The Boring Road To Financial Success

What’s the real secret to financial success?

It’s an elusive question with a straightforward answer, but it’s not about intelligence or risk-taking.

Money isn't just math—it's wrapped in layers of fear, hope, pride, and regret. While we treat finance as a purely rational domain, our decisions about money are deeply psychological. This is the surprising premise of Morgan Housel's insightful book, “The Psychology of Money.”

Despite its weighty title, “The Psychology of Money" reads nicely and is peppered with interesting quotes from influential people from history. It’s also a focused book with a single premise that runs throughout.

“Getting rich” isn’t about being “smart,” it’s about being consistent and boring.

I’d like to lift three quotes from the book that really got me thinking.

“A genius is the man who can do the average thing when everyone else around him is losing his mind.”

—Napoleon

I imagine Napoleon was referring to waging war, but his quote applies surprisingly well to finance, too.

It’s about staying true to your plans in the face of adversity. Those plans should include regular (e.g., monthly) contributions toward savings or investment accounts.

However, it may be challenging to remain calm during tumultuous economic times. This understandable emotional response drives too many investors to sell out early, potentially wiping them out with each successive incident.

The true genius lies in turning off emotions and executing a plan. This approach averages out the market’s ups and downs. Over time, the power of compounding can transform steady consistency into above-average results.

Imagine you started investing 200 EUR monthly in January 2007 and have kept it up since (February 2025). You put your money in a broad market index fund tracking the S&P 500* and never missed a beat during three significant market downturns: the 50% drop during the 2008 global financial crisis, the COVID crash in 2020 (a 35% drop in a couple of weeks), and the inflation and interest rate crisis of 2022.

You contributed 40,800 EUR over these 17 years, but your investment account would actually be worth around 102,000 EUR! The major 2008, 2020, and 2022 downturns amplified your returns thanks to your consistency.

As you can see, it’s paramount to avoid unnecessarily interrupting your investment plans and let time work to your advantage.

“History never repeats itself; man always does.”

—Voltaire

“The fear of losing” drives us to repeat mistakes in finance. This includes emotional knee-jerk reactions, impulsive buying and selling, and copying finance influencers out of context.

Housel is a proponent of simple and dull financial instruments, and so am I.

Instead of trying to time the market or find undervalued unicorn stocks, he advises sticking with proven strategies that can easily be repeated without much effort.

An Exchange Traded Fund (ETF) is one such instrument. Think of an ETF as a basket of many different stocks—when the whole market grows, so does your investment.

ETFs are naturally diversified and low-cost—usually under 0.5%—because nobody actively manages them. This makes them a passive, repeatable instrument. In contrast, actively managed funds provided by big banks or investment firms often charge 2%. They constantly chase the next big thing yet rarely beat ETFs in the long run.

Coming out ahead means letting your investment actions repeat themselves rather than allowing the mistakes we always make to get in the way.

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

—Bill Gates

Cockiness. Arrogance. Complacency.

Thinking we can’t lose because we never have. We start making rash investment decisions or outlandish purchases. Why not? We can always make more money.

Housel argues that simply spending less is the fastest and most impactful way to increase wealth. He’s not talking about extreme frugality or denying yourself joy, however. Instead, it’s about identifying your personal definition of “enough” and eliminating mindless consumption that doesn’t align with your values.

The returns on reining in excessive spending vastly outpace any gains possible in the market, with a clear purpose.

Spending less yields more free cash that can be invested, increasing your compounding power, which leads to still more money.

Saving doesn’t require a specific goal—more money simply means more freedom and leverage in the future.

Conclusion

Financial success isn’t about being the smartest—it’s about being the most consistent. As The Psychology of Money teaches, sticking to simple strategies, resisting emotional reactions, and letting compounding work over time can turn “boring” into brilliant.

What's one consistent financial habit you could start today that your future self will thank you for?

*In the European market, consider the following ETF: “iShares Core S&P 500”. I invest in this one myself.