Chapter
Building Wealth by Living Below Your Means
37:53 - 44:56 (07:03)
Living below your means at any income level is the key to building wealth over time. Focusing on short-term gains can lead to relying on luck, risk, and noise, which can be dangerous for your finances.
Clips
The world has a long history of experiencing breaking points about once every decade, from the Great Depression to COVID-19.
37:53 - 38:50 (00:56)
Summary
The world has a long history of experiencing breaking points about once every decade, from the Great Depression to COVID-19. While this can be difficult to predict, it highlights the importance of having financial safety and security measures in place for short-term stability.
ChapterBuilding Wealth by Living Below Your Means
Episode#222 - Morgan Housel - How To Become Wealthy, Stay Wealthy & Be Happy
PodcastModern Wisdom
The example distinguishes between signal and noise to help investors make the most informed investment decisions.
38:50 - 40:20 (01:30)
Summary
The example distinguishes between signal and noise to help investors make the most informed investment decisions. The listener is presented with a scenario where they have invested in the stock market and need to track the performance of their investment.
ChapterBuilding Wealth by Living Below Your Means
Episode#222 - Morgan Housel - How To Become Wealthy, Stay Wealthy & Be Happy
PodcastModern Wisdom
The shorter the time period you focus on when investing, the more you rely on luck and noise rather than skill.
40:20 - 42:07 (01:47)
Summary
The shorter the time period you focus on when investing, the more you rely on luck and noise rather than skill. The longer you look and the more varied environments you observe, the more you can confidently attribute performance to skill rather than chance.
ChapterBuilding Wealth by Living Below Your Means
Episode#222 - Morgan Housel - How To Become Wealthy, Stay Wealthy & Be Happy
PodcastModern Wisdom
The podcast discusses the subreddit Wall Street Bets, where people make outrageous bets on stocks, and highlights the golden rule of becoming wealthy which is to live below your means and be patient.
42:07 - 43:18 (01:10)
Summary
The podcast discusses the subreddit Wall Street Bets, where people make outrageous bets on stocks, and highlights the golden rule of becoming wealthy which is to live below your means and be patient. These simple rules comprise 90% of finance.
ChapterBuilding Wealth by Living Below Your Means
Episode#222 - Morgan Housel - How To Become Wealthy, Stay Wealthy & Be Happy
PodcastModern Wisdom
Living below your means is the key to building wealth over time, regardless of your income level.
43:18 - 44:56 (01:38)
Summary
Living below your means is the key to building wealth over time, regardless of your income level. Even those with high incomes can struggle to accumulate wealth if they have a tendency to spend their money impulsively.