Decoding the Future: Insights from Morgan Housel on Demographics, Wealth, and Human Behaviour
Michael Yardney
I bring investors clarity in the chaos of all the mixed messages, sharing my 50 yrs perspective. Voted in the top 50 Influential Australian Thought Leaders. Host of the Michael Yardney & the Demographics Decoded Podcasts
In today’s fast-paced financial landscape, the intersection of psychology, demographics, and economics is more crucial than ever to understand.
Morgan Housel, renowned for his deep reflections on human behaviour and finance, offers insights that can reshape how we think about wealth creation, investing, and the world at large.
From understanding the role our personal experiences play in our decisions to navigating future uncertainty, Housel's wisdom has plenty to offer investors, policymakers, and anyone looking to make smarter, long-term decisions.
In a recent episode of my Demographics Decoded podcast with leading demographer Simon Kuestenmacher, we explored some of Housel’s ideas and delved into his reflections on wealth, demographic trends, and the broader forces shaping our future.
So let's look at some key lessons and how they apply to the world of property investment and finances in Australia.
For weekly insights and strategic advice, subscribe to the Demographics Decoded podcast, where we will continue to explore these trends and their implications in greater detail.
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Your experience is limited, but it shapes everything
One of Housel’s most thought-provoking ideas is that your personal experience makes up only 0.00001% of what happens in the world, but it influences 80% of how you see things.
This notion is important when we look at how different generations make financial decisions.
Our experiences—whether they are shaped by the global financial crisis, housing market booms, or recessions—become the lenses through which we interpret the world.
For Baby Boomers, shaped by post-war austerity and a burgeoning economy, property ownership and material wealth often represent security and success.
They saw their homes appreciate in value significantly over the decades, embedding the belief that property investment is the cornerstone of wealth creation.
On the other hand, Millennials—who entered adulthood during or after the global financial crisis—tend to view the world through a very different lens.
To them, housing affordability issues and the desire for lifestyle flexibility have led to a focus on experiences over possessions.
This shift is not a matter of one generation being right or wrong.
It’s about understanding that different experiences shape different priorities.
For property investors, this means we need to look beyond our own biases and consider the broader demographic shifts.
Younger generations may not approach property ownership with the same urgency as their parents, but that doesn’t mean they won’t eventually buy their own home or invest in property—it just means they may prioritise lifestyle locations or investment properties over the traditional family home.
Cognitive bias and the emotional side of money
Housel’s work also highlights how irrational many of our financial decisions can be.
Money decisions aren’t made in spreadsheets—they’re made at dinner tables, he explains, shaped by emotions, pride, ego, and even societal pressures.
The influence of marketing, social media, and what we perceive others are doing often drives financial behaviour more than rational analysis.
In the property market, we see this play out time and again.
Investors can fall into cognitive traps, like anchoring their expectations on past performance or being overly influenced by short-term market noise.
Others may fear missing out during a boom, leading them to make hasty, emotion-driven decisions without proper due diligence.
One way to counter this is by creating systems that remove emotion from decision-making.
Just as athletes rely on routines to maintain peak performance, investors need money and financial habits that are based on clear, long-term goals.
Establishing a disciplined property investment strategy, where decisions are based on data and long-term trends rather than market hype, can help mitigate the emotional pitfalls that many fall into.
Learning from history without being trapped by it
While history offers valuable lessons, Housel warns against using it as a roadmap for the future.
He argues that history can be a misleading guide, especially when it comes to predicting unprecedented events.
The COVID-19 pandemic is a perfect example—while many believed we were living in predictable times, this global event upended industries, economies, and personal lives in ways no one foresaw.
For property investors, this highlights the importance of adaptability.
History may tell us that property values tend to rise over the long term, but unprecedented events—like technological advancements, government policy shifts, or even changes in migration patterns—can alter that trajectory.
We’re already seeing the beginnings of such shifts with artificial intelligence (AI) and automation, which have the potential to reshape the workforce and the demand for certain types of properties.
In the same way, demographic changes like Australia’s aging population will impact the property market.
We know that an older population may require more downsized homes, retirement living, and aged care facilities, but exactly how these trends will play out is hard to predict with precision.
Investors who remain flexible, keeping an eye on structural changes, will be better equipped to make savvy decisions in the face of uncertainty.
Progress happens slowly, but setbacks are immediate
One of Housel’s most memorable quotes is that progress happens too slowly to notice, but setbacks happen too quickly to ignore.
This captures a fundamental truth about investing.
Building wealth through property is often a slow, steady process.
You don’t notice the incremental growth of capital gains or rental income daily, but over time, these gains compound into significant wealth.
However, market corrections, interest rate hikes, or regulatory changes can feel like sudden shocks that demand immediate attention.
The recent sharp rise in interest rates, for example, caught many investors off guard, leading to a rush to refinance and some even panic selling.
But those with a long-term view, who have factored in the possibility of rate rises and market corrections, and had a financial buffer in place to see them through the market ups and downs, were more likely to weather these short-term setbacks.
This principle also applies to Australia’s demographic shifts.
The aging population and the gradual slowing of population growth won’t create immediate market shocks, but over time, they will fundamentally alter the property landscape.
Investors who ignore these long-term trends may find themselves caught out, while those who prepare for the future can seize new opportunities as they arise.
True wealth: it’s more than just money
Housel also reminds us of an often-overlooked truth: no one is impressed with your possessions as much as you are.
Many people seek wealth not just for financial security but for social status. We buy expensive cars or designer clothes, hoping it will earn us admiration.
But as Housel points out, most people don’t care about your material wealth as much as you do.
What they really value is your generosity, your kindness, and the time you spend with them.
For those of us interested in wealth creation, it’s a reminder that true wealth is more than just a big bank balance.
As I often say, money is important in the areas of life where money matters—like paying for your children’s education or securing your retirement—but money is not important in other areas of your life where it is not important, such as freedom, health, and relationships.
At Metropole, we’ve long believed that financial wealth is just one part of a fulfilling life.
Having the money to buy experiences, to give back to the community, to grow personally and spiritually—these are the markers of true wealth.
That’s why, for property investors, it’s important to balance the pursuit of financial success with personal fulfilment.
Achieving your financial goals won’t matter much if you don’t have the health, relationships, or sense of purpose to enjoy it.
Preparing for the future
Housel’s final piece of advice Simon and I discussed in this episode of Demographics Decoded is about preparing for what we can’t predict.
The most important economic events of the future are the ones we can’t see coming, he says.
While it’s impossible to plan for every black swan event, we can build resilience into our financial lives by maintaining flexibility and avoiding overconfidence.
For property investors, this means diversifying your portfolio, keeping your financial buffers intact, and being ready to pivot when necessary.
It also means being aware that the landscape is constantly changing—whether it’s new technology, demographic shifts, or policy changes—and staying informed is key to staying ahead.
In my experience, those who succeed in the long run are those who take a proactive approach.
They don’t try to predict the future with precision, but they do prepare for different scenarios, understanding that flexibility is one of the most valuable assets in an unpredictable world.
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