Page 183 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

economy suffered its worst hit in 80 years.

COBACOBA
This is different from, say, Germany in 1945, whose manufacturing base
had been obliterated. Or Japan in the 2000s, whose working-age population
was shrinking. That’s tangible economic damage. In 2009 we inflicted

narrative damage on ourselves, and it was vicious. It’s one of the most
potent economic forces that exists.

When we think about the growth of economies, businesses, investments and
careers, we tend to think about tangible things—how much stuff do we have
and what are we capable of?

But stories are, by far, the most powerful force in the economy. They are the
fuel that can let the tangible parts of the economy work, or the brake that
holds our capabilities back.

At the personal level, there are two things to keep in mind about a story-
driven world when managing your money.

1. The more you want something to be true, the more likely you are to
believe a story that overestimates the odds of it being true.

What was the happiest day of your life?

The documentary How to Live Forever asks that innocent question to a

centenarian who offered an amazing response.

“Armistice Day,” she said, referring to the 1918 agreement that ended
World War I.

“Why?” the producer asks.

“Because we knew there would be no more wars ever again,” she says.