The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness by Morgan Housel

We all have an incomplete view of the world, but we form a complete narrative to fill in the gaps. We know a lot less than we think we do. Risk is what is left when you think you have thought of everything. Our focus on what we know leads to overconfidence. People think their fate is almost entirely in their own hands. (Doug: It helps to stay humble.)

Medical doctors and financial advisors are alike in that they recommend a course of action and the patient/client makes the final decision. The best guidepost for all financial decisions is “does it help me sleep at night.” Time makes little things grow and mistakes fade away.
One of the best reasons to save is to be able to handle things that are impossible to predict. Savings that aren’t earmarked for anything are a hedge against life’s surprises. Avoid extreme investments or those with the potential for ruin. There is no single right answer, just the answer that works for you.

Here Morgan confesses how he invests his money. First, he paid off his mortgage as fast as he could. This is indefensible as you should be able to make more with the money you use to payoff your mortgage than the interest itself. It’s just that Morgan feels more comfortable not having mortgage payments. (Doug: I did this too.)
Next, he keeps 20% in cash. This is hard to defend too, but he does this so he doesn’t have to liquidate stocks if unexpected costs arise. The rest of his money is invested in low cost index funds (Vanguard). He has lived below his means and as a result, he is now independent. That should be everyone’s goal. Since only a few money manages beat the S&P 500, he recommends that you need not try yourself. You can, if you wish, as long as it helps you sleep at night.

This starts with all of the soldiers coming home from the war (14.5 million) ready to purchase houses and cars and go to college and brings us up to today. It’s the kind of summary that most history books should have.

Morgan studied economics at the University of California. As a financial journalist, he cut his teeth at The Motley Fool, a firm that provides financial advice; he was a columnist for the company. It was during this time that he became a regular contributor to the Wall Street Journal. Thanks to his outstanding performance, he would later become the firm’s Senior Analyst. In 2016, Housel relinquished his position at the Motley Fool and became a partner at The Collaborative Fund.