The Psychology of Money: A must read
Some books are good. Some are engaging to read. But there are few, that can stay with you even after putting them down.
Morgan Housel's The Psychology of Money is one such masterpiece released in 2020 and has been one of the most recommended books worldwide since then. With a total of 19 short chapters, the author beautifully explains why we do, what we do with money.
Money is one such thing that means different to different people. It can mean a day's meal to the poor while a matter of status quo to the rich. No two people can have the same expectations from their money so it is called Personal finance, where the word Personal comes before Finance. This book is not a typical finance book telling how to invest/multiply money but emphasizes more on relationships people have with their money. The more I go back to it I realize that money management is 1% talent and 99% handling emotions.
Every chapter is a gem in itself but some chapters can shake you in ways you never thought they could. Some of my favorite learnings from the book that changed a lot of my own perspective about money goes like this,
Nothing is free in this world, we should know what the price is. The real price of investing is not the money but how you can handle your emotions like fear, doubt, greed, and regret.
Money is so smart and powerful that it is never enough. The hardest financial skill is getting the goalpost to stop moving. It gets dangerous when the taste of having more money, more power, more prestige increases ambition faster than satisfaction.
Compounding is everything. Everyone wants to invest and become like Warren Buffet but, what they fail to notice is that he started investing at the age of 10 and $81.5 billion of his $84.5 billion net worth came after his 65th birthday.
Difference between getting wealthy and staying wealthy. Good investing is not necessarily about making good decisions but it's about consistently not screwing up.
You can be wrong half the time and still make fortune. Amazon or Warren Buffet did not make fortune in everything they did. It was only a small percentage of their actions that served them right.
We should be prepared for surprises and unknown events. We can plan everything for what we want life to be like but we should always be ready to accept the randomness and uncertainties that come along.
There are so many more beautiful learnings that I truly admire although, they didn't make it into the above list. To learn it for yourself, I suggest each one of you should own a copy of your own and make the most of it. Happy reading 😊