Featured entries from our Journal

Details Are Part of Our Difference

Embracing the Evidence at Anheuser-Busch – Mid 1980s

529 Best Practices

David Booth on How to Choose an Advisor

The One Minute Audio Clip You Need to Hear

Tag: Morgan Housel

A Quote We Love – Smart and Patient Wins Again

Podcast guest and personal finance author Morgan Housel recently wrote a piece warning of the dangers of trying to take the “fast” approach to investing. Housel’s “Too Much, Too Soon, Too Fast” tells the story of what happened to the third, lesser-known, investing partner of Warren Buffett and Charlie Munger.

Here’s an excerpt:

Everyone knows the investing duo of Warren Buffett and Charlie Munger. But 40 years ago, there was a third member, Rick Guerin. The three made investments together. Then Rick kind of disappeared while Warren and Charlie became the most famous investors of all time.

A few years ago, hedge fund manager Mohnish Pabrai asked Buffett what happened. Rick, Buffett explained, was highly leveraged and got hit with margin calls in the 1970s bear market.

Buffett told Pabrai:

“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.”

Check out the full story here.

Podcast Episode: Morgan Housel

Morgan Housel just wrote THE book you need to read, and our pick for the November Book Club. In this episode, the esteemed financial writer joins Matt Hall and shares insights into his own investing strategies, an event that shaped his outlook on risk, a story about a janitor who left behind millions of dollars to charity, and why behavior is the most important factor in mastering your financial life.

Listen here.

November Book Club

This month, our team read the new Morgan Housel book, The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness.  It is THE best personal finance book we have read in a long time. Why? It is filled with real stories that show, instead of just tell, the real impact investing behavior has on people’s financial lives. Matt Hall recently interviewed Morgan Housel on his podcast, and Housel shared some of these astounding stories and more. Listen here!

Our favorite takeaways:

Rich vs. Wealthy

Rich is out in the open like a flashy sports car, while wealth is the money that you don’t see but has the capacity to change lives – yours or others. “Rich” is empty. Wealth is rock-solid. How do we get wealthy? Save a bit more than you spend over a long period of time, and try not to interrupt the compounding. Sound familiar?

The importance of time, and the magic of compounding 

Compounding is so hard to imagine because it is by definition not intuitive. Warren Buffet is 90 years old, and he’s worth roughly $90 billion. That’s a huge number. It gets even crazier when you realize 99% of his net worth came after his 50th birthday, and 97% came after his 65th birthday. That’s worth repeating – 99% of his net worth came after 50. The lesson: once wealth starts compounding over time, the numbers get bigger faster than you can imagine. Also, it’s really never too late; however, starting today (or yesterday) is the best. That’s the long view in neon lights! 

How to feel “better off”

If the more you make the more you spend, it will always feel like the goal line is moving. To feel better off, growing the gap between what you earn and what you spend is key. One exercise that has helped our clients is understanding what “enough” means for them. From a place of enough, any additional dollar earned contributes to growing wealth. 

So how do you define “enough”? In our experience, a simple dinner conversation with family is a great place to start. If you want help facilitating that family conversation, let us know – family meetings are one of our favorite services to provide. 

Do you eat your own cooking?

At HIG, we “eat our own cooking.” Translation: we invest our personal investments the same way we invest our client’s. While that sounds like an obvious statement, it is not the norm in the financial advice world. Sadly, not even close. Morgan talks about how important it is to ask experts how they apply their expertise to themselves or their family. For example, ask your doctor what kind of care they would want if they were in your shoes. You might be surprised by the answer.  Curious to learn more? Give us a call.

Featured entries from our Journal

Details Are Part of Our Difference

Embracing the Evidence at Anheuser-Busch – Mid 1980s

529 Best Practices

David Booth on How to Choose an Advisor

The One Minute Audio Clip You Need to Hear

Hill Investment Group