
Eating my delicious parfait this morning, I did what most men of my age do and turn on YouTube. I came across a [video of Ryan Holiday and Morgan Housel touring Holiday's bookstore](https://youtu.be/RHayBwf8cJY?si=CWmPXyqh7S0gTHKJ&t=356).

At one point, Ryan asks Morgan if he's read Die with Zero, and then they go off talking about some of the ideas in the book. I've heard of the book, but haven't read it. The main idea in the book is why save all of your money to give to your kids when they're 60 and probably don't need it, when they *really* could've used it when they were 32 trying to put a down payment on a home.

A corollary idea to that, and what Morgan and Ryan start talking about in the video, is that they both are not living off of the money they saved in they're early twenties. Morgan says something like "Yeah, you were robbing yourself of living then to save money you don't really need now."

Obviously, two New York Times bestselling authors are not the typical run-of-the-mill, middle class earners, so their income every year is likely outpacing what they made the entire decade of their twenties, but the idea is interesting.

Assuming you went to college and have a somewhat stable job that provides you with a relatively foreseeable path to increase your earning potential, saving ludicrously in your early twenties might not make a whole lot of sense. I'm not saying you shouldn't keep an emergency fund—it still blows my mind how many of my friends and acquaintances just have $0 in case something goes wrong—but I'm not sure how much that $50 tossed in your retirement fund periodically in your twenties is going to help, if you'll be able to toss in a whole lot more in your early thirties.

As I wrote this post, though, part of me is like, well who knows how much you're actually going to make, and the $50 periodically in a roth IRA is probably in a better place than buying overpriced cocktails at a bar on the weekends, so maybe saving in your twenties does make a whole lot of sense.

Morgan alludes to this. He says you might make a whole lot of money in your fourties, but you might not. And if you're the type of person who went into a whole lot of debt in your twenties because you knew you were going to make a whole lot of money in your fourties, you might be screwed.

But then Ryan also makes a good point, basically saying that he lives off of the money he makes now, and not off the money or income gains from what he saved when he was in his twenties. That part of the argument I like. Morgan then follows that with, "You were robbing yourself of pleasure when you were twenty three so you can make money in your thirties that you don't need."

I'm not really sure what parts of this idea I like and dislike, other than that I think the idea in and of itself is interesting to think about.

Why save in your twenties when you'll earn in your fourties?

The title of this book is gaudy. I admit that. But it caught my attention when I wasn't trying to read a book like this, so maybe gaudy titles work.

The book and its contents, however, are not gaudy. Barnum gives quite a few "lessons" about how to be successful in life and business. Reading them, it seemed like an original version of [Kevin Kelly's advice](https://kk.org/thetechnium/68-bits-of-unsolicited-advice/).

Here are my highlights and notes.

### Introduction

How to get rich: spend less than you earn.

> Mr. Micawber, one of those happy creations of the genial Dickens, puts the case in a strong light when he says that to have annual income of twenty pounds per annum, and spend twenty pounds and sixpence, is to be the most miserable of men; whereas, to have an income of only twenty pounds, and spend but nineteen pounds and sixpence is to be the happiest of mortals.

> True economy consists in always making the income exceed the outgo.

---

It's important to save money, but don't do it at the expense of losing knowledge:

> A few years ago, before kerosene oil was discovered or thought of, one might stop overnight at almost any farmer’s house in the agricultural districts and get a very good supper, but after supper he might attempt to read in the sitting-room, and would find it impossible with the inefficient light of one candle. The hostess, seeing his dilemma, would say: “It is rather difficult to read here evenings; the proverb says, ‘you must have a ship at sea in order to be able to burn two candles at once;’ we never have an extra candle except on extra occasions.” These extra occasions occur, perhaps, twice a year. In this way the good woman saves five, six, or ten dollars in that time: but the information which might be derived from having the extra light would, of course, far outweigh a ton of candles.

---

Classic advice on how to change your ways:

> Here is a recipe which I recommend: I have found it to work an excellent cure for extravagance, and especially for mistaken economy: When you find that you have no surplus at the end of the year, and yet have a good income, I advise you to take a few sheets of paper and form them into a book and mark down every item of expenditure. Post it every day or week in two columns, one headed “necessaries” or even “comforts,” and the other headed “luxuries,” and you will find that the latter column will be double, treble, and frequently ten times greater than the former. The real comforts of life cost but a small portion of what most of us can earn.

---

Keep a clear mind:

> These remarks apply with tenfold force to the use of intoxicating drinks. To make money, requires a clear brain. A man has got to see that two and two make four; he must lay all his plans with reflection and forethought, and closely examine all the details and the ins and outs of business. As no man can succeed in business unless he has a brain to enable him to lay his plans, and reason to guide him in their execution, so, no matter how bountifully a man may be blessed with intelligence, if the brain is muddled, and his judgment warped by intoxicating drinks, it is impossible for him to carry on business successfully.

---

### Don't mistake your vocation

If you pick the wrong job, you'll never win.

> If a man was to take such a boy as I was, and attempt to make a watchmaker of him, the boy might, after an apprenticeship of five or seven years, be able to take apart and put together a watch; but all through life he would be working up hill and seizing every excuse for leaving his work and idling away his time. Unless a man enters upon the vocation intended for him by nature, and best suited to his peculiar genius, he cannot succeed. I am glad to believe that the majority of persons do find their right vocation. Yet we see many who have mistaken their calling, from the blacksmith up (or down) to the clergyman.

---
### Avoid debt

> Money is in some respects like fire; it is a very excellent servant but a terrible master. When you have it mastering you; when interest is constantly piling up against you, it will keep you down in the worst kind of slavery. But let money work for you, and you have the most devoted servant in the world.

---

### Whatever you do, do it with all your might

> Work at it, if necessary, early and late, in season and out of season, not leaving a stone unturned, and never deferring for a single hour that which can be done just as well *now*.

>  Many a man acquires a fortune by doing his business thoroughly, while his neighbor remains poor for life, because he only half does it.

> Fortune always favors the brave, and never helps a man who does not help himself. It won’t do to spend your time like Mr. Micawber, in waiting for something to “turn up.” To such men one of two things usually “turns up:” the poorhouse or the jail; for idleness breeds bad habits, and clothes a man in rags.

---

### Depend on Your Own Personal Exertions

> He will be like the Yankee tin-peddler, who, having been cheated as to quality in the purchase of his merchandise, said: “All right, there’s a little information to be gained every day; I will never be cheated in that way again.” Thus a man buys his experience, and it is the best kind if not purchased at too dear a rate.

> The possession of a perfect knowledge of your business is an absolute necessity in order to insure success.

> “Like causes produce like effects.” If a man adopts the proper methods to be successful, “luck” will not prevent him. If he does not succeed, there are reasons for it, although, perhaps, he may not be able to see them.

---

### Use the Best Tools

>  An important element in an employee is the brain. You can see bills up, “Hands Wanted,” but “hands” are not worth a great deal without “heads.”

---

### Don't Get Above Your Business

> The great ambition should be to *excel* all others engaged in the same occupation.
> The college-student who was about graduating, said to an old lawyer:
> “I have not yet decided which profession I will follow. Is your profession full?”
> “The basement is much crowded, but there is plenty of room *upstairs*,” was the witty and truthful reply.
> No profession, trade, or calling, is overcrowded in the upper story. Wherever you find the most honest and intelligent merchant or banker, or the best lawyer, the best doctor, the best clergyman, the best shoemaker, carpenter, or anything else, that man is most sought for, and has always enough to do.

---

### Learn Something Useful

> Every man should make his son or daughter learn some useful trade or profession, so that in these days of changing fortunes of being rich today and poor tomorrow they may have something tangible to fall back upon. This provision might save many persons from misery, who by some unexpected turn of fortune have lost all their means.

(I like this argument for when people say AI will take their job. Just...learn something else?)

---

### Do Not Scatter Your Powers

> Engage in one kind of business only, and stick to it faithfully until you succeed, or until your experience shows that you should abandon it. A constant hammering on one nail will generally drive it home at last, so that it can be clinched. When a man’s undivided attention is centered on one object, his mind will constantly be suggesting improvements of value, which would escape him if his brain was occupied by a dozen different subjects at once. Many a fortune has slipped through a man’s fingers because he was engaged in too many occupations at a time. There is good sense in the old caution against having too many irons in the fire at once.

---

### Be Systematic

> Men should be systematic in their business. A person who does business by rule, having a time and place for everything, doing his work promptly, will accomplish twice as much and with half the trouble of him who does it carelessly and slipshod.

---

### Beware of "Outside Operations"

> however successful a man may be in his own business, if he turns from that and engages ill a business which he don’t understand, he is like Samson when shorn of his locks﻿—his strength has departed, and he becomes like other men.

> If a man has plenty of money, he ought to invest something in everything that appears to promise success, and that will probably benefit mankind; but let the sums thus invested be moderate in amount, and never let a man foolishly jeopardize a fortune that he has earned in a legitimate way, by investing it in things in which he has had no experience.

---

### Advertise Your Business

>  A French writer says that “The reader of a newspaper does not see the first mention of an ordinary advertisement; the second insertion he sees, but does not read; the third insertion he reads; the fourth insertion, he looks at the price; the fifth insertion, he speaks of it to his wife; the sixth insertion, he is ready to purchase, and the seventh insertion, he purchases.” Your object in advertising is to make the public understand what you have got to sell, and if you have not the pluck to keep advertising, until you have imparted that information, all the money you have spent is lost.

---

### Be Polite and Kind to Your Customers

> The truth is, the more kind and liberal a man is, the more generous will be the patronage bestowed upon him.

---

### Don't Blab

> Some men have a foolish habit of telling their business secrets. If they make money they like to tell their neighbors how it was done. Nothing is gained by this, and ofttimes much is lost. Say nothing about your profits, your hopes, your expectations, your intentions. And this should apply to letters as well as to conversation. Goethe makes Mephistophiles say: “Never write a letter nor destroy one.” Business men must write letters, but they should be careful what they put in them. If you are losing money, be specially cautious and not tell of it, or you will lose your reputation.

---

### Preserve Your Integrity

> It is more precious than diamonds or rubies.

> To all men and women, therefore, do I conscientiously say, make money honestly, and not otherwise 

The Art of Money Getting by P.T. Barnum

## Impressions

*I didn't really know what to think of this book before I started reading it. I really like Morgan Housel's blogs and so it was a no brainer whether or not to buy his book when it came out. I was pleasantly surprised with the actionable insights and takeaways for managing money. Though the focus is mainly on the psychology, as you could imagine, it does give some practical tips.*

*This book would pair well with [Ramit Sethi's I Will Teach You To Be Rich.](https://www.iwillteachyoutoberich.com/) Housel's book gives some psychological factors to think about and Sethi gives more practical advice on how to actually manage your money.*

## Actionable Takeaways
1. Just because you say you will do something when everything goes to hell doesn't mean you actually will. It's easy to *say* you'll buy when the market crashes and there is blood in the streets. But it's a totally different thing to actually do that when your portfolio is down 35% in one day.
2. Usually when people think about the market crashing 30%, they *only* think about the market crashing 30%. The problem with that is that when the market actually crashes 30%, it's because there is a massive deadly pandemic or a horrific terroist attack.
3. Managing money well is all about behavior.
4. Every decision someone makes, makes sense to them at the time. If you're baffled at how someone is behaving, try to think like they do. No one makes a decision thinking, "This makes no sense to me but I'm going to do it."
5. Good investing isn't getting crazy high, one-off returns. Instead, it's getting pretty average returns for an absolutely unbelievable amount of time.
6. Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.
7. Saving is as much psychological as it is tactical. Yes it requires you to physically put money away in an account somehow, but it also requires that you spend less. And you can't spend less if you're worried about what other people think of you.
8. Just because something hasn't happened before doesn't mean it can't happen. No one expected The Great Depression until it did. No one assumed WW2 would break out until it did. Don't use history, or the lackthereof as a predictor of future catastrophes. The future will most likely be much worse.
9. If you make too little money, you will never be able to retire. If you make too much money, you regret working so hard all of those years. The solution? Stay in the middle.
10. Not everyone is playing the same game. And one when group of people playing for a certain outcome get their moves and tactics from another group of people playing for a different outcome, the result is catastrophic.
11. Wealth is created by suppressing what you could buy today in order to have more stuff or more options in the future.
12. Use the money you earn to buy control over your time. Because the ability to do what you want, when you want, with who you want, is the biggest wealth benefit of all.

## Quotes
- "History never repeats itself. Man always does."
- "Be careful who you praise and admire. Be careful who you look down upon and wish to avoid becoming."
- "Getting money is one thing. Keeping it is another."
- "“It’s not whether you’re right or wrong that’s important,” George Soros once said, “but how much money you make when you’re right and how much you lose when you’re wrong.” You can be wrong half the time and still make a fortune."
- "But doing something you love on a schedule you can’t control can feel the same as doing something you hate."
- "Every bit of savings is like taking a point in the future that would have been owned by someone else and giving it back to yourself."
- "The historical odds of making money in U.S. markets are 50/50 over one-day periods, 68% in one-year periods, 88% in 10-year periods, and (so far) 100% in 20-year periods. Anything that keeps you in the game has a quantifiable advantage."
- "A good rule of thumb for a lot of things in life is that everything that can break will eventually break
- "Bubbles do their damage when long-term investors playing one game start taking their cues from those short-term traders playing another."
- "Growth is driven by compounding, which always takes time. Destruction is driven by single points of failure, which can happen in seconds, and loss of confidence, which can happen in an instant
- "Expecting things to be bad is the best way to be pleasantly surprised when they’re not."
- "Coming to terms with how much you don’t know means coming to terms with how much of what happens in the world is out of your control."
- "Use money to gain control over your time, because not having control of your time is such a powerful and universal drag on happiness. The ability to do what you want, when you want, with who you want, for as long as you want to, pays the highest dividend that exists in finance."
- "I can afford to not be the greatest investor in the world, but I can’t afford to be a bad one."

## Bonus (Stories, illustrations, & things that made me go wow.)
- A quote about another partner Warren Buffett did business with and how he wanted to get rich quick:
	 > Warren, Charlie, and Rick made investments together and interviewed business managers together. Then Rick kind of disappeared, at least relative to Buffett and Munger’s success. Investor Mohnish Pabrai once asked Buffett what happened to Rick. Mohnish recalled: [Warren said] “Charlie and I always knew that we would become incredibly wealthy. We were not in a hurry to get wealthy; we knew it would happen. Rick was just as smart as us, but he was in a hurry.” What happened was that in the 1973–1974 downturn, Rick was levered with margin loans. And the stock market went down almost 70% in those two years, so he got margin calls. He sold his Berkshire stock to Warren—Warren actually said “I bought Rick’s Berkshire stock”—at under $40 a piece. Rick was forced to sell because he was levered.
- > In Pharaonic Egypt … scribes tracked the high-water mark of the Nile and used it as an estimate for a future worst-case scenario. The same can be seen in the Fukushima nuclear reactor, which experienced a catastrophic failure in 2011 when a tsunami struck. It had been built to withstand the worst past historical earthquake, with the builders not imagining much worse—and not thinking that the worst past event had to be a surprise, as it had no precedent.


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