Housel’s Spending Mistakes

The summary list of mistakes from Morgan Housel’s excellent sequel to the Psychology of Money, The Art of Spending Money:

1. Direct your gaze at the socioeconomic group just above you, assuming that within it you will find a level of durable happiness.
2. Pursue status at the expense of independence.
3. Let money—the making of it, the spending of it, the accumulation of it—become a core part of your identity.
4. Spend so much of your income that you become completely reliant on the decisions of other people, like bosses and bankers,
5. Fantasize that having more money is the solution to all your problems.
6. Assume money can solve none of your problems, and that it is the root of evil and ego.
7. Have such a fierce saving ideology that you’re never able to treat yourself to a good life you can afford.
8. When taking stock of your own life, assume that all your success is due to hard work and all your failure is due to bad luck.
9. Compare your inside with other people’s outside, envying others’ success without having a full picture of their lives.
10. Ignore the hidden social, emotional, and expectations costs that come from certain purchases.
11. Have no sense of your own tendency to regret.
12. Associate net worth with self-worth (for you and others).
13. Treat all financial decisions as math decisions with no appreciation for reasonable emotion, sentimental value, and desire to feed your soul.
14. Be persuaded by the advice and lifestyle of those who need or want something you don’t.
15. Anchor your lifestyle expectations to the most successful people you know,
16. Become so optimistic that your expectations grow faster than income.
17. Risk what you need in order to gain what you don’t need.
18. Overestimate the attention you get from having nice stuff,
19. Assume you have all the right answers.

In the end:

When you accept how messy money can be, you value good-enough simplicity over the false comfort of complexity.

So:

Spend less than you make. Quietly compound. Money serves you, not the other way around. No one is thinking about you as much as you are. Independence is wealth. Health is wealth. Aim to be a good ancestor. Love your family.

Nothing but simple, timeless truths, most of which you’ve seen before. And yet: Very easy read, good financial CME. Highly recommended.