Same as Ever: A Guide to What Never Changes

by Morgan Housel

A big lesson from history is realizing how much of the world hangs by a thread. Some of the biggest and most consequential changes in history happened because of a random, unforeseeable, thoughtless encounter or decision that led to magic or mayhem.

One is highlighting this book’s premise—to base predictions on how people behave rather than on specific events. Predicting what the world will look like fifty years from now is impossible. But predicting that people will still respond to greed, fear, opportunity, exploitation, risk, uncertainty, tribal affiliations, and social persuasion in the same way is a bet I’d take.

As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.”

What your imagination can’t fathom is the dangerous stuff, and it’s why risk can never be mastered.

Nassim Taleb says, “Invest in preparedness, not in prediction.” That gets to the heart of it.

Two, realize that if you’re only preparing for the risks you can envision, you’ll be unprepared for the risks you can’t see every single time. So, in personal finance, the right amount of savings is when it feels like it’s a little too much. It should feel excessive; it should make you wince a little.

It’s been like this forever. Montesquieu wrote 275 years ago, “If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.”

People gauge their well-being relative to those around them, and luxuries become necessities in a remarkably short period of time when the people around you become better off.

Investor Charlie Munger once noted that the world isn’t driven by greed; it’s driven by envy.

Wealth came so fast to so many that it was jarring. “In the 1930s I worried about how I could eat,” Life quotes one taxi driver. “Now I’m worrying about where to park.”

It’s staggering how expectations can alter how you interpret current circumstances.

Money buys happiness in the same way drugs bring pleasure: incredible if done right, dangerous if used to mask a weakness, and disastrous when no amount is enough.

Today’s economy is good at generating three things: wealth, the ability to show off wealth, and great envy for other people’s wealth.

The first rule of a happy life is low expectations. If you have unrealistic expectations you’re going to be miserable your whole life. You want to have reasonable expectations and take life’s results, good and bad, as they happen with a certain amount of stoicism.

Someone who is determined, optimistic, doesn’t take no for an answer, and is relentlessly confident in their own abilities.

One day, I realized with all these people I was jealous of, I couldn’t just choose little aspects of their life. I couldn’t say I want his body, I want her money, I want his personality. You have to be that person. Do you want to actually be that person with all of their reactions, their desires, their family, their happiness level, their outlook on life, their self-image? If you’re not willing to do a wholesale, 24/7, 100 percent swap with who that person is, then there is no point in being jealous.

People don’t want accuracy. They want certainty.

What you always want to avoid are catastrophic risks. A pilot who crashes once every ten thousand flights is a catastrophe. But our difficulty dealing with probability and large numbers makes us overly sensitive to run-of-the-mill, inevitable risks.

There is a saying that people don’t remember books; they remember sentences.

Everyone knows the story of the sinking of the Titanic, which claimed fifteen hundred lives. But almost no one ever mentions a word about the 1948 sinking of the Chinese ferryboat SS Kiangya, which claimed nearly four thousand lives. Or the 1987 sinking of the ferryboat MV Dona Paz, which killed 4,345 people. Or the capsizing of the MV Le Joola, which claimed 1,863 lives off the coast of Gambia in 2002.

When a topic is complex, stories are like leverage.

The most persuasive stories are about what you want to believe is true, or are an extension of what you’ve experienced firsthand.

Jeff Bezos once said, “The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There’s something wrong with the way you are measuring it.”

I would really love to just compound at fifteen percent per year. Because if I can do that for fifty years that’s just enormous. Just slow and steady against hard problems.

So while there are those that would totally disagree with this and say “Gee, if I could just be a millionaire! That would be the most wonderful thing.” If I could just not have to work every day, if I could just be out fishing or hunting or playing golf or traveling, that would be the most wonderful life in the world—they don’t know life. Because what makes life mean something is purpose. A goal. The battle, the struggle—even if you don’t win it.

Save like a pessimist and invest like an optimist. Plan like a pessimist and dream like an optimist.

There’s a typical path of how people respond to what eventually becomes a world-changing new technology: • I’ve never heard of it. • I’ve heard of it but don’t understand it. • I understand it, but I don’t see how it’s useful. • I see how it could be fun for rich people, but not me. • I use it, but it’s just a toy. • It’s becoming more useful for me. • I use it all the time. • I could not imagine life without it. • Seriously, people lived without it? • It’s too powerful and needs to be regulated. It happens over and over again. It’s very difficult to envision what one small invention has the potential to become one day.

The same thing happens in careers, when someone with a few mediocre skills mixed together at the right time becomes multiple times more successful than someone who’s an expert in one thing.

Incentives are the most powerful force in the world and can get people to justify or defend almost anything.

Eventually being right is one thing. But can you eventually be right and convince those around you? That’s completely different, and easy to overlook.

I read newspapers and books every day. I cannot recall one damn thing I read in a newspaper from, say, 2011. But I can tell you in detail about a few great books I read in 2011 and how they changed the way I think. I’ll remember them forever. I’ll keep reading newspapers. But if I read more books I’d probably develop better filters and frameworks that would help me make better sense of the news. The point, then, isn’t that you

Samuel Williston was a nineteenth-century paleontologist who first noticed a historic trend in the reduction of body parts. Primitive animals often had many duplicate body parts, then evolution reduced the number but increased their usefulness. “The course of evolution has been to reduce the number of parts and to adapt those which remain more closely with their special uses, either by increase in size or by modifications of their shape and structure,” Williston wrote in 1914.

The problem with simplicity is that the reps don’t hurt, so you don’t feel like you’re getting a mental workout. It can create a preference for laborious learning that students are actually okay with because it feels like a cognitive bench press, with all the assumed benefits.