The Art of Spending Money - by Morgan Housel
ISBN: 9780593716625Date read: 2025-12-05
How strongly I recommend it: 7/10
(See my list of 430+ books, for more.)
Go to the Amazon page for details and reviews.
Philosophical thoughts on what to do with your money, which then relates to happiness, independence, envy, scarcity, and more. Putting money into savings is like buying independence. Imagine a 5-star chef cooks the most amazing meals for you 3× a day, every day. You’d lose the joy of a great meal since it’s no longer scarce. Implications for life?
my notes
Those happiest with money tend to be those who have found a way to stop thinking about it.
All behavior makes sense with enough information.
What have you experienced that I haven’t that makes you believe what you do?
And would I believe the same if I experienced what you have?
Everyone driving slower than you is an idiot, and everyone driving faster than you is a maniac.
If flying first-class to a five-star resort and building sandcastles on the beach with my kids is a 10, playing LEGOs with my kids on the living room floor of a small apartment was still a solid 8 or 9.
People will admire you more if they aren’t jealous of you.
Happiness is when you stop asking what else you need to be happy.
Not needing wealth is more valuable than wealth itself.
If you don’t have those things, then they can mean a great deal to you.
When you do have them, they mean nothing to you.
So much of a good life is about what didn’t happen.
The most valuable financial asset is not needing to impress anyone.
A good life is everything you need and some of what you want.
If you have everything you want, you appreciate none of what you have.
When you live a simple and modest life, your occasional experience with nice things can generate more joy than if you had those things all the time.
A simple life can be the most potent way to enjoy luxury items.
It’s the power of contrast.
Imagine if you had a 5-star chef on staff, cooking you 3 amazing meals a day.
You’d lose the joy of eating an exceptional meal at a nice restaurant.
Taking too little risk is like smoking cigarettes, taking too much risk is like doing heroin.
Both will harm you, the only difference is how quickly.
If you knew you’d live to be 102, you wouldn’t feel guilty sleeping in, taking a sabbatical.
You’d be more willing to learn a new skill.
You’d take better care of your joints, and long-term investing would be more exciting.
Instead of “Live for today” or “Save for the future”, try “Minimize future regret.”
You will regret different things as you age.
Experience things for which you will later experience nostalgia.
Formula for a nice life: independence plus purpose.
If I move $500 into my savings account, I purchased $500 of independence.
No different than if I had purchased a $500 item.
The money is “spent” in either scenario.
Spend to have control of my calendar.
Spend on autonomy.
Independence has the highest ROI.
Doesn’t matter what you have, but what you are afraid of losing.
The more you have to lose, the more fragile you are.
What do you do when your real life exceeds your dreams?
Keep it to yourself.
For every substance, small doses stimulate, moderate doses inhibit, large doses kill.
A little bit of sun exposure is healthy, even necessary.
A moderate amount can cause sunburn.
Way too much can cause lethal cancer.
Money works in the same way.
There’s an “ideal” net worth for everyone, when money not only stops bringing pleasure but becomes a social liability.
A family that was worth $8 billion:
If you googled their name, nothing came up.
No Forbes list, no gala photos, no profiles, no Wikipedia pages… nothing.
They lived the most amazing life you could imagine, and they had virtually no social debt.
They had total freedom, privacy, and independence.
They chose their friends carefully and gave money away anonymously.
Their lack of social debt may have been their most valuable asset.
Be rich and anonymous.
A belief is not dangerous until it turns absolute.
Mental liquidity: quickly abandon previous beliefs and strategies.
Spend extravagantly on the things you love, while you mercilessly cut the things you don’t.
Try a million different things.
Reject what doesn’t bring you joy.
The more susceptible you are to advertising, the less satisfied you are with your own life.
You’re desperate for someone to tell you what you should like because you haven’t yet figured it out for yourself.
Pick your lifestyle carefully, as a parent, since it will set your children’s lifestyle expectations.
Generational growth - the feeling that you have matched or exceeded the life built by your parents - is an important part of most people’s well-being.
Fail without failing so hard you can’t recover.
There’s no way to learn the value of money without feeling the power of its scarcity.
Learning that you can’t have everything you want is the only way to understand the difference between a need and a desire.
Be frugal without it hurting.
The opposite of a good idea can also be a good idea.
Man notices his coworker drinking a latte.
Asks, “How often do you drink lattes?”
“Every day,” says the coworker.
“Wow! Every day for thirty years of your professional career! That’s so much money! A latte a day means you’re spending about $1,900 a year. If you invested that money instead at an eight percent return, you’d have $250,000. That’s enough to buy a Ferrari.”
Coworker looks puzzled, asks, “Do you buy lattes?”
“No.”
“So where’s your Ferrari?”