Morgan Housel offers insights on wealth, greed, and happiness in his latest lessons.

• Morgan Housel, a partner at The Collaborative Fund, published a best-selling book in 2020, titled The Psychology of Money.
• Housel has released a new book, "Same As Ever: Timeless Lessons on Wealth, Greed, and Happiness."
• Morgan's previous book was successful due to its use of short chapters, paragraphs, sentences, and an emphasis on storytelling to reveal deep insights into broad topics.

Morgan Housel will be a guest on HalfTime Report at 12:35 PM ET and on ETF Edge at 1:10 PM.

Morgan Housel is the Mark Twain of financial writers, known for his wit, brevity, and homespun style, with a touch of sarcasm, and a penchant for uncovering the underlying truths in the world of finance.

The Collaborative Fund partner Housel became a best-selling author with the 2020 publication of his book, The Psychology of Money. The book explored the relationship between money and human behavior, with the main thesis being to maximize what you can control, including managing your own expectations, knowing when to stop changing the goalposts, and understanding the psychology behind financial decisions.

The book, written by Housel, was brief (250 pages) and contained his practical advice on savings, the benefits of compounding interest, and numerous anecdotes about the role of luck and risk in achieving success. The book also highlighted how fortunate individuals, such as Bill Gates, received key breaks that allowed them to achieve greatness, like attending Lakeside High School in Seattle, one of the first high schools to have a computer.

The book has sold approximately 4 million copies worldwide.

If you sell 10,000 copies of a financial book, you are doing exceptionally well.

Housel has released a new book, "Same As Ever: Timeless Lessons on Wealth, Greed, and Happiness."

Morgan's previous book was successful due to its use of short chapters, paragraphs, sentences, and an emphasis on storytelling to reveal deep insights into broad topics.

He is striving to provide timeless wisdom that will help people view life in a broader perspective.

Morgan posits that the motivations that have driven individuals throughout history, such as fear, love, hate, greed, and envy, continue to influence our actions today, making much of what occurs predictable.

The role of envy

Charlie Munger observed that envy, not greed, is the driving force behind the world.

Morgan presents a thoughtful reflection: What drives our longing for the past, and is it accurate to believe it was superior to the present?

The 1950s, viewed by baby boomers and their parents as a golden age, seems to be a time of great nostalgia.

One could achieve a modest, middle-class lifestyle with a single wage earner.

The notion that individuals lived more contentedly in the 1950s is not substantiated by evidence.

Mortality rates were much higher. People died far younger.

Median family income adjusted for inflation has significantly increased among today's families compared to previous generations, according to Housel.

• 1955: $29,000
• 1965: $42,000
• 2021: $70,784

Gains in productivity were the primary reason for the nearly 50 percent increase in median hourly wages adjusted for inflation from 1955 to today, according to Housel.

More stats about the “golden era” of the 1950s versus today:

• In 1950, the homeownership rate was 12 percentage points lower than it is currently.
• Despite having more occupants, an average home was a third smaller than today's.
• In 1950, food accounted for 29% of the average household's budget, compared to 13% today.
• Workplace deaths were three times higher than today.

What is it about the 1950s that makes us feel nostalgic? It's likely due to envy and our innate desire to compare ourselves to others. In the 1950s, the gap between us and those around us was smaller.

After World War II, the National War Labor Board's preference for flatter wages continued to influence wage policies, according to Housel.

In the 1950s, only a few individuals resided in affluent financial circles, and everyone lived in modest homes. People went on camping trips because it was a popular activity during that time.

In the 1980s, changes in the tax code and other factors led to the emergence of a wealthy elite, which inspired the aspirations of the masses, according to Housel.

People looked around, saw that some were doing better and some much better, and became envious. Then, they became angry.

Social media has significantly increased envy by allowing people to view the lifestyles of others, which are often exaggerated, manipulated, and idealized. Through a carefully curated highlight reel of their lives, individuals compare themselves to their peers, focusing on the positives while concealing the negatives.

The capacity to express a desire for something and question why one does not possess it has become more powerful than ever before. Modern economies excel at producing three things: affluence, the display of wealth, and intense jealousy towards others' wealth.

Envy triumphs. Same as ever.

What does the nostalgia for the 1950s in Housel's book reveal beyond envy?

According to Housel, this nostalgia is a prime example of how expectations can outpace reality.

Managing expectations

Charlie Munger stated that the key to a happy life is having low expectations. He emphasized that having unrealistic expectations can lead to a lifetime of misery. Instead, one should have reasonable expectations and accept life's outcomes, both good and bad, with a degree of stoicism.

Housel's conclusion: "Wealth and happiness is a two-part equation: what you have and what you expect/need. When you recognize that each part is equally important, you understand that the excessive focus on acquiring more and the disregard for managing expectations is illogical, particularly since the expectations aspect can be more within your control."

Everyone experiences unique circumstances that shape their lives, such as their income, location, living arrangements, and possessions. These circumstances have a tangible reality, as evidenced by your mortgage, home or apartment, and relationship status.

Despite your present situation, there are both necessities and aspirations. Necessities are the fundamental requirements for survival, such as housing and nourishment. Aspirations, on the other hand, are the desires that people strive for, such as a larger home, a larger vehicle, and a larger lifestyle. These aspirations are being driven up by the widening wealth gap and are being amplified by social media.

Your "wants" are subjective and do not have an external reality. You don't need to envy others for their possessions, as your envy is a result of your own thoughts. You have the power to change those thoughts and view your circumstances in a different light by altering your relationship with your desires.

Managing expectations is often more within your control than managing circumstances.

On risk taking

In The Psychology of Money, Housel discusses the topic of managing risk and revisits it in his writing.

In personal finance, the ideal savings rate is when it feels slightly uncomfortable. It should make you feel uneasy; it should be a little too much.

Viewing geniuses like Elon Musk, Steve Jobs, and Walt Disney in the right way is crucial.

Why do so many events that are supposed to occur once in a century appear to happen frequently?

On why companies are much more than just the sum of their financial figures

The uncertainty of the future cannot be predicted, and it is essential to embrace it.

On the value of patience

On why compounding interest is the key to understanding stock market investing

On what the best financial plan looks like

On trying to understand people who don’t agree with you

Same as ever?

Housel concludes with a set of questions that readers should reflect upon, such as "What belief do I hold that is most likely to shift? What has consistently been true? What remains unchanged?"

The book is ambitious and covers investing, self-help, leadership, and motivation & personal success. Its primary message is that despite the acceleration of technology, politics, and other trends, human behavior remains unchanged.

The new technology we possess is merely a means to stimulate the same ancient feelings that drive us.