but all the other things it’s hard to imagine how those things, take a serious turn.


And if anything you see people like by the month, by the year, becoming more addicted to social media, including myself, and it’s really hard to see how that turns I think, you know, in the last week I have I would have serious doubts in this will ever occur, but there’s been rumors shattered.

I think all unfounded that the United States will ban Tick-Tock again.


Like I don’t I don’t think that’s going to happen but I think a lot of people loved the idea of it and you can see them getting gleeful at the idea of it because I think the only Leeway to break, the addiction is to have somebody like forcibly, take it away from you.

The idea of like oh I’m going to regulate my own social media use.

It’s just impossible and you know it’s bad for you but I’m like there’s no way I can put this down impossible.


I need someone to take away the keys from me.


It’s like, we’re all kids hitting ourselves in the face with a plastic Hammer, waiting for Mom and Dad to take the plastic hammer out of our hands.

It’s like please.

That is that okay, if you’re five years old, but it’s like kind of pathetic.

When you’re talking about a society that I can involves adults and like I am.


I’m calling you pathetic?

I’m calling myself.

I think there is a I wish I think in part one of the solutions here is that we need a new way to talk about educated discipline that we need like clearer language including from the media about what discipline is and how much power and agency.


We have over our lives to fix the things that are bringing us to stress.

This frankly is probably another podcast episode but I I do think that, you know I again nothing is mono casa.

All here, social media isn’t mono.

Causal, accommodate parenting is a mono causal, but I do think that another variable in this jambalaya is that there is a lot more reading of negative news.


That makes people feel like, the problems in the world are too large to be solved and that it therefore encourages a sense of almost learned helplessness and doom.

And I think that in all of these things that were talking about whether it’s parents Styles or social media use for the way that we talk about the future climate change and news media.


This is all culture and the tough thing about culture is that there’s so many inputs were all responsible for it but the good news is it’s not like some physical reality.

It’s not like gravity.

Like this is something we actually can change because it’s just coming from us.



So and there sometimes I think 2 or it’s not just people are reading more negative news, they’re just reading more news in general.

It used to be 30 40 years ago.

Maybe, your parents read the morning newspaper.

You as a teenager or young adult, probably didn’t.

Maybe you watched Walter Cronkite for seven minutes in the evening and that was kind of your exposure to news.


Whereas today, a lot, a huge percentage of people, even if they don’t really know, it are bombarded with news headlines, they’re not necessarily going to or, but in their Facebook page on Twitter.

People are other people are posting news.

They’re just constantly almost all day long are being hit with new stories in a way.


That would be so foreign to somebody 30 or 40 years ago.

I think 30, 40, 50 years ago.

There was a lot of negative news.

There were a lot of problems.

In the world, that was accurately covered by the media.

People just didn’t weren’t as exposed to it as much as they are now.

And maybe it was even if you are a News Junkie. 30 years ago, you read the morning paper and you watch the evening news and that was kind of it.


Whereas today, it’s like a slow drip all day long, all day.

Long of news of news headlines.

That’s my own experience.

Yeah, I want to offer up this back into investing at the end but you know one way in which this connects the investing conversation is that it raises the question?

You know, is more information.


Always better.

The fact, that young people today have access to more information about the world and also are the most oppressed most anxious generation in recorded modern history might not be a coincidence and it makes me wonder about the fact that like you have a lot of people who learned in the last few years, to be these day traders who had access to, you know, headlines that are coming though, through the over the transom on, you know, Wall Street Journal Bloomberg and CNN and thinking, oh, you know, I can, I can play with this, but sometimes I know, it seems to me like, more Information more of the flood doesn’t necessarily make you a wiser person or wiser investor.


It’s you can definitely say, I don’t know.

I’ll I’ll take that back.

I know if you can definitely say but to me it seems fairly likely that the average person in the last 15 or 20 years is not more informed but they are angrier.

There’s this quote this is great quote from Benedict Evans where he says I’m paraphrasing he says the more that people discover new opinions online.


The angrier they become that of the different opinions exist.


And that’s that, I that I think is really true.

And a lot of time that’s spent online is not bleeding.

More information to learn about the world.

It’s you are learning about the world, but you’re learning that other people disagree with you.

That makes you very angry at.


So I think if you were to flip it and say, would we be better off in a time machine going back, 30 years ago, and killing the internet, killing social media would people be better today.

The answer is obviously, no, I think, I think it’s no way.

It’s not even close, but does that mean that it was?


It is like purely, net positive.

And if or that is it is it is purely positive in every aspect and there aren’t other areas of it that have led to depression and bad thoughts and negativity and and tribal affiliations of course.

And then you start to wonder like where does that end?

Does that keep compounding for the next?


50 years is a compound for the next hundred years.

It’s definitely compounded over the last 10 years and it’s compounding exponentially.

So then you just, you know, if you have an appreciation for what compound growth can do And then and what it can do over a generation or two generations.


And you see what’s happened with the divulgence that Divergence in people’s opinions and their the increase in tribalism?

That’s that’s a pretty terrifying thing to contemplate.

Yeah, I think you know discipline and self regulation is one of the hardest things to teach at a cultural level.


It has to be cultivated individually and that’s one of the one of the topics frankly than trying to write about trying and struggling to write about is, you know, If finding a way to merge two philosophies that I have that are somewhat intention on the one hand, I think, you know, thinking globally.


I care so much about human progress about recognizing and identifying the problems that exist in the world and figuring out the most effective solutions to them which requires one to be really fixated on structures that you don’t control very much like you know, capitalism and globalization and the pace of decarbonization and the electricity grid and meanwhile like happiness is the Dependent upon an entirely different set of factors.


A set of factors that you do control your thoughts, your emotions your behavior.

And so there’s this tension that I’m thinking about between sort of being progress, minded on the one hand globally and being stoic minded individually and, you know, braiding those two perspectives together.

I think is a really it’s a really difficult and you know, potentially important project.


So last thoughts, if you have any direction for me as I tried to sort of is obstructing through this piece for the Atlantic.

I would, I’d be happy to hear me.

Yai chai, totally agree with that.

I think for most people, not everybody, but most people including myself, if you really wanted to increase your happiness and well-being, the solution is probably like move to the countryside and take a painting and meditation, or it’s something, it’s something like that.


Like, cut yourself some from the world, right?

Like most?

Yes, met at least seal yourself off from the world, right?

And focus on things like meditation and things like that.

But then, if you said, okay like Morgan go, dude, I’m like, no, no, no, I want to keep working hard.

I want to keep making progress.

I want to keep pushing ahead.

And so there is, I mean, there is some sense in like the cliche of like you gained the pleasure, like the is from the struggle.


That’s that’s what you, that’s what we’re going for is and that’s where that’s where the good stuff comes from.

There is this thing in economics called The Tragedy of the commons, which is when a whole society exploits a resource like oil in a way that is dis, is bad for everybody, but at the end of visual level, it makes sense.


For you to go take more oil and burn more oil because everyone else is doing it.

Anyway, so that’s the tragedy of the commons and I think, at the economic level, least, like it, Knighted states.

There’s almost the opposite of that.

Where people are benefiting the whole of society by working so hard and creating new technologies with more Innovation, but they’re doing it at the expense of their own life.


It’s like people are waking up in there.

Like I need to go innovate and do more and work harder and make the world better with these new products.

But I’m going to do it at the expense of my own sleep and my own well-being and my own satisfaction amount happiness which is amazing on one hand and I think that’s why we live in a world of so much.

Abundance and such amazing technology and medical Innovation etcetera but it’s pretty sad.


Sad at the end of visual level, it’s pretty tough.

And I think it’s hard to get out of that race.

If everyone else is playing that game, if everyone else is playing it and you want to compare yourself to them and your sense of well-being and identity is relative to everybody else.

It’s hard to step away and move to the country and take a pending in meditation.


We’re going to hassle.

Thank you very, very much.

Thanks, Eric.

Thank you for listening.

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