Same as Ever: Timeless Lessons on Risk, Opportunity and Living a Good Life

by Morgan Housel

Viewing events in isolation, without an appreciation of their long roots, helps explain everything from why forecasting is hard to why politics is nasty.

The other thing to keep in mind is to have a wider imagination. No matter what the world looks like today, and what seems obvious today, everything can change tomorrow because of some tiny accident no one’s thinking about. 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.

As financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.” That’s the real definition of risk—what’s left over after you’ve prepared for the risks you can imagine. Risk is what you don’t see.

Nassim Taleb says, “Invest in preparedness, not in prediction.”

Montesquieu wrote Two hundred and seventy-five 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.

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.

If you look at the 1950s and ask, “What was different that made it feel so great?” this is at least part of your answer. The gap between you and most of the people around you wasn’t that large.

Entrepreneur Andrew Wilkinson echoed the same when he said, “Most successful people are just a walking anxiety disorder harnessed for productivity.”

Even in a single year the improvement is incredible: more than half a million fewer Americans now die of heart disease each year than if we hadn’t made any improvements since the 1950s. That’s a full football stadium saved every month. How is this not a bigger story? Why are we not shouting in the streets about how incredible this is and building statues for cardiologists? I’ll tell you why: because the improvement happened too slowly for anyone to notice. The average annual decline in heart disease mortality between 1950 and 2014 was 1.5 percent per year.

How would you react if you saw a news headline that read, “Heart Disease Deaths Decline 1.5% Last Year.” You’d yawn and move on. So that’s what we’ve done. We do it all the time. The most important things come from compounding. But compounding takes awhile, so it’s easy to ignore.