Page 202 - Morgan Housel - The Psychology of Money_ Timeless Lessons on Wealth, Greed, and Happiness-Harriman House Limited (2020)

family, there is no one right answer. There is no universal truth. There’s
only what works for you and your family, checking the boxes you want
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checked in a way that leaves you comfortable and sleeping well at night.

There are basic principles that must be adhered to—this is true in finance

and in medicine—but important financial decisions are not made in
spreadsheets or in textbooks. They are made at the dinner table. They often
aren’t made with the intention of maximizing returns, but minimizing the
chance of disappointing a spouse or child. Those kinds of things are
difficult to summarize in charts or formulas, and they vary widely from
person to person. What works for one person may not work for another.

You have to find what works for you. Here’s what works for me.

How my family thinks about savings

Charlie Munger once said “I did not intend to get rich. I just wanted to get
independent.”

We can leave aside rich, but independence has always been my personal
financial goal. Chasing the highest returns or leveraging my assets to live
the most luxurious life has little interest to me. Both look like games people
do to impress their friends, and both have hidden risks. I mostly just want to

wake up every day knowing my family and I can do whatever we want to
do on our own terms. Every financial decision we make revolves around
that goal.

My parents lived their adult years in two stages: dirt poor and moderately
well off. My father became a doctor when he was 40 and already had three
kids. Earning a doctor’s salary did not offset the frugal mentality that is

forced when supporting three hungry kids while in medical school, and my
parents spent the good years living well below their means with a high
savings rate. This gave them a degree of independence. My father was an
Emergency Room doctor, one of the highest-stress professions I can