Transcript
Table of Contents
[00:00:50] Collecting Good Stories
[00:04:12] Storytelling Beats Facts
[00:05:16] How to Hook Readers
[00:08:39] How Morgan Uses ChatGPT
[00:15:53] Teaching vs Preaching in Writing
[00:18:01] The #1 Worst Writing Advice
[00:25:11] Wide Funnel, Tight Filter Framework
[00:26:42] How to Find Your Writing Style
[00:31:45] Why Write Books in an Online World
[00:36:20] How Morgan Wrote ‘The Art of Spending Money
[00:47:16] Morgan’s Admiration for Beautiful Writing
[00:53:28] How to Start a Chapter
[00:57:18] Becoming More Observant
[01:01:01] You Don’t Need New Ideas
[01:08:16] How Morgan Deals With Rejection
David Perell:
Today, Morgan Housel Housel is one of the top nonfiction writers in the world. He is most famous for a book called The Psychology of Money, which has now sold more than 8 million copies.
But before he wrote the book, he wrote more than 4,000 blog posts for publications like The Wall Street Journal, The Motley Fool, and that’s how he honed his craft. Now, this is my second time having Morgan Housel on the show. The first time I just wanted to talk about Morgan Housel, how do you go about your work?
But this time I said, tell me about stories. How do you find stories? How do you tell stories? How do you think about the rhythm of stories? That’s why you’ve been able to sell millions of books in the world of psychology, investing, business, because of your ability to tell a really good story. So tell me about that. What do you feel like you’re looking for in a good story?
Morgan Housel:
You want to understand it instantly. And I always say there are no points awarded for difficulty in writing. I know a lot of people watching will disagree with this, but I’ve often felt if you’re reading, particularly for older texts, just because the language was different back then, if you have to reread the paragraph four times because it’s deep writing, it’s not bedtime writing. That’s not on you; that’s the author’s fault. It’s supposed to be easy to read, and you can be deep and insightful and communicate well.
Now, a lot of the philosophers and whatnot that have been translated over the years, they were not the best writers. They’re very deep thinkers. You can learn a tremendous amount from them, but you really have to crank the gears in your brain to get it.
I think there’s other people who can tell a story that can be equally profound that you can just get. One of the great examples of this is the author Eric Larson, who writes non-fiction stuff.
David Perell:
Yeah.
Morgan Housel:
What he does better than anyone is that in his nonfiction books, sometimes there can be 200 chapters in the book. Each chapter is a page and a half. The reason he can do that is because he can tell in a page and a half what would take other historians 17 pages.
David Perell:
Right.
Morgan Housel:
Or 46 pages. He can just get to the point, and he’s not taking out any of the meat. He’s just getting to the point, and I think I retain, and most people retain so much more to just get to the point. Get to the fricking point.
That has always been the case, but it’s way more today. Because if you and I were reading a book 50 years ago, that’s probably all we had. We had a book in front of us, nothing else to do. Now you got a phone in your pocket, a screen over here, an iPad over there. If the book’s boring you, you’re out. You’re done.
Open up your phone, boom. I know a lot of people. I started doing this. I have to put my phone in a different room when I read because I’ll pull it out and check it.
But also to empathize with the person reading, you usually want to pull out your phone when the author that you are reading is slowing, saying, doing a good job. So yes, it is my impatience, but my impatience is being triggered by me being like, what’s the point? What’s the point?
Mark Twain wrote about this. He used to read aloud to his wife and kids, and he would watch their facial expressions, and when they leaned forward, he’d be like, oh, I’m onto something. And when he could see them getting bored, he’d be like, gotta cut it, gotta cut it, gotta cut it. And that’s why some of that writing is so good. It’s very heavily curated to get to the point.
David Perell:
I feel like you collect stories. I feel like if I were to think about what do you do all day, one thing has to be that you collect stories, you watch things, you read things, you listen to podcasts. And then there’s this method that you’ve developed of collecting them, and then they end up in the books.
Morgan Housel:
Yeah, and there’s a lot that don’t end up in the books. I’ve written three or four blog posts titled some variation of several short stories, little short stories that I want, and those are stories that I’ve collected over the years. I couldn’t figure out anything to do with that. I eventually just dumped into that.
I think a short story like that can make a good anecdote into a book chapter. But a great story can be three lines, and you don’t have to do anything. It’s just a good story in itself, and it’s always the case that the best story wins. We’ve talked about that before, but it’s always too that the person who says the most in the fewest words wins.
There are so many three line stories that will stick with you forever that it doesn’t need to be a long elaborate thing.
David Perell:
As I was reading the new book, there must be 140 stories in 210 pages in that book.
Morgan Housel:
That sounds about right. Most nonfiction books, particularly a book about money or business, if you’re only writing about money, even finance professionals, you’ll put them to sleep; you’ll bore them, even if you are a finance nerd, let alone a layperson. So if you’re not telling stories, you’re out; you’re gone.
I’ve always wanted to be a storyteller as an author for two reasons: as a survival technique. If I wrote about the stock market by saying, “Here’s what the Dow Jones did this morning,” you’re gone; you’re dead. You’re not going to survive one day as an author. Also, I think it gets you closer to the truth because when you tell a good story, the reader can contextualize their own life and empathize with it. You read a story about something that happened maybe 1,000 years ago, maybe even if it’s nonfiction or science fiction. But if it’s a good story, you’re like, “I can imagine myself in those shoes” in a way that you cannot come close to if you’re just giving a data dump. So for nonfiction business books, it’s absolutely essential.
David Perell:
I was thinking a lot about hooks and stories. You could say, “Hey, there’s a lot of really wealthy families where people end up going broke.” And you’re like, “Yeah, yeah, David Perell, come on; shut up. I’m not interested in that.” Or you could say, “Hey, the Vanderbilts had the equivalent of $300 billion, and within 60 years, they basically had no money.”
Morgan Housel:
Almost all of it was gone.
David Perell:
Which one are you going to read? Are you going to read the first one or the second one? That second hook is so much more; it sucks you into the page.
Morgan Housel:
Yeah, and I’d be willing to bet—maybe I’m wrong about this; I’m making this up on the spot—but I bet TMZ has more page views than a lot of the big news outlets because TMZ is like the celebrity gossip. I would propose that it’s not because people like the gossip, even though that’s true, of course, but because a website like TMZ is very, very good at hooking you in, at just being like, “Here’s what it is.” Now, a good noble news source will not do that. They have the morals and the ethics to want to tell the proper story, not the story that’s going to sell the most.
Some people are extremely good at being like, “What’s going to get your attention?” I think there’s a moral way to do that. There is obviously an immoral way to do that, and a lot of people on social media have found that immoral way of just being so hyperbolic that you’ve detached yourself from the truth. If you can tell an interesting story in a way that is honest and within your own morals, you’re not trying to fool anybody, and you’re not trying to be so hyperbolic that it’s false, but telling a good story that will hook you in and keep you reading is key.
David Perell:
That Vanderbilt story was nuts.
Morgan Housel:
It’s one of the craziest stories of all the robber baron families of the late 1800s. The Rockefellers did a pretty good job, and the Carnegies did a pretty good job at taking a step back and saying, “We have this unbelievable astronomical fortune. What do we do? How can we use it for good, for our own good and for the good of society?” The Rockefellers and the Carnegies did a pretty good job. The Vanderbilts did by far the worst.
The money told them who they could be, what their personality could be, where they could live, whom they could marry. It completely controlled everything. So they had financial independence but no other form of independence. Money completely controlled their personality, and they’re all kind of miserable for it.
This is now a well-known little nugget, but the first Vanderbilt heir who didn’t get any money when all the trust funds were exhausted was Anderson Cooper. That’s the craziest thing, right? His mother was Gloria Vanderbilt, who was kind of the last of the big heirs. Cooper is not only the most successful Vanderbilt heir in 150 years, but I would venture to say he’s probably the happiest, having read about many of his ancestors.
His grandfather, Reggie Vanderbilt, was one of the most miserable, died a drunk, gambled his money away, and died a horrific death drunk all the time. If you read Reggie Vanderbilt’s biography, it’s horrific. He was the last ultra-wealthy Vanderbilt. You fast forward to Anderson Cooper’s life, who I’m sure has not been perfect, but it’s almost like he was mercilessly let go of having money control his personality. So back to your point, if you can tell a story about that versus saying something bland like “having a lot of money doesn’t guarantee happiness,” you’ve hooked people in, and you’ve done it in an honest way.
David Perell:
So how do you use ChatGPT? Do you use it at all? Do you use it in writing? Do you use it when you’re reading?
Morgan Housel:
To think through things, like virtually everyone else out there, it’s become my— I’d say 18 months ago, I used it once a week, and now I feel like I use it twice an hour or more. It just exploded out of the middle of nowhere. That’s not a unique story, of course.
I’m still, and I will remain, an old-school writer. Every word is going to be, every letter will be typed by me. Of course, it obviously feels like cheating if you’re using it, even if you’re taking the text that it wrote and trying to put it in your own voice. I think it strips away the true meaning of writing, which is the process of writing is what gets the author thinking.
Like most people, when they write a book, they didn’t have all that knowledge in their head when they wrote it. They just started out with one brave sentence, and then that taught them something. Then they wrote a paragraph, and they said, oh, that reminds me of this. If you’re using any kind of LLM to do any of the, even the broad structure for you, you’re not actually thinking. So, you stripped out everything that was good about writing. So, I’m always going to remain old school there.
I’ve noticed that there’s sometimes—I’ve done this a couple of times as an experiment, and I’ll actually do this in practice—upload a manuscript or a chapter and say, give me some feedback on this. There’s sometimes where it can actually be decent at like high-level stuff about being like, oh, your intro was a little rambling.
One of the most interesting things is what I actually want it for, like hunt for typos and grammar and punctuation. At least in my experience, it’s actually been very poor at that. It’s actually been not that great. I’m sure it’ll improve over time.
Everyone’s going to be different in this, but as a research tool, as a Google on steroids, unbelievable, incredible. As an actually writing aid, both because I don’t want it to be and because I don’t think it is that great, I haven’t found much use for it.
David Perell:
When you say Google on steroids, what do you mean?
Morgan Housel:
Well, rather than giving you a data dump of links where you have to go do it for yourself, it’s just giving you the answer. Now, I can’t count how many times everyone has experienced with this—the answer is wrong. It’s hallucinating something; it’s misreading the sources that it’s going through. So, you can never use it as a crutch, but just speeding up.
If you, in the old days, by which I mean like 18 months ago, if you were researching a topic, Google would point you to a PDF that was 387 pages, and you could spend the afternoon sifting through it, looking what you’re looking for. Now you can get that just instantly. It just says, here’s what you’re looking for.
The speed at which research has increased in the last 18 months is just profound. I’ve experienced that as someone. Some of the best anecdotes and stories that I found in my book happened because I spent, in some cases, weeks researching, looking for these things.
I used to live in Washington, D.C., and spent quite a bit of time in the Library of Congress reading old newspapers and trying to find little anecdotes. Now, all that can be done instantly. It’s just boom, here it is for you.
I do think there’s something to be said that when you take that process out, it’s going to stifle your creativity as well. If you just have a machine that can feed you ideas, you need— I think it’s integral that those ideas come to you after hard work. Maybe this is a bad analogy, but if we just had a pill that could just give you muscle, you just swallow a pill, and now we’re all ripped. A Zempic for being like Schwarzenegger. It wouldn’t be as meaningful, and I’m sure it wouldn’t work as well if you actually just went to the gym and did reps. So, I think it’s true for research as well. When you’re doing the reps of research, it’s going to hit you in a different way.
David Perell:
Do you feel the same way as a consumer as you do a producer?
So, a thought experiment here would be, say that there’s an author you really like, and they’re like, hey, I use ChatGPT a lot for this. I use it to help me rewrite my sentences. I use it to do research. I’m probably doing 50, 60 queries a day. Honestly, at this point, it’s hard for me to know what is mine, what is ChatGPT’s.
But then you read the book, and you’re like, okay, this is really good. This is really good stuff. It doesn’t feel like it’s ChatGPT, and you’re like, wow, this actually feels more Bill Bryson or more Robert Caro than what they were getting to before ChatGPT. Are you like, ah, that’s annoying, or are you like, show me what you got?
Morgan Housel:
So much of what I love about nonfiction and fiction books is this feeling when you’re reading it and enjoying it, that you’re like, wow, a fellow human wrote this. I couldn’t write this, but somebody else has this skill to write this and do this research that I don’t. So Robert Caro, turn every page. He has the patience and the fortitude to do that. I don’t.
So when I read it, when I come across an amazing nugget that he’s written, I can intuitively feel the effort that went into it, and I love it. And I think if we strip that away, you take away the allure of a good book.
The allure of a good book, whether it’s fiction or nonfiction, is like, wow, somebody else did something that I can’t, and that makes me feel good as a reader. It’s amazing. And I think if you just strip all that away, I think in the same way, the original Star Wars movies where the special effects were the first time they’d ever done it, but also very manually intensive. They’re building small models of spaceships. I think that gave people more of a sense of wonder.
I remember reading this review. I think it was on Amazon. It was an Amazon review of a Cormac McCarthy book.
David Perell:
Okay.
Morgan Housel:
This was a year ago or so, not that long ago. I just went to a random review, and they said something along the lines of, what I love about reading Cormac McCarthy is almost every sentence I stop and I think to myself, how is it possible that you came up with that sentence in your head?
And I was like, oh, that’s cool. I like that. That’s the allure of a good book. You have this feeling of how is it possible that another author either did that or came up with that sentence? And if we come to a point where ChatGPT wrote this, then you lose that magic, and it’s less amazing.
David Perell:
That’s how I feel when I read David Perell Foster Wallace. A little bit different, like this guy’s brain is bizarre.
Morgan Housel:
Yeah.
David Perell:
And I’m not sure I would want to live in it.
Morgan Housel:
Yeah.
David Perell:
But I’m totally down to spend an hour.
Morgan Housel:
Totally. I get that with fiction a lot too. When you’re reading just an amazing story, an amazing plot line. I’m like, how did you come up with this? How did a fellow human who ostensibly has the same brain that I do, but clearly doesn’t? The brain clearly looks way different than mine. That’s what you love about it.
Same with art. All art is like that. That’s why the famous painters and whatnot. ChatGPT can shook out a picture that is technically better, technically sharper and more detailed, but a human didn’t do it. It’s amazing when a human does it.
So that’s one of my worries about ChatGPT or any of the AI models is that it’ll just strip the wow out of writing.
David Perell:
As you’re writing, there is an element of teaching where you’re basically saying the art of spending money. Here’s what I’ve learned. A lot of people, they’re not so good at spending money. They might even be fine at making it, but sometimes even making money is inversely correlated with how well you spend it. So how do you think about the difference between being teachy and being preachy?
Morgan Housel:
The biggest thing with money, and it’s true for a lot of nonfiction topics, is that I don’t know you, the reader. So who am I to tell you how to live your life? Because I do a lot of things that wouldn’t work for you and vice versa. We’re all so different in this element, so I can’t give you advice because I don’t know you.
People understand that, like with doctors. If a doctor went on TV and said, everybody should take this pill, you’d be like, what? You don’t know the patient. You got to know them first. You can’t do that.
David Perell:
Right.
Morgan Housel:
But with money, I think people don’t view it that way. You’re like, just tell me how to do it. Just tell me what stocks to buy. I don’t know you. It’s different for everybody. And so I don’t want to be preachy from a practical standpoint, because that’s not how this advice works. I can give you broad ideas about how the psychology of dealing with money works, but then you got to figure it out for yourself and contextualize your own life.
That’s one element. The other is nobody likes a lecture. Nobody likes someone, particularly with finance, to basically say, hey, idiot, you’ve done it wrong the whole time, and if you had done it my way, you’d be in a better spot. Nobody wants to read that. It’s too hard to read.
But if you can be like, let me just tell you a little story about psychology and how the weird ways that people think about risk and greed and envy, and you can figure it out for yourself. You can do whatever you want with that information.
There was a time I used to write for the Wall Street Journal 10 years ago or so. And it’s true for most traditional journalism, they want you to finish every article with something along the lines of, and therefore, you should buy this mutual fund. They want very concrete advice at the end.
My point was, you don’t need that. The reader can figure it out for themselves. I don’t know the reader, but they can just take the lesson from this and figure it out in their own lives. I don’t need to give them any advice on it.
So that was always my philosophy. Nobody likes a lecture. Nobody likes to be shamed about their mistakes. But if you give them enough stories about psychology, they’ll figure it out for themselves.
David Perell:
What is the single worst piece of writing advice that you often hear?
Morgan Housel:
I think it’s the very common, know your reader. Because I think the speed at which “know your reader” becomes “pander to your reader,” the ease at which you can conflate those two things is astounding.
I think it’s true that virtually everybody in the world, if they’re writing a diary where they think no one else is going to read this, is a good writer. In that situation, they would write good prose. They would write it well. They get to the point, they tell a good story about what happened today and the problems in their life.
It’s as soon as you think someone else is going to read this that it clicks in your head, “Well, who’s reading this? Because I’m writing for them. What do they want to hear?” And in that situation, the good prose in the diary just falls apart. Then you start getting structured, like, “Oh, well, I need to explain that deeper because they probably don’t understand it,” and whatnot.
I’ll tell you a little thing that is a no-nothing thing, and it’s obviously fine that they do it. The Economist magazine, a great magazine and actually very good prose, very, very well written. They will always say, “Goldman Sachs, a bank,” and they keep going. And I want to be like, how many Economist readers don’t know that it’s a bank? You don’t need to put that there.
If they were writing a diary for themselves, they would never do that. There’s part of me that’s like, “Don’t explain it. Even if your reader doesn’t know this thing, make them look it up. Make them look it up. Don’t just write for yourself.”
If they don’t know it, that’s their problem. They can just figure it out for themselves. Naval has another little twist on this. He’s like, “Don’t quote people. Don’t say, ‘As David Perell Perell said,’ blah blah blah,” even though I do that. He was like, “Just put it into your own words. Just find what they said and just phrase it yourself and move on. Because you get so clunky when you deal with quotes and whatnot and doing it that way.”
David Perell:
Why don’t you do that? You love to quote people.
Morgan Housel:
I don’t like the idea that I’m pretending to be the smartest person on the page. I’m clearly not. I think you actually get more authority as a writer if you defer the wisdom to other people. I think that can be the case, particularly nonfiction, especially young writers early on.
There’s nothing more aggravating than a 22-year-old who thinks they understand how the world works and wants to tell you about it in their blog post. But it would actually be a wonderful thing if a 22-year-old is like, “I did a bunch of research, and these are the favorite gems that I’ve read from other people who have more experience than me.” That’s great. I’ll read that.
I think you have to be careful about. There’s an inherent sense of ego of saying, “I understand this, and I’m the only person worth quoting here.”
David Perell:
You were talking about TMZ having a lot of views. I think People magazine, maybe not still, but at one point, it was the top magazine in the entire world.
Most of your stories fundamentally are about a person. We could just buff it. The Vanderbilts, boom, boom, boom. That seems to be in terms of your flavor of stories. You’re really good at finding a person, and then we can imagine ourselves through that person’s life.
Morgan Housel:
So maybe it comes down to the Joseph Stalin quote, “One death is a tragedy. One million is a statistic.” If you’re telling individual stories, it makes it easier to be like, “That could be me.” If you’re telling a story about groups of people, then it’s almost the opposite. Then it’s them.
David Perell:
It’s apathy.
Morgan Housel:
This is why people in politics and all kinds of endeavors can very easily discriminate against them—them, those guys, that group, those people.
But once it’s an individual, you’re like, “I think it becomes easier to be like, that could be me. I could do that.” Anytime you can allow the reader to realize that they’re actually reading it in the mirror and they’re looking at themselves, I think you have a much higher chance of hooking them in.
David Perell:
I’m so interested in this sort of any given Tuesday afternoon question. You’re done with your writing, but then it’s still early enough. We’re not playing with your kids. You don’t have meetings. You’re kind of in this chill state. You’re sort of just browsing, looking at stuff, observing.
There’s maybe some data that you’re looking at, there’s pieces that you’re reading, books, whatever it is. What are some of the things that you’re doing to not just collect stories but also to observe and make sense of the world?
Morgan Housel:
Well, my wife has said this for years, and she says it half jokingly, but only half jokingly, where she’s like, I don’t think you actually work.
Because what I do all day, forget any given Tuesdays, any given Saturday, Sunday, Monday, Tuesday, Wednesday, it’s all the time. Nothing is structured for me. I know other writers will push back on this and think differently about it, but I can’t structure creativity. I just have to let myself go and trust that it’ll hit me eventually. Good ideas cannot be scheduled.
And so the two biggest, most important ideas for my career were the title The Psychology of Money and the title The Art of Spending Money. I remember when both of those hit me. I remember walking down the streets of New York, where I don’t live, I just happened to be here. I remember walking down the street. This would have been 2017. And it just hit me: The Psychology of Money.
David Perell:
Was that for the article or for the book?
Morgan Housel:
The article, that stuff. I remember The Psychology of Money. I’ve talked about this before. I shamelessly stole it from Charlie Munger’s speech, The Psychology of Human Misjudgment. I remember thinking that format, The Psychology of…
First, I was going to call it The Psychology of Investing, but I realized then it could actually be bigger and broader than that. But I remember being like, that’s a great form: The Psychology of Money. I didn’t sit down at my desk and say, I need to come up with a title. I was just daydreaming, walking down the street, and that was like, boom, okay, I’m turning this into. I’m gonna run with this.
The Art of Spending Money, I remember I was on the treadmill, just zoning out, and I was like, oh, The Art of Spending Money. That would make a good piece. I should run with that. Whenever I come up with or thought about stories and hooks to tie in, it’s never when I’ve been trying to do it. It’s in the shower, it’s walking my dog, it’s waking up at 2:00 AM and wrestling around bed. It’s always in the unstructured moments.
And so I go out of my way. I like structure unstructuredness. If I have a list of things to do, I’m like, well, I’m not going to do anything productive today. Then I’m going to have my most productive day when I’m in my sweatpants sitting on the couch hanging out, and my wife says, what are you doing? I can’t convince her of this, even after 20 years. This is everything. I’m doing the most productive thing I can right now.
I think most good writers, there are many exceptions to this, this is not black and white. It’s rare that you’re going to find, I’d say rarer that you will find a really great author who works for a publication and has to go to an office and sit at his or her cubicle and dress up in corporate attire and go to the Monday mornings all hands, and then go back to their cubicle and their editor says, be creative. That never happens. We could probably think of a couple.
David Perell:
Yeah.
Morgan Housel:
But most great writers, I think, are just kind of wanderers, and they have to be independent, unstructured wanderers because that’s when you actually get good thinking done.
David Perell:
Tell me about the idea of setting looking wide, but setting tight filters.
Morgan Housel:
I think I got this idea from Patrick O’Shaughnessy, where he was like, for books you want a wide funnel and a tight filter. When he said that, I was like, oh, I didn’t put it into words. But I think that’s always how I’ve read books. I will start reading any book that looks 1% interesting. It doesn’t have to be like, oh, that book looks amazing. It’d be like, oh, that’s kind of a curious topic, let’s give it a try.
And you can get a free Kindle sample for any book. Kindle will give you 10% of any book for free, so you have no excuse not to do this and start reading it. But then be merciless about if it’s not working for you and the writing style doesn’t fit for you, then just slam it shut and go to the next one. I finish a very small percentage of the books that I start, single digit percentage points in the books that I start.
I think most people who have who say they’re not a good reader, or they don’t like to read, it’s because they force themselves to read bad books. When I say bad books, I usually mean books that are not right for you. They might be right for somebody else. Any author who can get to the end of the page and publish deserves praise. But a lot of books are not right for me and not right for you. If you force yourself to finish, you think you have a moral obligation to finish it, or you think it’s your character flaw that you’re bored in the middle of the book, I think that’s a problem. So I just slam it shut and move on to the next one: wide funnel, tight filter.
David Perell:
Well, one of the themes of The Art of Spending Money is that there is a style and a method that works best for you. And it’s the same thing with writing. There is now such a Morgan Housel Housel style. What’s funny is that now you have figured that out, and part of what you figured out is, I’m just going to chill on the couch. But for years, you’re writing four, five, six pieces a day?
Morgan Housel:
It was a lot.
David Perell:
And how much do you feel that your style emerged from reps versus something else?
Morgan Housel:
That’s a good question. I think during my rep years, when I was writing multiple pieces per day, the thing that was most helpful for me, and it was torturous at the time, was this was during the day when blogs had comment sections.
People, of course, are just absolutely vicious in the comment section, and I had the worst. My wife would always come home from work, take a step in the door, look at my face, and she’d be like, “Bad comment today.” You could just tell.
But what it did—I didn’t like it at the time—but what it did is, in any endeavor, what you need is feedback. The blog comment section, as terrible as it was, was feedback. And it’s true that if you write a bad piece, people will let you know. Less often, but it does happen. If you write a good piece, they’ll let you know, like, “Oh, this is great, I really liked it.” I wrote 4,000 blog posts.
When you write that much, there was so much feedback of like, “This worked, this didn’t. This worked, this didn’t.” It was just a constant honing of that and also wanting to be like, “Yeah, but I got to figure out my own voice, too. I can’t just be taking directions from the barking crowd and doing what they say. I have to figure out my own voice.” I thought this was really good, but nobody liked it, and I thought this was kind of crazy, but a lot of people liked it. If you do that 4,000 times, it pushes you in that direction.
Part of it was, if I look back with a little sense of shame, I had a thin skin. When people said bad things, I was like, “Oh, it makes me feel so bad.” Other writers are like, “I don’t care, I don’t care what other people think.” But the feedback pushed me towards something that I’m proud of now.
David Perell:
And how do you reconcile that with the idea of selfish writing?
Morgan Housel:
I think selfish writing came later. That was a later insight. I’ve been a writer for 20 years, so there have been several different eras. Early on, the era of read every comment and take that feedback, that was an important era. There was also another important era when I realized I can’t please everybody. No matter what I do, there’s always going to be people who say, “I didn’t like this, you’re wrong about that,” no matter what it is.
I might as well try to appease. If I can’t appease everybody, I might as well try to appease one person or one group of audience, and I figured that was me. I just want to appease myself, and I thought I did my best work when I realized I wasn’t even thinking about the audience. I just like this.
There’s only been a couple of times in my career where I’ve worked with an editor. It’s actually been very rare. I bet 1% of what I’ve written has been edited by somebody else. I would go through moments, even with editors who I really liked and were more skillful, where an editor would say, “I don’t like this sentence,” and I would be like, “But I do. It’s subjective, and I think it’s cool. I think it’s great. I’m sorry you don’t like it, but this is all subjective. This is not math.”
I really had to just lean on the idea that writing is subjective. There is no right answer. What’s great to one person will be garbage to another, so I might as well just do what I want. I think a lot of other artists think that way. Painters don’t have editors. Most musicians don’t have editors, or maybe to some degree, and sculptors usually don’t have editors because they know it’s subjective. You just have to do it for yourself.
When the great painters or the great musicians were doing their work, I guarantee you they were not asking, “Will the audience like this?” They just like it. Every artist does their best work when they’re doing it for themselves.
David Perell:
I was talking to a big YouTuber, and he was like, “Yeah, I don’t look at the data.” This very big prominent YouTuber is like, “Yeah, I don’t look at the data anymore.”
I was like, “Anymore? What do you mean?”
He’s like, “Oh, I spent 10 years, and all I did was look at YouTube data. I was in it, in it, in it, in it. And now I can just look at a video, and I can tell you instantly based off the packaging what’s the click-through rate going to be? What’s the retention timeline going to be? I’m post-data.”
Morgan Housel:
I feel like I’ve gained a little bit of that with books. I would bet that I can read three pages of a book and tell you how many copies it sold. I mean not actually, but I bet I can be directionally pretty good with that.
I remember when I read Atomic Habits by James Clear, I remember reading three pages and being like, “That’s it. You can’t stop reading that book.” It gets pretty clear. There’s a lot of deep non-fiction history that you read one page, and you’re like, “I can tell you this is not going to be a book that people near the end are going to call their friend and say, you have to read this.” There’s a storytelling cachet that you can pick up.
David Perell:
What do you feel is the value of writing books as opposed to articles? Obviously you’ve written so many of those.
Also, as opposed to this new world of ChatGPT and AI that we’re in now, what makes you be like, “Okay, I’m going to stake my career on this craft of writing books?”
Morgan Housel:
I always felt like social media was spring training. Writing blogs was like a regular season game, and books are the Super Bowl. The stakes get so much higher.
For an athlete, if you mess up in spring training, it doesn’t matter. If every writer wrote a bad tweet, who cares? If you lose a regular season game, not great, but the world goes on. If you fumble the Super Bowl, that’s a scar.
David Perell:
Bill Buckner, have you ever seen that clip? It’s like the Red Sox first baseman. It’s the World Series, and he gets this easy ground ball, and it goes through his legs, and it’s a disaster.
Morgan Housel:
I went to the Super Bowl in 2014: Broncos versus Seattle. There’s a picture of Peyton Manning. I think it was the first play where the ball snaps and hits him in the helmet. There’s a picture of him being like, “Ugh!” That’s another thing. In a regular season game, people would look past that. In the Super Bowl, you can’t be doing this.
The analogy is books are the Super Bowl for the author. The stakes are so much higher, and if you fumble it, it’s going to be a mark on your career. That’s how I’ve always viewed it.
Most of my career, I thought blogging was where I would end. I was just going to end as a blogger. I didn’t think I’d ever write books. That was true when I was 15 years into my career; I didn’t think I’d ever write a book.
I always thought blogging was the end and that was the most important thing. But I also knew that if I wrote a bad blog post, and I’ve written many of them, there’s always next week to come back. Whereas a book, if you write a great book, that can stick with you for life. But if you write a bad book, it won’t stick with you for life, but you’ll never be remembered for it, of course.
David Perell:
Right, it’s definitely something that I’ve...
Morgan Housel:
Come...
David Perell:
To see the light on over the years.
At the beginning, I thought books were going to go out of style. Everyone can write online now, and that’s free. Why is everyone going to have a book?
There’s just a cultural significance to a book, in the same way that there’s a cultural significance to a Tarantino movie that doesn’t apply to a YouTube video.
I’ve now been friends with enough people who have written successful books, and it changes their lives. You could write something like, “How All This Happened,” a piece they wrote in 2018 or 2019, and it’ll go viral, but you’re not going to move houses because of that piece.
Morgan Housel:
Totally. From the reader’s perspective, if you write a dull blog post, people will give you three seconds, and they’re done. If you don’t catch their attention in three seconds, I think the reader will give you a little bit more patience in a book.
David Perell:
Yeah.
Morgan Housel:
If you paid $25 for it and you’re holding something physical, you will have a higher chance of the reader sticking with it.
David Perell:
It’s about as long as the Kindle sample rate.
Morgan Housel:
Now it would be shorter than it was, but you have more flexibility as an author to stretch your legs and tell a deeper story because you will have a marginally higher patience tolerance.
David Perell:
I just had Mitch Albom on the show, who wrote Tuesdays with Morrie. It’s so funny that the two of you are so similar. You guys would be great friends.
That’s exactly what he said. He was a columnist at one of the big Detroit newspapers. Being a columnist, he just got to the point. He was writing his first book and someone said to him, “They’ll give you eight to ten pages, no problem.”
Morgan Housel:
In a tweet, they’ll give you three words. In an article, they’ll give you a line or two. In a book, they might give you eight pages.
You just have a higher patient threshold, which allows you to tell a deeper story. Whenever I write, even though it is selfish writing and I’m writing for myself, I still have a little bird in my head being like, “Gotta get to the point. You gotta go. You’re stumbling here. Wrap this up.”
That little bird is still there in my head when I’m writing a book. But I also know this is a book, and I think I can… I’m not rambling; this is a good story, but I think I can go a little bit deeper than I would have in a blog.
David Perell:
With The Psychology of Money, you had written for 14 years before you published that book, and a lot of that book is stuff you had written about that you then repurposed and repackaged. Now, when you publish a book, a much higher percentage is things that you haven’t written.
Morgan Housel:
Yeah.
David Perell:
How has that changed your process?
Morgan Housel:
I think it’s unavoidable. That’s a problem. It was great when I could write 4,000 blog posts and then go back and see what were the best ideas that I could put in. That was great.
I do think there’s something to be said that you get better. I don’t want to say you get good, but you get better at knowing what’s going to work and what’s not. Again, I would not say I’m good at that, but I’m better than I was 10 years ago.
Ten or 15 years ago, I would write something that I really thought was good, and nobody else thought it was good. I think I have a lower risk of doing that today. It’s not zero, but it’s lower.
David Perell:
What do you think you learned?
Morgan Housel:
The power of storytelling, how to tell a good story, what’s going to capture. Also, I think this is where I came into my selfish writing era of I’m not trying to impress other people anymore. I’m not trying to write for other people. I’m definitely not going to try to pander to other people.
Do I like this story? Does that joke make me laugh? Okay, then it’s good enough. Let’s just go with it.
David Perell:
The other thing that you’ve definitely developed, and I’ve noticed this as your writing has gotten more popular, and maybe it’s just part of it, is people share what they read in your books, but you’ve become the king of the maxim.
Morgan Housel:
I think social media turned a lot of people, in a very good, healthy way, into maxim writers because it was, “Hey, you’ve got 240 characters, whatever it was, to make your point.” It was the exact opposite of how most people learned to write historically, which was their fifth grade teacher saying, “Five pages minimum.” You had to fill five pages. Social media was like 240 characters maximum.
It forced people to be like, “What’s your point? Give it to me very brief.” You could say that turned people impatient, and that turned writers into just kind of fluffy little tidbits versus long. But I think in general it was a good thing. One of the terrible ways that we’ve taught writing is telling the page minimum. It’s done with good intentions to keep kids from being lazy, but it taught them to just expand, expand, expand.
David Perell:
Really what we should do is it’s fine to get them to expand because what you’re protecting against is the lazy people who are just like, you know, four words and whatnot. But really what writing education comes to life is compression.
When I was teaching writing, we used to do an exercise where we would give people this long page, horribly written about the Concorde. We would basically say, “This is a poorly written paragraph about the history of the Concorde, and here’s a bunch of data points. Now what you need to do is you need to make the same point. First of all, figure out what is the point that’s trying to be made, and then you have 200 words and then you can pull from these data points.” What you’re teaching is just compression, compression, compression.
Morgan Housel:
What’s true, too, is that social media has taught people how to be short. A lot of times when it’s short, there’s no insight. They’ve stripped away the meat, like more than the fluff, they took away the meat. So concise doesn’t necessarily mean short.
The best example of this I come across is Doris Kern Goodwin’s book No Ordinary Time. It’s a biography of FDR during World War II. The book is like 800 pages, maybe it’s 750. It’s a gigantic brick of a book, and not a single word can be stripped from that book. To me, every word needs to be there. There’s not a single wasted sentence anywhere. There’s not a single paragraph of fluff anywhere.
So concise doesn’t mean short. You can be a great length. You can write an 800 page book, but it’s just lack of fluff. The opposite of that is there are plenty of 500 word essays where 495 of the words didn’t need to be there. You could have summed it up with a little blurb, a little quote.
David Perell:
When you think of short, you know, you might think, “Oh, short is like 60 seconds, two minutes.” Seinfeld has a great bit where he says, “You can go to a comedy stand up and someone can go for an hour. You’re just nodding your head, you’re looking at your partner, you’re like, man, this is so good. This is so good. But then if you go to 90 minutes and they’re a little bit bored, by the end, they’ll walk out, they’ll say, “Eh, it was all right.”
Morgan Housel:
Right.
David Perell:
As a creator, it’s less about trying to make it as short as possible, but much more about having a deep, intuitive sense of awareness for when you’ve lost the audience, both in the micro of whatever story that you’re telling, but also in the macro in terms of when have I lost their attention?
Morgan Housel:
I do a lot of speaking at conferences, and historically most event planners will say, “Can you do a 60 minute keynote?” That’s always been the standard, is the 60 minute keynote.
David Perell:
Wow.
Morgan Housel:
It took me a while to realize and to start pushing back on event planners and be like, it’s too long. It’s too long. People will like this much more if it’s 30 minutes.
I’m not doing that to be lazy or get out of work; it’s just better if it’s 30 minutes. Sometimes a conversation like this can be long because we’re going back and forth. But to listen to one person talk for 60 minutes, even if it’s good, can be exhausting. So sometimes to your point, you just have to know where the exhaustion point is with your own material and for the audience and cut it off right there.
David Perell:
When I think of your writing, I almost think of what you’re doing is you’re making a collage. The way that you write is you’re sort of collecting stories and quotes and ideas, and you sort of start off making a collage. You have all these things, but then what you’re so good at is the removal process, especially with the distillation. This story I read in this book, the writer took like 23 pages to do it.
Morgan Housel:
And summarize it for you.
David Perell:
Oh my goodness, guys, I could have done this in two and a half pages and it would be freaking awesome. You do that, and you’re really good at having these maxims to basically describe things. That’s how I think about your writing process. You’re kind of doing that over and over and over.
Morgan Housel:
Thank you. I have a huge character flaw as a husband. It bothers me when people are telling stories and not getting to the point.
My wife, love her to death, best friend forever, she tells long stories. Sometimes this is the huge character flaw that you should never do as a husband. We’ll be at like a dinner party with friends, and she’ll be telling a story, and I’ll interrupt her and I’ll be like, can I speed this up for you because you’re just going down some rabbit holes here. Not a good thing to do, but I get aggravated at stories that are longer than they need to be.
David Perell:
Isn’t it funny, though, first of all, that’s funny, and a comedian once told me that part of the key to good humor is just extreme opinions. Extreme opinions are funny. Like, the fact that you feel that way, it’s just funny to hear.
The other thing is how much of good writing, if you were to fundamentally get to the core of what makes a writer great, would be something that really, really aggravates them. It’ll either be the content for whatever it is that you share, like this thing in the world that was driving me nuts, but then for you, it’s I just can’t stand when somebody takes way too long to tell a story. That bothers me. It clearly does not bother me like it bothers you. Also, you read your writing and you’re like, no wonder Morgan Housel’s writing is like that.
Morgan Housel:
I think if you spend 20 years online, as a lot of people have, it just pushes you to do that. My wife, a huge character credit of hers and why she’s good, she spends no time on social media, so she has not been honed by fire of trying to get to the point as people online have.
David Perell:
How has writing these books changed how you read?
Morgan Housel:
I have a great sense of appreciation for good writing. There are a number of books that I love. I’m like, oh, that was a great book. I’ll tell a friend that, and they’re like, really? That book sucked. The author has no idea what he’s talking about.
There’s part of me that’s like, yeah, I know, but it’s really good writing. I enjoy good writing so much that I’m willing to look past flawed arguments and bad thinking if I’m like, yeah, but it was beautiful prose.
David Perell:
I haven’t read it, but that’s what a lot of people have told me about Gibbons’ Decline and Fall of the Roman Empire.
Morgan Housel:
Haven’t read it.
David Perell:
I’ve heard it’s like, he got a lot of things wrong. There’s a lot of things that we know about what happened with ancient Rome. It’s kind of cool that maybe his writing was just so good that you were like, yeah, it’s fine.
Morgan Housel:
I will say there was a book that I read many years ago, and I’m drawing a blank on the title of the book, so I’m giving the author a lot of discredit here, but it was a book about World War II and his book about D-Day. The sentence was, they’re talking about a platoon of troops going in on one of the boats, and it said, “All of the men were willing to give their life that day.”
Next sentence, “All of the men gave their life that day.” That’s one of those things of just like a sentence like that. I’m like, I have it’s so hard to do that. It’s so hard to write with that much punchiness and to make a point so profoundly in so few words that when I see it, I’m like, I love it. The fact that I do it and I know how hard it is makes it so when I see it, I just have a different level of respect for it.
David Perell:
Yeah. I’ve started just memorizing just stuff that I like. I mean, this is so cliche. So forgive me, but I was at dinner and a friend quoted a line from Macbeth.
He quoted it, and I was like, dude, I need to remember that. It goes like this: “Tomorrow, tomorrow, and tomorrow creeps in this petty pace from day to day to the last syllable of recorded time. And all these yesterdays have blighted fools the way to dusty death. Out, out, brief candle. Life is but a walking shadow, a poor tale told by an idiot, full of sound and fury signifying nothing.”
Morgan Housel:
It’s good.
David Perell:
And I heard that at the end, like, “full of sound and fury signifying nothing.” You’re just like, oh, my goodness, what is going on with the rhythm? Sometimes it’s like the rhythm of the way that it’s written or whatnot. Then sometimes it’s just that simplicity.
I think that as you write, as you think about the craft, you just develop this extreme awe for elegance that’s not fancy, but elegance that just has what it needs and no more.
Morgan Housel:
Yeah. When you ask what I do as a reader, there are even bloggers whose substance I disagree with, maybe their politics I disagree with, or they’re writing about things that I don’t actually disagree with them on, but I know they are such good writers and I’m reading them.
I think you only get to that point when you’re an author. I definitely was not that before I was an author. If I disagreed with someone, it’d be like, well, that’s the point of writing is for me to learn. Whereas I think I have a lot more tolerance for flawed thinking if it’s wrapped in good prose.
David Perell:
It’s interesting because I feel like your respect for the craft of writing relative to good ideas has gone up. I still think that obviously you really appreciate good ideas, but I think if we’re having this conversation five years ago, it’s the ideas that you would have been focused on a little bit more.
Now I’m just really feeling this like deep admiration for beautiful language.
Morgan Housel:
One of the things that I didn’t really understand at the time when I wrote Psychology of Money, and I think I probably could have expressed this when I wrote it, but I didn’t believe it as much as I do now, is when I turned in the manuscript for Psychology of Money, I had a deep sense of shame when I turned it in. Because I knew the truth, which is that there’s nothing original in there.
There’s no new ideas. There’s nothing in there that a million people before me haven’t said, and then a million people already know. So I kind of felt bad. I didn’t break any new ground with this book. There’s really no original concepts in here. It’s just I did my best.
I think why it worked is because I said it in a different way.
David Perell:
Yeah.
Morgan Housel:
Hopefully I said it in a good way that people enjoyed. So that just instilled in me that you don’t need to say something new, you just need to say it well. You just need to do a good job telling a good story about it with good words.
That’s been true for a lot of non fiction writers, and it can drive people nuts. You all know Harari, Nassim Taleb. A lot of these people have been accused of not breaking new ground. Sometimes it’s true, sometimes it’s not, but to the extent it’s true, it doesn’t matter. They said it really well.
Even if what they said was flawed, you’re like, “Yeah, but it’s beautiful, isn’t it?”
So much of that is a subjective thing. It’s just if someone listened to the Beatles and said, “Oh, it’s technically not good music,” what the hell does that mean? It’s good. They liked it, they enjoyed it.
I have a newfound appreciation for stories over substance, even if that sounds kind of religious. Of course I want the substance to be good. Of course I want it to do. But what matters more than anything else is how you say it.
David Perell:
Yeah, the word that I would add to that is just fun. I read your writing. It’s just fun to read.
I got to devote a few hours today to just reading your writing. It’s easy to read. It’s like drinking a really delicious smoothie. It’s definitely not cut up my broccolis, really kind of chew the steak kind of writing. It’s really fun to read. There’s a nice cadence and all that.
It’s the same thing with Nassim Taleb, all those scenes where he has Fat Tony. I just started laughing and I’m like, I get to go read about Fat Tony, and every book is going to have some new update to the Fat Tony character. I’m here for it.
Morgan Housel:
One of the things interesting about writing too is that you never know which whole chapter just flowed out of the author’s brain and which sentence took a month of agony to get right.
As a reader, you usually have no idea which one is which. So there’s a lot of times if you’re reading an author, whoever it might be, and you’re like, oh, it just flows. There’s part of me that’s like, yeah, you didn’t see the behind the scenes. There were a lot of dams here. This was not flowing. There were a lot of forks in the road here.
David Perell:
So once again, reconcile that with that. Good ideas tend to be easier to write.
Morgan Housel:
I don’t know how to reconcile it, because I believe that as well. I believe that profoundly that every time that I felt like I had a good idea, it was easy to write. And every time I got writer’s block, what actually happened was the idea sucked. The idea was wrong. And the reason I couldn’t get the words on paper is because I knew it was a dumb idea. I knew it was bad.
And so I don’t know how to reconcile that other than maybe macro-micro where if your idea is good, you can get the point on the page, but you still are going to grapple with a couple sentences here and there, a couple transitions here and there. Whereas if the idea is bad, the whole thing’s going to be aggravating for you. That’s what it tends to be.
So if you ask me which blog posts I’m proudest of, it’s by and large the ones that took me a couple hours, not that long a time to write, that just kind of sat down and just kind of got it out there and hit publish and hope for the best. That’s what I think I’m proudest of. And if you ask me which ones I was the most disappointed in, it was the ones that I labored over relentlessly for a week. And the reason that it didn’t do as well is because the idea sucked. The idea was clearly wrong.
David Perell:
Yeah. So when I was in high school, I played pretty competitive golf. And every Saturday, every Sunday, I just watched golf all day, usually in the morning. What I’d do is I’d go out and play golf in the afternoon.
And there were so many times I’d be watching Tiger Woods in his heyday and whatever, I’d be like, oh, I’m going to go out there and shoot three under par. I’m not going to miss a shot. And you develop this false sense of confidence that’s basically borrowed confidence from the tour guys that you’re watching. You go out there and you just start hacking the ball around. You remember, oh my goodness, this is so hard.
That’s how I feel when I read your writing. It’s like watching the freaking PGA Tour golfers. Like right now, I haven’t written since I read your writing. I’m like, dude, it’s going to be so easy. But there’s just that flow that somehow that I think is one of your core skills. It’s that and the storytelling.
Morgan Housel:
Another thing that comes to mind here though is when I write, I write truly one sentence at a time in terms of I will write a sentence and then get up and do the dishes and come back and write another sentence and then go talk to my wife for a couple. I really can’t. I have a hard time writing at length. I really can’t do it.
I feel like it’s just one sentence at a time. And I think part of why that is is I think when I get up to go do the dishes, I’m thinking about the next sentence. But I have a hard time connecting them in real time.
And so that’s why I bring that up because you say like it flows, which is great to hear, thank you. But when I’m writing it, there’s no flow. It tends to be when I’m writing it is very truly line by line. Every line is a little bit of a battle.
David Perell:
Wow. What do you feel like is going through your head as you’re in the early stages of a chapter? Like at what level do you feel like you have fidelity? And at what level do you feel like you’re a little more clueless?
Morgan Housel:
I think one thing that I and a lot of writers will get better at over time is I think I’m much better at not starting a blog or a chapter if it’s not going to work. Just being able to very quickly before I’ve typed a single letter, being like, that’s there’s no way that’s ever going to work, or being the opposite of before I’ve typed a single letter, being like, the psychology of money. I don’t even know what’s going to be in it. I don’t even know what I’m going to say. The psychology of money. That’s going to work. Let’s go with this.
I would say that almost without exception, when a non-writer comes to me and says, you should write about X, Y, and Z, it’s always a bad idea. I mean, like maybe a couple exceptions.
What do you think that they miss? I think you have to have done it a billion times to hone the sense of like, oh, that’s not going to work for me. Maybe that topic would have worked for you or somebody else. But how I write and how I write stories, never in a million years would that work.
David Perell:
Right.
Morgan Housel:
And that’s why working with that I’ve worked with so few editors over time is because they will, in a very well meaning, professional sense, do that. You should write about this. And like, what? No, that sounds terrible. I’d never do that.
David Perell:
Yeah.
Morgan Housel:
And so I think you just have to figure that out for yourself, but you get better at it over time. And so in a much higher degree today than it was 15 or 20 years ago, if I start writing something, it’s probably going to work out to the end. But that’s not because I’m better at just figuring it out. It’s because I’m better at not writing the thing that’s not going to work.
David Perell:
The other thing that you’ve been so deliberate about is I love how as you’ve gotten more successful, you’ve gotten more free in the sense of you just feel less busy now than you used to be. You haven’t let your schedule pile up, and obviously that’s been a super deliberate choice.
It’s pretty obvious that you talk about the book from a lifestyle perspective, but also from the perspective of a writer. Part of the reason that you become successful can be so that you can just have more time to putz around and think of ideas.
Morgan Housel:
I remember reading this thing that at least part of the reason that Jerry Seinfeld stopped his show in 1998 was that he realized that what made the show great is that he and Larry David Perell could go observe society and come up with funny observations. So they would go to a deli and watch how people ordered and make jokes out of that.
But then they became so famous and recognizable that they couldn’t do that anymore. They couldn’t go sit in Central Park and watch; they’d be mobbed. They can’t do it. So at least part of the reason that he quit was he was like, the thing that made the show so great, we can’t do anymore. It’s been cut out.
I really admire people who come to that realization. It also happens to a lot of CEOs who are really good at starting companies. But now it’s a big company, and the thing that made you great doesn’t exist anymore. The crazy risk that you used to say, you can’t do that anymore. You have to recognize that and move on.
To me, it was just a recognition of what makes good writing. I think for everybody, for every author, is just tons and tons of observation and thinking. I think every great writer spends 1% of their time writing and the rest just reading and thinking. So if I was going to fill my schedule with tasks, then I’m not reading, I’m not thinking, I’m not doing that anymore. It takes away from the thing that actually made it good to begin with.
David Perell:
It’s been really good for me. A friend told me to do this. She was like, if you want to be better at observing the world, here’s what you do: just go somewhere and play I Spy.
Morgan Housel:
Yeah.
David Perell:
I’m like, what are you talking about? So you’ll just be in an Italian sandwich shop. I spy the waitress behind the counter with a big, thick accent. I spy the cheap-looking photos of Italy on the walls.
I’m making this up now. Go to 20. Just I spy 20 things. And if you do that, all of a sudden you’re like, wait, okay, now I’m seeing things. Then if you try to communicate that to somebody else, they’re like, you are so observant. You are so. No, I’m not. I just stand there and look at 20 things. If you do that a few times a day, all of a sudden things just pop into mind, and it’s so simple. A three-year-old could do it.
Morgan Housel:
Yeah. Just being a little bit more observant.
David Perell:
I spy.
Morgan Housel:
I’ve gotten in the habit of constantly taking notes of things people said and constantly interrupting conversations. I’m sorry, I have to write that down.
David Perell:
More recently?
Morgan Housel:
Yeah, in the last five or 10 years, whenever I have a conversation or dinner with a friend, I interrupt it every five minutes to take a note of something that you just said. I would instantly forget it if I didn’t. If you do that enough over time, you come up with a ton of different insights and anecdotes that you can use as a writer.
A lot of people are not writers. But I think it’s still a worthwhile endeavor of just being more observant and taking notes of what you do. Over time, that adds up to something fantastic.
David Perell:
How do you feel like all the time that you spent learning from Ken Burns washed over your career process?
Morgan Housel:
I have more respect for him as a content creator and just as a thinker than almost anybody. I think he’s done an unbelievable job at what he’s produced.
The humility at which he’s done it, the business model that he did it through, and the storytelling ability is unparalleled. They’ll never be another Warren Buffett; they’ll never be another Ken Burns. That is a once-in-a-generation talent, once-in-a-multi-generation talent. I just think he’s done a better job at taking things that, by and large, people already know.
People know how the Civil War ended. People know how World War II ended. So much ink has been spilled on every topic that he’s covered, and he said it in a way that no one else has ever said before. Doing so added more value than anybody else has done. I’ve watched all of his documentaries, at least the vast majority of them, multiple times. You learn something different every time because they’re stories. It’s not just statistics you can remember. Memorize statistics, but stories hit you in a different way at different times. He’s the absolute greatest at what he does.
David Perell:
What do you think you’ve pulled from him?
Morgan Housel:
Stories, the idea. I think he was one of the first where I recognized, like the Civil War documentary, there’s not a lot of new information in there. You know, people know how the battles played out and whatnot. If you’re talking about statistics and information, there’s virtually nothing new in there. But the stories are just absolutely sensational. They’re the best stories that hadn’t been told before.
And the music that’s in it, the transitions that are in it, the things that you might completely overlook. The voice of the narrator is very well thought out.
I think I’ve talked about this before, that the background music, he will literally edit the script so that a beat in the music will hit at a powerful word. And, like, no other historians do that. And that’s why a lot of history books are just dry and tedious, but a Ken Burns documentary, they can make you cry. They’re so powerful.
David Perell:
Yeah, it really is such a lesson from our conversation so far is you just don’t need new ideas. You just got to find what is the way to tell this story either more eloquently or in some sort of way that hasn’t been told. Sometimes just finding the person out of the spotlight will give you a different perspective on whatever’s going on.
Morgan Housel:
You don’t have to say new things. You just have to say them better.
David Perell:
Tell me about this John Grisham line of the slow buildup followed by the sudden shocks.
Morgan Housel:
Oh, yeah. I mean, so many John Grisham books. I love John Grisham. I know some people think of it as trash fiction, but I love it. I can’t get enough of it.
What’s interesting about John Grisham is that a lot of his chapters are very slow and grinding, and you’re like, “What? What?” All of a sudden, he just hits you out of the middle of nowhere, and you’re like, “Oh, gosh, I didn’t even see that coming.” It’s more powerful when it happens because he pulled you in with tedium and boredom, and then he just slaps you across the face with something big. The buildup to it is so incredibly powerful. It happens in a lot of movies, too.
David Perell:
That doesn’t seem like something that you do as much of, though.
Morgan Housel:
No, I think it works in fiction, where you’re just being dragged through what is truly just a storyline. It’s probably less well in nonfiction, where you really got to keep the person engaged because you’re trying to teach them something. So I think it works in that element. A lot of movies are like that as well, and John Grisham, too. There are huge plot twists that he’ll explain in one sentence. He’s not going to take 10 pages. He’ll just be like, “And then Joe was shot in the head,” and you’re like, “Whoa, where did this come from?”
David Perell:
I remember when I watched Parasite, people were like, “Oh, this movie’s so good. This movie’s so good.” I was watching the movie, and I was, like, raising an eyebrow, like, “This is what everyone said was so good?”
Over time, you’re like, “Okay, there’s this story that’s unfolding. There’s this story that’s unfolding. There’s this story that’s unfolding.” And I’m like, “Come on, what’s going on here?” Then, boom. It’s like plot twist. And now it’s just one of my favorite movies. It just took that time, and there’s the cadence, the tempo, the tension, the suspense that builds.
I agree with you, in a movie and in a fiction book, that’s kind of what you’re there for. But nonfiction stories are kind of in service of some other things. They’re less of the end in themselves.
Morgan Housel:
I mean, it’s very often in fiction that you’ll be reading and you’re like, “Why does he keep talking about the cat on the couch?”
David Perell:
Right.
Morgan Housel:
You keep bringing this up and it just seems like fluff. Then in chapter 18, I like...
David Perell:
That pun, by the way, it’s just fluff, the cat.
Morgan Housel:
But then, like in chapter 18, the cat on the couch is the game changer in the story, whatever it might be. So there’s a lot of times where they’ll keep talking about little things that you’re like, “Why do you keep saying this?” And you’re like, “Oh, now I got why you did that. Okay, totally.”
David Perell:
How do you think about one of the things that I’ve also noticed you do more and more is develop a kind of frame for the book?
So this is The Art of Spending Money. I noticed a few things, like this sentence: “In school, finance is taught as a science with clean formulas and logical conclusions, but in the real world, money is an art.” Then you say, “This book is about how spending money has little to do with spreadsheets and numbers and a lot to do with psychology, envy, social aspirations, identity, insecurity, and other topics that are too often ignored in finance.”
It’s interesting to trace your work, where Psychology of Money was basically a collection of something like 21 essays. This is very much, I have almost like an integrated way of thinking about the book that I’m trying to write, the problem that I’m trying to solve. For lack of a better word, it feels like in that way you’ve matured as a writer.
Morgan Housel:
I think Psychology of Money was a little bit more disparate, but it was really the psychology of building wealth. That was the common denominator there.
That wasn’t really the intention, but that’s how it turned out. There was a common denominator. There is the psychology of building wealth, and this is the psychology of spending wealth.
There’s a lot in here that’s disparate. I go in all sorts of different directions and whatnot because everybody knows the classic nonfiction book that could have been an article. Just like you just made one point and then you just repeated yourself for 300 pages. I want to avoid that as much as I can. I mean, here’s a broad theme. But now I’m going to go in 47 different directions to make sure I’m not repeating myself and the same ideas over and over again. That’s always been the case. But I always think there needs to be a common theme within there; otherwise, it’s just a hodgepodge of random ideas.
David Perell:
Do you feel like we need more books to be written or fewer?
Morgan Housel:
Oh, I definitely think there’s room for as many ideas as possible because there are countless authors and books where the author was effectively a nobody when they wrote it. You have to have the chance to do it.
I’ll tell you one of my favorite stories, and I use this in the book. It’s one of those stories I heard in the last couple of years, and I was like, “Oh, this is the one.” It’s a story told by Kevin Costner.
David Perell:
Okay.
Morgan Housel:
This is back in the 1980s when he was still kind of a budding actor. He was a famous actor, but let’s say he was like a B-list actor at the time, and he had a friend who was homeless.
Because he was homeless, Kevin Costner and his wife invited him to stay in their basement. The homeless friend was a writer; he wrote manuscripts for books.
As he’s living with the Costners in their basement, he’s constantly telling Kevin and his wife, “I’m writing this thing. It’s the best thing I’ve ever written. Please read it. Please read it.”
But they refused because he was their homeless friend in the basement.
So he’s living with the Costners for several months, and eventually, Kevin Costner’s wife says, “He’s got to go. He’s been here too long, he’s got to go.”
So they kick him out, and now he’s back on the streets. As he’s homeless, he’s calling Kevin every day, being like, “Have you read the manuscript yet? Have you read it yet? Please read it.”
Kevin finally says, “Fine, I’ll read your damn manuscript. Send it over, I’ll read it.”
He reads it, and the manuscript is titled Dances with Wolves, which became his biggest movie. His point was that you never know where talent’s going to come from. You have to give everybody a chance.
The system is pretty meritocratic today. People like Nick Maggiulli were talented from day one and pretty much got credit on day one. Maybe he got credit on day 60, but he started as a blogger, and he was really good, and instantly people were like, “That’s a good blogger. You should pay attention to him over here.”
But you have to give everyone a chance because writing is an art. It’s not a science where the person who graduates from school with a PhD in creative writing is going to be the best creative writer. That’s not the case at all.
J.K. Rowling was a broke, single mother. That was her backstory, and she became the greatest fiction writer of all time. In anything that is art-driven, not objectively driven like how fast you can run or the quality of your engineering, everyone deserves a chance because it’s purely subjective.
David Perell:
Wasn’t Psychology of Money rejected?
Morgan Housel:
Yes, by every US publisher. It’s published by Harriman House, which is a British publisher. They are wonderful people, good friends of mine now, but the truth is they were the only publisher in the world that even gave it a chance.
I don’t look back at that experience of every US publisher rejecting it with any sense of, “You idiots!” There’s none of that because it’s all very subjective, and you really don’t know what’s going to hit. You really have no idea what’s going to work and what’s not going to work. I don’t have any ill feelings about that. It’s a really hard thing to figure out what makes a book tick.
David Perell:
Thanks, dude.
Morgan Housel:
Thanks, buddy. Always good to see you.
