2022 May - The Psychology of Money, Range

The Psychology of Money by Morgan Housel

I’ve always been interested in behavioral economics and why people make certain choices around money/finance. Morgan has been one of my favorite financial writers for the last decade. He simplifies complex concepts into something everyone can understand and immediately apply into their lives. Although the book is considered a “finance” book, I believe it can be quickly applied across many domains of our lives. I highly recommend this one. Check out an interview with Morgan here (scroll down a few paragraphs for links to the interview or the “play” button to listen directly from the website).

Here are just a few of my favorite quotes:

  • how you behave is more important than what you know

  • we think about and are taught about money in ways that are too much like physics (with rules and laws) and not enough like psychology (with emotions and nuance)

  • Physics isn’t controversial. It’s guided by laws. Finance is different. It’s guided by people’s behaviors. And how I behave might make sense to me but look crazy to you.

  • “some lessons have to be experienced before they can be understood.” We are all victims, in different ways, to that truth

  • The line between bold and reckless can be thin. When we don’t give risk and luck their proper billing it’s often invisible.

  • You’ll get closer to actionable takeaways by looking for broad patterns of success and failure. The more common the pattern, the more applicable it might be to your life.

  • It gets dangerous when the taste of having more—more money, more power, more prestige—increases ambition faster than satisfaction.

  • Happiness, as it’s said, is just results minus expectations.

  • Benedict Evans says, “The more the Internet exposes people to new points of view, the angrier people get that different views exist.” !!!

Range by David Epstein

This might be one of the more fascinating books I’ve read in the last year or so. It tries to answer the question of “What are the benefits of being a generalist versus a specialist?” The quintessential example provided in the book was comparing Tiger Woods (the specialist) to Roger Federer (the generalist). The former specialized in attaining the peak of his sport. The latter played a few different sports before deciding to focus on tennis; he has since become the most dominant name in the sport of men’s tennis. This concept of Generalist vs Specialist is explored deeply and might be the antidote you’ve been waiting for to rescue you from “sticking with it” for a bit too long. Additionally, I think it introduces interesting conversations into how to encourage children to be more generalist before deciding where to focus their energies. This excellent podcast interview of the author is a great accompaniment and introduction into the book. Also, this blog post by Morgan Housel (previous author!) rhymes really well with concepts in the book.

Here are just a few of my favorite quotes from Range:

  • highly credentialed experts can become so narrow-minded that they actually get worse with experience, even while becoming more confident—a dangerous combination.

  • Modern work demands knowledge transfer: the ability to apply knowledge to new situations and different domains.

  • The more constrained and repetitive a challenge, the more likely it will be automated, while great rewards will accrue to those who can take conceptual knowledge from one problem or domain and apply it in an entirely new one.

  • Improv masters learn like babies: dive in and imitate and improvise first, learn the formal rules later.

  • Deep analogical thinking is the practice of recognizing conceptual similarities in multiple domains or scenarios that may seem to have little in common on the surface.

  • we learn who we are only by living, and not before.

  • What sounds like hyperspecialization today was actually a bold hybrid at the time.

  • Don’t confuse the healthy development of a work ethic with the premature commitment to a singular passion.

  • Compare yourself to yourself yesterday, not to younger people who aren’t you. Everyone progresses at a different rate, so don’t let anyone else make you feel behind. You probably don’t even know where exactly you’re going, so feeling behind doesn’t help.

Links!

Jason Boddu