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Morgan Housel: The Art of Spending Money

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by The Second City

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Oct 07, 2025

Kelly welcomes the always inspiring Morgan Housel back to the podcast to discuss his new book “The Art of Spending Money: Simple Choices for a Richer Life.” 

 

In the author’s note that opens the book you write, “Money is less about numbers and more about stories we tell ourselves about what matters, what makes us happy, and how we measure success. Spending money is more art than science.” 

“I could have called this book the science of spending money, but I didn’t because I don’t think that exists. I don’t think there’s a science of spending money. Everybody is so different. We’re all products of different backgrounds and different generations and different family dynamics. And it’s an art. And art means that it’s individual. What works for me might not work for you. It can mean it’s contradictory. It can mean it changes throughout the course of your life. It’s a much messier field than we want to think exists. Everybody wants just a formula for how to do it.” 

 

I just interviewed Richard Thaler for the podcast who reminds us that we make a mistake when we think people are making purely rational decisions in economics broadly. 

“There’s a distinction between if I look at you and I say, ‘The way you spend your money is not rational.’ It actually might be rational for you, but not for me. And so, it’s always in the eye of the beholder. I think that’s true for a lot of things in finance, whether it’s investing or how you make money, how you spend money, how you save money. Most debates are actually not people disagreeing with each other, it’s just people who are very different talking over each other. And people understand that if we’re talking about our taste in music or our taste in food or taste in movies, people understand that’s subjective. And what works for you might not work for me, no problem. But with money, they want to think of it as a science. They want to think of it as this should be two plus two equals four. There should be an answer that works for everybody. And I think that’s the flaw for a lot of things in finance is people thinking that it’s more scientific than it is.” 

 

You have a line in the book that I have used over and over again since reading it, “All behavior makes sense with enough information.” 

“Well, I wrote this in the book. I got that from my brother-in-law who’s a social worker. And he says that’s a common phrase in social work when you are dealing with a child whose behavior is atrocious. They’re not going to school, they’re getting into fights, they’re doing drugs, whatever it might be. All behavior makes sense with enough information. If you dig into that child’s life and see what they’re dealing with at home, you will understand it a little bit. You don’t justify it, you don’t say it’s fine, but you understand why they’re doing it. All behavior makes sense with enough information.” 

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