Page 104 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

doubled since 1975. A 1989 Ford Taurus (sedan) averaged 18.0 MPG. A
2019 Chevy Suburban (absurdly large SUV) averages 18.1 MPG.
COBACOBA

The world grew its “energy wealth” not by increasing the energy it had, but
by decreasing the energy it needed. U.S. oil and gas production has

increased 65% since 1975, while conservation and efficiency has more than
doubled what we can do with that energy. So it’s easy to see which has
mattered more.

The important thing here is that finding more energy is largely out of our
control and shrouded in uncertainty, because it relies on a slippery mix of
having the right geology, geography, weather, and geopolitics. But
becoming more efficient with the energy we use is largely in our control.
The decision to buy a lighter car or ride a bike is up to you and has a 100%

chance of improving efficiency.

The same is true with our money.

Investment returns can make you rich. But whether an investing strategy
will work, and how long it will work for, and whether markets will
cooperate, is always in doubt. Results are shrouded in uncertainty.

Personal savings and frugality—finance’s conservation and efficiency—are
parts of the money equation that are more in your control and have a 100%
chance of being as effective in the future as they are today.

If you view building wealth as something that will require more money or

big investment returns, you may become as pessimistic as the energy
doomers were in the 1970s. The path forward looks hard and out of your
control.

If you view it as powered by your own frugality and efficiency, the destiny
is clearer.

Wealth is just the accumulated leftovers after you spend what you take in.
And since you can build wealth without a high income, but have no chance
of building wealth without a high savings rate, it’s clear which one matters
more.