Little Money Rules

Morgan Housel gives us Little Money Rules that seem to be true everywhere and every time. We better pay heed to these rules.

·        Emotions can override any level of intelligence.

·        Confidence rises faster than ability, especially among young men.

·        An asset’s ability to let you do what you want, when you want, with who you want, is ROI that can’t be found on a spreadsheet.

·        About once a decade people forget that bubbles form and burst about once a decade.

·        Your investing ability is unproven until it’s survived a calamity.

·        Spending money to show people how much money you have is the surest way to have less money.

·        Avoid disaster, be patient, and you don’t need many smart decisions to do well over time.

·        Big words mask little thoughts.

·        You will adjust to most positive financial circumstances, except when it causes you to lose control over your time, which will always hurt.

·        The only way to build wealth is to have a gap between your ego and your income.

·        The goal of investing isn’t to minimize boredom, it’s to maximize returns.

·        It’s easier to lie with numbers than words. As the saying goes, more fiction has been written in Excel than Word.

·        Your circle of competence is smaller than you think. Your susceptibility to bias is larger than you think.

·        Reducing your desires has the same effect as leveraging your assets, but with no downside risk.

·        Solutions to problems can be shockingly simple; getting people to adhere to simple solutions can be shockingly difficult.

·        Debt removes options, savings adds them.

·        Compounding requires absorbing damage so you’re never forced to quit

·        No one’s impressed with what you have.