Huberman Lab
Understand & Apply the Psychology of Money to Gain Greater Happiness | Morgan Housel
02 Dec 2024
In this episode, my guest is Morgan Housel, an expert in private wealth generation and management and author of the bestselling book The Psychology of Money. We discuss how desiring, pursuing, saving, and spending money impact our psychology and perception of wealth. We explore why people tend to either overspend or oversave and examine the most common mistakes made in the pursuit of financial freedom. Additionally, we discuss how to best use money — and one’s relationship with it — as a tool to create psychological security, freedom, and a deeper sense of life purpose. We also delve into the impact of purchases, social media, and wealth signaling on our internal reward circuits, the dangers of using money as a gauge of career progress or self-worth, and the healthiest psychological stances to adopt while building wealth at any level. By the end of the episode, listeners will have gained numerous practical tools for making smarter financial decisions and should have a clearer understanding of the role money plays in their psychology, happiness, and life. Access the full show notes for this episode at hubermanlab.com. Pre-order Andrew's new book, Protocols: protocolsbook.com Thank you to our sponsors AG1: https://drinkag1.com/huberman Wealthfront**: https://wealthfront.com/huberman BetterHelp: https://betterhelp.com/huberman ROKA: https://roka.com/huberman Function: https://functionhealth.com/huberman **This experience may not be representative of the experience of other clients of Wealthfront, and there is no guarantee that all clients will have similar experiences. Cash Account is offered by Wealthfront Brokerage LLC, Member Finra/SIPC. Promo terms and FDIC coverage conditions apply. Same-day withdrawal or instant payment transfers may be limited by destination institutions, daily transaction caps, and by participating entities such as Wells Fargo, the RTP® Network, and FedNow® Service. New Cash Account deposits are subject to a 2-4 day holding period before becoming available for transfer. Timestamps 00:00:00 Morgan Housel 00:02:13 Sponsors: Wealthfront & BetterHelp 00:05:11 Spending Habits & Cynicism 00:08:44 Tool: Money & Future Regrets 00:16:07 Money Management Extremes; Credit & Hope 00:23:17 Money as a Tool, Happiness, Independence & Purpose 00:27:30 Sponsors: AG1 & ROKA 00:30:11 Unstructured Time; Independence, Identify & Money; Addiction 00:39:04 Longevity, Health & Money 00:47:42 Ambition, Social Media, Fame & Social Debt 00:53:37 Sponsor: Function 00:55:24 Resume Virtues vs. Eulogy Virtues 00:57:52 Compound Interest, Math vs. Behavior 01:01:42 Dopamine & Time, Marshmallow Test & Distraction 01:09:58 Motivation, Pleasure; Relationships 01:14:38 Freedom, Tool: Savings & Independence 01:19:06 Peak-End Rule, Autonomy & Independence; Elder vs. Elderly 01:24:07 Familial Wealth & Identity; Entrepreneurs 01:31:53 Life Purpose; Dogs; Social & Historical Comparison 01:39:58 Social Comparison & Geography, Angst 01:46:07 Carrot vs. Stick, Identity, Tool: Verb States & Energy 01:56:43 Envy & Spending Money; Wealth & Birth Rates 02:01:27 Tools: Parent Modeling; Resentment, Individual Goals 02:07:15 Purpose, Happiness & Money 02:13:05 Zero-Cost Support, YouTube, Spotify & Apple Follow & Reviews, Sponsors, YouTube Feedback, Protocols Book, Social Media, Neural Network Newsletter Disclaimer & Disclosures Learn more about your ad choices. Visit megaphone.fm/adchoices
Full Episode
Welcome to the Huberman Lab Podcast, where we discuss science and science-based tools for everyday life. I'm Andrew Huberman, and I'm a professor of neurobiology and ophthalmology at Stanford School of Medicine. My guest today is Morgan Housel. Morgan Housel is a partner at the Collaborative Fund and an expert in private wealth generation and management.
He is also the author of the spectacularly bestselling book, The Psychology of Money. And today we talk about the psychology of money. We talk about how money can change your psychology. We talk about how most people tend to lie at the extremes of either saving too much money or spending too much money.
And we talk about how most people get it completely wrong when it comes to framing in our minds what money is, what its real value is, and its ability to generate happiness within us. And no, I am not going to tell you, and Morgan is not going to tell you, that beyond a certain dollar amount, you don't increase your happiness.
Because as we all know, money cannot buy happiness, but it can buffer stress. We acknowledge that from the outset. And then Morgan goes on to explain that really what we're seeking when we talk about seeking wealth or money, is freedom. Freedom is really about independence. And that if we are constantly in pursuit of wealth, well, then we are not truly free or independent.
So today's discussion is as much about being happy, being free, feeling independent, feeling free of stress as it is about this thing that we call money. So in other words, Morgan explains not just how to generate and manage monetary wealth. He explains that, but he also explains how to organize your life in and around this thing that we call career, the pursuit of wealth and happiness.
And I can think of few topics as important as today's topic. I read Morgan's book, The Psychology of Money, and I loved it. I also loved today's discussion because I'm certain that after it's done, you will realize that you've probably been thinking about wealth and money incorrectly in a number of ways, and you've probably been pursuing it incorrectly in a number of ways.
But by asking yourself certain probe questions that Morgan raises today and answering those questions, you can arrive in a place where your relationship to money and your pursuit of it really clearly matches your particular goals. Before we begin, I'd like to emphasize that this podcast is separate from my teaching and research roles at Stanford.
It is, however, part of my desire and effort to bring zero cost to consumer information about science and science related tools to the general public. In keeping with that theme, I'd like to thank the sponsors of today's podcast. Our first sponsor is Wealthfront. I've been using Wealthfront for nearly a decade as my high yield cash account and I absolutely love it.
Personally, I'm sometimes hesitant to invest money given the risks involved. So I often prefer to keep it in my Wealthfront cash account where I'm able to earn 4.25% annual percentage yield on my deposits and you can as well. With Wealthfront, you can earn 4.25% APY on your cash through partner banks until you're ready to either spend that money or invest it.
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