Same as Ever: A Guide to What Never Changes

by Morgan Housel

Author Tim Urban once wrote, “If you went back in time before your birth you’d be terrified to do anything, because you’d know that even the smallest nudges to the present can have major impacts on the future.”

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.

Events, like money, compound. And the central feature of compounding is that it’s never intuitive how big something can grow from a small beginning.

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.

John D. Rockefeller never had penicillin, sunscreen, or Advil. But you can’t say a low-income American with Advil and sunscreen today should feel better off than Rockefeller, because that’s not how people’s heads work. 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.

Median family income adjusted for inflation was $29,000 in 1955. In 1965 it was $42,000. In 2021 it was $70,784. Life described the 1950s as prosperous in a way that would have seemed unbelievable to someone living in the 1920s. The same is true today—a 1950s family would have found it unfathomable that their grandchildren would earn more than twice as much as they did. And higher income wasn’t due to working more hours, or entirely due to women joining the workforce in greater numbers. Median hourly wages adjusted for inflation are nearly 50 percent higher today than in 1955. Some of today’s economic worries would have puzzled a 1950s family. The homeownership rate was 12 percentage points lower in 1950 than it is today. An average home was a third smaller than today’s, despite having more occupants. Food consumed 29 percent of an average household’s budget in 1950 versus 13 percent today. Workplace deaths were three times higher than today. That’s the economic era we long for? Yes. And it’s important to understand why. —

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.

People love the visionary genius side of Musk, but want it to come without the side that operates in his distorted I-don’t-care-about-your-customs version of reality. But I don’t think those two things can be separated. They’re the risk-reward trade-offs of the same personality trait.

The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt. —BERTRAND RUSSELL

What’s different now is the size of the global economy, which increases the sample size of potential crazy things that might happen. When eight billion people interact, the odds of a fraudster, a genius, a terrorist, an idiot, a savant, a jerk, or a visionary moving the needle in a significant way on any given day is nearly guaranteed.

There is too much information in the world for everyone to calmly sift through the data, looking for the most rational, most correct answer. People are busy and emotional, and a good story is always more powerful and persuasive than ice-cold statistics.

If you have the right answer, you may or may not get ahead. If you have the wrong answer but you’re a good storyteller, you’ll probably get ahead (for a while). If you have the right answer and you’re a good storyteller, you’ll almost certainly get ahead. That’s always been true, always will be true, and it shows up in so many areas of history.

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.”

Minsky’s seminal theory was called the financial instability hypothesis. The idea isn’t heavy on math and formulas. It describes a psychological process that basically goes like this: • When an economy is stable, people get optimistic. • When people get optimistic, they go into debt. • When they go into debt, the economy becomes unstable. Minsky’s big idea was that stability is destabilizing. A lack of recessions actually plants the seeds of the next recession, which is why we can never get rid of them.

Nassim Taleb says he’s a libertarian at the federal level, a Republican at the state level, a Democrat at the local level, and a socialist at the family level. People handle risk and responsibility in totally different ways when a group scales from 4 people to 100 to 100,000 to 100 million.

A lot of thought jobs basically never stop, and without structuring time to think and be curious, you wind up less efficient during the hours that are devoted to sitting at your desk cranking out work.

What hustle culture gets wrong

without the effort. But in the real world, those rarely exist. Charlie Munger once noted: “The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end.”

Jeff Bezos once talked about the realities of loving your job: If you can get your work life to where you enjoy half of it, that is amazing. Very few people ever achieve that. Because the truth is, everything comes with overhead. That’s reality. Everything comes with pieces that you don’t like. You can be a Supreme Court justice and there’s still going to be pieces of your job you don’t like. You can be a university professor and you still have to go to committee meetings. Every job comes with pieces you don’t like. And we need to say: That’s part of it.

Most people know it’s the right strategy in investing, careers, relationships—anything that compounds. But saying “I’m in it for the long run” is a bit like standing at the base of Mount Everest, pointing to the top, and saying, “That’s where I’m heading.” Well, that’s nice. Now comes the test. Long term is harder than most people imagine, which is why it’s more lucrative than many people assume.

Who has the right answers but I ignore because they’re not articulate? Which of my current views would I disagree with if I were born in a different country or generation? What do I desperately want to be true so much that I think it’s true when it’s clearly not? What is a problem that I think applies only to other countries/industries/careers that will eventually hit me? What do I think is true but is actually just good marketing? What haven’t I experienced firsthand that leaves me naive about how something works? What looks unsustainable but is actually a new trend we haven’t accepted yet? Who do I think is smart but is actually full of it? Am I prepared to handle risks I can’t even envision? Which of my current views would change if my incentives were different? What are we ignoring today that will seem shockingly obvious in the future? What events very nearly happened that would have fundamentally changed the world I know if they had occurred? How much have things outside my control contributed to things I take credit for? How do I know if I’m being patient (a skill) or stubborn (a flaw)? Who do I look up to that is secretly miserable? What hassle am I trying to eliminate that’s actually an unavoidable cost of success? What crazy genius that I aspire to emulate is actually just crazy? What strong belief do I hold that’s most likely to change? What’s always been true? What’s the same as ever?