Morgan Housel, an award winning financial columnist, is gifted at expressing complex ideas clearly and with humor. Today a partner at The Collaborative Fund, he posted this recent blog, “Short Money Rules”, and I would add “to live by”.

  • Above-average results require not being afraid of looking wrong.
  • Most people are afraid of looking wrong.
  • Good investing is 50% psychology, 48% history, 2% finance.
  • Great investing is 40% skill, 20% luck, 40% inability to tell which is which.
  • Bad investing is 40% overconfidence, 40% fees, 20% denial that keeps it all going.
  • Getting rich is hard.
  • Staying rich is harder.
  • Being satisfied with your riches is hardest.
  • Some good advice is simple but made complicated because professionals can’t charge fees for simple stuff.
  • The fact that you can’t charge fees for it is part of what makes it good advice.
  • Wealth is what you don’t see – money that hasn’t been spent, cars that haven’t been bought, jewelry that hasn’t been purchased, stuff that hasn’t been bought.
  • Most people can afford not to be a great investor.
  • Most people can’t afford to be a bad investor.
  • The combination of the last two is the foundation of investing risk.
  • Past results cause confidence to rise faster than ability.
  • You’re not obligated to have opinion about anything. Unless you’re paid to do so.
  • You’re obligated to not have an opinion about things you don’t understand. Unless you’re paid to do so.
  • Be wary of people who are paid to give opinions.
  • All market growth is just earnings and what people want to pay for those earnings.
  • All economic growth is just population growth and how productive those people are.
  • Being nice to people is the easiest career competitive advantage.
  • Being smarter than others is the hardest.
  • Options make people happy.
  • Debt reduces options.
  • Obvious risk: not having three months of emergency savings.
  • Underappreciated risk: having three months of emergency savings when the average duration of unemployment is six months.
  • People like weekends because it’s when they have the most control over their time; financial goals should keep this in mind.
  • John D. Rockefeller was worth the equivalent of $340 billion, but he never had penicillin, sunscreen, or Advil. For most of his adult life he didn’t have electric lights, air conditioning, or sunglasses.
  • Which is to say: Everything about money is results in the context of expectations.
  • When asked, the TCI Foundation responded, “Couldn’t have said it better!”