The Diary Of A CEO with Steven Bartlett
The Savings Expert: They're Lying To You About Buying A House! Tariffs Are About To Skyrocket Cost Of Living! Here's The Truth About America Collapsing!
Mon, 28 Apr 2025
Is buying a house the biggest financial mistake you could make right now, and will the next Great Depression hit even harder? Morgan Housel reveals the real story. Morgan Housel, partner at Collaborative Fund and bestselling author of ‘The Psychology of Money’ and ‘Same As Ever’, is one of the world’s top experts on financial psychology, economic collapse warnings, and building true financial freedom. His life-changing insights have transformed how millions approach money, investing, and wealth-building. He explains: Why America’s economy could be quietly collapsing How devastating tariffs could trigger another Great Depression Why robots are replacing the middle class faster than ever The hidden $30 trillion debt threatening the future of the US Why buying a home right now could be a financial trap How to build true financial freedom even during turbulent times 00:00 Intro02:10 Timeless Lessons of Greed, Wealth, and Happiness04:51 The Current Tariff Situation in 202507:05 What Are Tariffs?11:51 Trump's True Reason for the Tariffs18:24 Why Is China the Factory of the World?20:35 China Stopped Being a Cheap Labour Country23:04 What's the Impact of the Tariffs?25:07 America's Trust26:42 Are We Heading for a Recession?29:30 The Importance of Backups During a Recession30:48 How to Be Financially Free in 202535:59 The Evolutionary Desire to Show Off — Status40:42 Salary Differences43:09 We Have a Distorted View of Financial Wealth44:28 Advice for the Economic Crisis45:55 How Much Money Do You Need Saved?46:56 The Impact of AI in Our Wealth Building56:22 The Skills You'll Need in the AI Era57:56 How to Have a Money Mindset01:00:56 Why People Get Stuck in Crypto Scams01:03:34 Women vs. Men: Who's Better at Saving and Taking Risks?01:06:15 Crypto01:07:23 What History Tells Us About New Technologies, Wealth, and Failure01:08:51 Could the Crypto Security System Be Broken?01:10:21 The Strategies Wealthy People Use01:11:55 Intelligence vs. Endurance01:13:28 Why Is Perseverance Key?01:15:12 The Best Way to Have a Big Investment Return01:17:01 The Power of Compounding in Your Savings01:22:06 How Money and Psychology Are Linked01:27:03 You Need to Change Your View on Savings01:31:10 Biggest Regrets of People on Their Deathbeds01:37:20 The Most Asked Questions About Finances01:41:17 Where Are Your Investments Allocated?01:42:03 Vanguard Index Fund01:49:54 Where to Invest Spare Cash?01:56:24 The Dangers of Retiring02:03:31 How to Live a Happy Life You can follow Morgan, here: Twitter - https://bit.ly/3RzBBSc Website - https://bit.ly/42LM4PD Instagram - https://bit.ly/449vnQp You can pre-order Morgan’s books, The Art of Spending Money: Simple Choices for a Richer Life, here: https://amzn.to/3GmHRu4 (US) / https://amzn.to/3EEy5mE (UK) You can find out more about the books mentioned, here: ‘The Intelligent Investor’, Benjamin Graham: https://amzn.to/4iwqHHW The 1% Diary is back – limited time only: https://bit.ly/1-Diary-Megaphone-ad-r… The Diary Of A CEO Conversation Cards (Second Edition): https://g2ul0.app.link/f31dsUttKKb Get email updates: https://bit.ly/diary-of-a-ceo-yt Think like a CEO – join the 100 CEOs newsletter: https://bit.ly/100-ceos-newsletter Follow Steven: https://g2ul0.app.link/gnGqL4IsKKb Sponsors: Get your hands on the Diary Of A CEO Conversation Cards here: https://bit.ly/conversationcards-mpPerfect Ted - https://www.perfectted.com with code DIARY40 for 40% off Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What major economic issues are discussed in this episode?
How important is this tariff situation?
It has the potential to be the biggest economic story of our lives. People are losing a lot of money on tariffs, and you're probably a matter of weeks away from empty shelves. And there's a button on the president's desk that says, end it right now.
So can you tell me what a tariff is?
I'll keep this very simple.
Chapter 2: How do tariffs affect the economy?
Morgan Housel is the money mindset guru.
Who's shaking up everything you think about wealth and how to achieve it.
I looked at the most Googled questions around money and one of the most popular is how to achieve freedom financially.
It is largely a mindset. You have an obligation to understand how money works and how to manage it. And it's one of many topics in which you're going to learn the best by experiencing the downside. It'll come back to that.
The next question is how to save money.
So most people view saving money as it's just wasted sitting there, but you need the cushion so that when the economy goes south and there is a recession, I want to have a level of control over my ability to support my family.
So how much money do you think it's sensible to have saved?
This is a bad answer that no one's going to like, but...
When you look at all these people through history that have generated great wealth, are there like certain strategies they've deployed?
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Chapter 3: Why is America struggling with manufacturing jobs?
Are we heading for a recession? Because I saw some stats earlier on that said the probability of a recession has surged by 45%, which is the highest since December 2023, because of the tariffs. That was from Reuters, right?
It's interesting when people point like the odds of recession at 45% because they can't be wrong. Like if there isn't a recession, they'd be like, yeah, we said it was 45%. We didn't say it was going to happen. So my answer if you said are we heading for a recession would always be yes. If you asked me a year ago, if you asked me five years ago, like historically there's a recession.
In modern times, it's been every four to five years that it's occurred. And so we shouldn't pretend that when they happen, that they're this crazy out of the blue thing. It's an inevitable feature that you're always going to have recessions. But is this going to cause it?
What is a recession?
A recession technically is when GDP in the economy, GDP is just like economic output, how much the economy is moving. when that declines for two quarters in a row. That's the technical definition. For most people, you don't need to worry about technical definitions because a recession in your mind is when you are feeling worse off economically for a long period of time.
When you feel like you can't get a job or your neighbors, your roommates can't get jobs and it's starting to hurt on you. It's kind of like, what's the definition of being sick? Well, it's when you don't feel good, but you can get more technical than that. But a recession for most people is when you don't feel good economically.
You're not concerned about a recession?
So it's not that I'm not concerned, but it would be like saying, if you live in Florida, are you concerned about hurricanes? The answer is yes, you should be concerned about hurricanes. But you also know with 100% certainty that they're going to come. If you choose to live in Florida and you live in Florida for 40 years, you know you're going to get hit by one, 100% chance.
And so it's not that I don't worry about it. It's that I think it is inevitable, always, no matter what's going on. This has nothing to do with tariffs. That's always been the case. And so this is where... At the individual level, personally, like room for error in your finances is so critical. What I mean by that is just like savings, cushion, being scared of debt.
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Chapter 4: What is the impact of AI on financial independence?
Chapter 5: How can individuals prepare for economic downturns?
Chapter 6: What mindset is necessary for financial freedom?
Chapter 7: How do gender differences affect financial behavior?
What about the impact it has on trust in the United States?
Yeah, it's huge. Can you explain that to me?
trust is hard because you don't know how valuable it is until you lose it but once you lose it you're like oh that was everything and you know foreign investors people who don't live in the united states have 30 trillion dollars invested in america that's just in stocks and bonds that's not housing or office buildings just in stocks and bonds 30 trillion dollars that they've invested and a lot of the reason they do that well there's many reasons
One of which is because it's by and large seen as a trustworthy economy, a stable economy, an economy of rules and predictable laws and trust that you could not say the same about Russia. And so when global investors are looking where to park their money, this has been the case for the last 80 years. America is usually at the top of that list.
There's also a thing where a lot of the reason that they invest money in the United States is because they have to, because they have a trade deficit with us. So if China is selling us a lot more stuff than they're buying from us, like we're importing a lot more from China than we're exporting back to them, they're going to end up with a lot of US dollars.
And they need to do something with those dollars. They have to invest them somewhere. And historically, that's been in treasury bonds, which lowered our interest rates. And that was good for everybody.
And what's a treasury bond?
It's debt that the government issues from the federal government. So it's a bond. You're loaning money to the government. And they're promising to repay you plus interest.
Okay. So less people are going to do that if they have less trust in the United States.
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Chapter 8: What lessons can we learn from historical financial figures?
Everyone's going to have to deal with these topics, whether they like it or not.
I love this quote from your book where you say, one of the most powerful ways to increase your savings isn't to raise your income, it's to raise your humility.
Yeah. I think you get there when you realize nobody's looking at you as much as you are, and nobody cares about your Range Rover and your Rolex as much as you did. They may have meant a lot to you, But no one else was thinking about them that much because they were busy thinking about themselves. They were busy thinking about their own car.
And you realize how much modern spending, and this has increased in the social media age the last 10 or 15 years, is trying to get strangers' attention. It's trying to put on a show, put on a performance for people that you think are paying attention to you, but they're absolutely not. They're not paying any attention to you whatsoever.
And so like lowering your, or like raising your humility is one way to think about it. But it's also just realizing like, who do you want attention from? It's different for everybody. For me, I want my wife, my kids, my parents, and like three friends to love me. And I desperately care about their attention. I desperately care what my kids and my wife and my parents think of me.
And it's fundamental to my happiness.
and from there it declines real quick you know there's a couple of really close friends who are in there and then there's some like colleagues and whatnot and it declines very quickly from there and strangers the person driving us could not care in the slightest and maybe that sounds obvious but so much of what we do with money is a performance to impress that guy who's not paying any attention to you whatsoever and so i want to put a lot of effort
into fostering the relationships with those six or seven people. I want to put tremendous effort into that and very little every from there. And here's the thing. If I got a Ferrari, would my wife love me more? No. Would my kids admire me more? No. And so the people who I want to love me are not impacted by the fancy things that I would buy.
So what do you spend your money on?
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