MI171: THE PSYCHOLOGY OF MONEY BOOK REVIEW

W/ CLAY FINCK

21 May 2022

On today’s episode, Clay Finck provides his biggest takeaways from reading The Psychology of Money by Morgan Housel, the story of how Jesse Livermore built a fortune trading stocks, only to eventually lose it all, why it’s better to study broad trends and patterns rather than specific individuals, Warren Buffett’s secret weapon to becoming one of the richest people on the planet, how Morgan Housel thinks about and handles his own finances, and much more!

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IN THIS EPISODE, YOU’LL LEARN:

  • Clay’s biggest takeaways from reading The Psychology of Money by Morgan Housel.
  • The story of how Jesse Livermore built a fortune trading stocks, only to eventually lose it all.
  • Why it’s better to study broad trends and patterns rather than specific individuals.
  • Warren Buffett’s secret weapon to becoming one of the richest people on the planet.
  • What Morgan Housel’s definition of wealth is.
  • Why trying to make market predictions is a fool’s game.
  • How Morgan Housel thinks about and handles his own finances.
  • And much, much more!

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TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

Clay Finck (00:02):

Hey, everyone. Welcome to the Millennial Investing Podcast. I’m your host, Clay Finck. Today is another release of our mini episode series that is released every Saturday. This is the type of episode where it’s just me diving into a specific topic related to personal finance, money, investing and other money challenges that millennials might face in regards to their finances. These episodes will be shorter than our other episodes, where we typically interview professionals and industry experts in the finance space.

Clay Finck (00:32):

If you have any topics or questions you’d like me to dive into future mini episodes, feel free to DM me on Twitter @Clay_Finck, that’s C-L-A-Y_F-I-N-C-K, or you can shoot me an email at clay@theinvestorspodcast.com. If you enjoy this episode, I would really appreciate it if you shared it with just one friend to help us continue to spread the word of the show. With that, let’s dive right in.

Intro (00:59):

You’re listening to Millennial Investing by the Investor’s Podcast Network, where your hosts, Robert Leonard and Clay Finck, interview successful entrepreneurs, business leaders, and investors to help educate and inspire the millennial generation.

Clay Finck (01:19):

All right. During this episode, I’m going to be covering Morgan Housel’s book, The Psychology of Money. This is one of my favorite personal finance books. I thought it would be a great one to read through and give you guys a rundown on my biggest takeaways from reading it. One big lesson I learned from this book is that doing well with money has little to do with how smart you are and a lot to do with how you behave.

Clay Finck (01:42):

Behavior is hard to teach, even to really smart people. A genius can think he can outsmart the market and take too much risk. An ordinary person with little financial education can become very wealthy if they have a handful of behavioral skills that have nothing to do with intelligence. Investing is one of the few games where an ordinary person can have extraordinary results that outpace much of Wall Street, simply by following a number of very simple tried and true investment principles and strategies.

Clay Finck (02:12):

All right. Let’s dive right into the book. Chapter one was titled, No One’s Crazy. He talks about how everyone has their own lens and how they view the world. That is largely driven by the experiences that person has been through. It’s one thing to study history and learn from it and it’s another thing to actually live through history.

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