The Psychology of Money by Morgan Housel
Spoiler-Free Synopsis:
The Psychology of Money presents a variety of comments on financial perspectives held by multiple people, and how those are influenced by economic and situational circumstances. He provides psychological insight into the decisions that people make, and includes relevant historical examples of what well-known names have done in order to succeed or sometimes to fail in their investing and financial goals. He centers on the idea that we must make reasonable decisions, not necessarily coldly rational ones, when it comes to money. While he doesn’t directly advise readers on any certain path, he give some foundational tools to help readers discern their own psychology around money.
Spoiler-Free Review:
I am absolutely pleased with this decision for my first book in the finance realm. I found it very interesting and accessible, and while I wouldn’t say that it provided me with a necessarily applicable education, it presented interesting thoughts for discussion and contemplation, and sparked in me a newfound interest in financial literacy and investing. I am curious to read a few more books in this genre and see how they differentiate. This didn’t serve as a guide of any sort, moreso a commentary. I appreciated but would also love to read books that might teach me a bit more!
Tabbed Quotes:
“What you’ve experienced is more compelling than what you learn second-hand” (11)
“Since it’s hard to quantify luck and rude to suggest people’s success is owed to it, the default stance is often to implicitly ignore luck as a factor of success” (28)
“It gets dangerous when the taste of having more increases ambition faster than satisfaction” (41)
“Having a strong sense of controlling one’s life is a more dependable predictor of positive feelings of wellbeing than any of the objective conditions of life we have considered” (84)
"Your kids don’t want your money (or what your money buys) anywhere near as much as they want you. Specifically, they want you with them” (89)
“‘The four most dangerous words in investing are, ‘it’s different this time’” — John Templeton
“The twelve most dangerous words in investing are, ‘The four most dangerous words in investing are, ‘it’s different this time’” — Michael Batnick
“I am just as susceptible to explaining the world through the limited set of mental models I have at my disposal” (198)
“Being able to wake up one morning and change what you’re doing, on your own terms, whenever you’re ready, seems like the grandmother of all financial goals” (215)
