The Psychology of Money. Morgan Housel

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СКАЧАТЬ any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.

      2. Social comparison is the problem here.

      Consider a rookie baseball player who earns $500,000 a year. He is, by any definition, rich. But say he plays on the same team as Mike Trout, who has a 12-year, $430 million contract. By comparison, the rookie is broke. But then think about Mike Trout. Thirty-six million dollars per year is an insane amount of money. But to make it on the list of the top-ten highest-paid hedge fund managers in 2018 you needed to earn at least $340 million in one year.14 That’s who people like Trout might compare their incomes to. And the hedge fund manager who makes $340 million per year compares himself to the top five hedge fund managers, who earned at least $770 million in 2018. Those top managers can look ahead to people like Warren Buffett, whose personal fortune increased by $3.5 billion in 2018. And someone like Buffett could look ahead to Jeff Bezos, whose net worth increased by $24 billion in 2018—a sum that equates to more per hour than the “rich” baseball player made in a full year.

      The point is that the ceiling of social comparison is so high that virtually no one will ever hit it. Which means it’s a battle that can never be won, or that the only way to win is to not fight to begin with—to accept that you might have enough, even if it’s less than those around you.

      A friend of mine makes an annual pilgrimage to Las Vegas. One year he asked a dealer: What games do you play, and what casinos do you play in? The dealer, stone-cold serious, replied: “The only way to win in a Las Vegas casino is to exit as soon as you enter.”

      That’s exactly how the game of trying to keep up with other people’s wealth works, too.

      3. “Enough” is not too little.

      The idea of having “enough” might look like conservatism, leaving opportunity and potential on the table.

      I don’t think that’s right.

      “Enough” is realizing that the opposite—an insatiable appetite for more—will push you to the point of regret.

      The only way to know how much food you can eat is to eat until you’re sick. Few try this because vomiting hurts more than any meal is good. For some reason the same logic doesn’t translate to business and investing, and many will only stop reaching for more when they break and are forced to. This can be as innocent as burning out at work or a risky investment allocation you can’t maintain. On the other end there’s Rajat Guptas and Bernie Madoffs in the world, who resort to stealing because every dollar is worth reaching for regardless of consequence.

      Whatever it is, the inability to deny a potential dollar will eventually catch up to you.

      4. There are many things never worth risking, no matter the potential gain.

      After he was released from prison Rajat Gupta told The New York Times he had learned a lesson:

      Don’t get too attached to anything—your reputation, your accomplishments or any of it. I think about it now, what does it matter? O.K., this thing unjustly destroyed my reputation. That’s only troubling if I am so attached to my reputation.

      This seems like the worst possible takeaway from his experience, and what I imagine is the comforting self-justifications of a man who desperately wants his reputation back but knows it’s gone.

      Reputation is invaluable.

      Freedom and independence are invaluable.

      Family and friends are invaluable.

      Being loved by those who you want to love you is invaluable.

      Happiness is invaluable.

      And your best shot at keeping these things is knowing when it’s time to stop taking risks that might harm them. Knowing when you have enough.

      The good news is that the most powerful tool for building enough is remarkably simple, and doesn’t require taking risks that could damage any of these things. That’s the next chapter.

      Lessons from one field can often teach us something important about unrelated fields. Take the billion-year history of ice ages, and what they teach us about growing your money.

      Our scientific knowledge of Earth is younger than you might think. Understanding how the world works often involves drilling deep below its surface, something we haven’t been able to do until fairly recently. Isaac Newton calculated the movement of the stars hundreds of years before we understood some of the basics of our planet.

      It was not until the 19th century that scientists agreed that Earth had, on multiple occasions, been covered in ice.15 There was too much evidence to argue otherwise. All over the world sat fingerprints of a previously frozen world: huge boulders strewn in random locations; rock beds scraped down to thin layers. Evidence became clear that there had not been one ice age, but five distinct ones we could measure.

      The amount of energy needed to freeze the planet, melt it anew, and freeze it over yet again is staggering. What on Earth (literally) could be causing these cycles? It must be the most powerful force on our planet.

      And it was. Just not in the way anyone expected.

      There were plenty of theories about why ice ages occurred. To account for their enormous geological influence the theories were equally grand. The uplifting of mountain ranges, it was thought, may have shifted the Earth’s winds enough to alter the climate. Others favored the idea that ice was the natural state, interrupted by massive volcanic eruptions that warmed us up.

      But none of these theories could account for the cycle of ice ages. The growth of mountain ranges or some massive volcano may explain one ice age. It could not explain the cyclical repetition of five.

      In the early 1900s a Serbian scientist named Milutin Milanković studied the Earth’s position relative to other planets and came up with the theory of ice ages that we now know is accurate: The gravitational pull of the sun and moon gently affect the Earth’s motion and tilt toward the sun. During parts of this cycle—which can last tens of thousands of years—each of the Earth’s hemispheres gets a little more, or a little less, solar radiation than they’re used to.

      And that is where the fun begins.

      Milanković’s theory initially assumed that a tilt of the Earth’s hemispheres caused ravenous winters cold enough to turn the planet into ice. But a Russian meteorologist named Wladimir Köppen dug deeper into Milanković’s work and discovered a fascinating nuance.

      Moderately cool summers, not cold winters, were the icy culprit.

      It begins when a summer never gets warm enough to melt the previous winter’s snow. The leftover ice base makes it easier for snow to accumulate the following winter, which increases the odds of snow sticking around in the following summer, which attracts even more accumulation the following winter. Perpetual snow reflects more of the sun’s rays, which exacerbates cooling, which brings more snowfall, and on and on. Within a few hundred years a seasonal snowpack grows into a continental ice sheet, and you’re off to the races.

      The same thing happens in reverse. An orbital tilt letting more sunlight in melts more of the winter snowpack, which reflects less light the following years, which increases temperatures, СКАЧАТЬ