Episode Details

A number of years ago I started making a list of all the things one needed to know about investing.

I wanted to capture the favorite quotes I have read and the lessons I have learned.

This ended up being a more ambitious project than I envisaged, and it remains an ongoing one.

So, in today's show, Mark Creedon and I are going to share with you a list of 24 things we believe you need to understand about investing, the economy, and business, and this list is based on the musings of Morgan Housell, my favorite finance writer, and I'm sure you'll gain some insights from my chat with Mark today whether you're a beginning or an experienced investor or a businessperson.

24 Lessons About Investing and the Economy

Over the years one of my favorite columnists whose articles I read regularly is Morgan Housell who used to write for Motley Fool and now writes for Collaborative Fun

He writes a lot about behavioral finance and why supposedly rational people act irrationally when it comes to money, finance, and business.

A number of years ago he wrote a great column where he detailed 122 things everyone should know about investing and the economy and there were some great lessons to take away from that article. I've pulled a number of these out today to discuss with my business partner Mark Creedon founder of Business Accelerator Mastermind.

1. Saying "I'll be greedy when others are fearful" is easier than actually doing it.
2. When most people say they want to be a millionaire, what they really mean is "I want to spend $1 million," which is literally the opposite of being a millionaire.
3. Daniel Kahneman's book Thinking Fast and Slow begins, "The premise of this book is that it is easier to recognize other people's mistakes than your own." This should be every market commentator's motto.
4. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."
5. There is a difference between, "He predicted the crash of 2008," and "He predicted crashes, one of which happened to occur in 2008." It's important to know the difference when praising investors.
6. Wealth is relative. As comedian Chris Rock said, "If Bill Gates woke up with Oprah's money he'd jump out the window."
7. The Financial Times wrote, "In 2008 the three most admired personalities in sport were probably Tiger Woods, Lance Armstrong, and Oscar Pistorius." The same falls from grace happen in investing. Choose your role models carefully.
8. Investor Nick Murray once said, "Timing the market is a fool's game, whereas time in the market is your greatest natural advantage." Remember this the next time you're compelled to cash out..
9. Jason Zweig writes, "The advice that sounds the best in the short run is always the most dangerous in the long run."
10. Billionaire investor Ray Dalio once said, "The more you think you know, the more closed-minded you'll be." Repeat this line to yourself the next time you're certain of something.
11. John Reed once wrote, "When you first start to study a field, it seems like you have to memorize a zillion things. You don't. What you need is to identify the core principles — generally three to twelve of them — that govern the field. The millions of things you thought you had to memorize are simply various combinations of the core principles." Keep that in mind when getting frustrated over complicated financial formulas.
12. James Grant says, "Successful investing is about having people agree with you … later."
13. Scott Adams writes, "A person with a flexible schedule and average resources will be happier than a rich person who has everything except a flexible schedule. Step one in your search for happiness is to continually work