The Psychology of Money

Timeless lessons on wealth, greed, and happiness

by Morgan Housel

Number of pages: 256

Publisher: Harriman House

BBB Library: Booklets

ISBN: 978-0857197689

About the Author

Morgan Housel is a partner at The Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal.


Editorial Review

Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people.Money-investing, personal finance, and business decisions-is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together.

Book Reviews

Morgana market guy who understands the complex dynamism of trading/investing, who is obsessed with behavioural finance as the reasoning for market movements and/or business growth, who explains that our relationship with money is not science or math but dopamine and cortisol, it’s fear and greed, it’s pride and envy and social comparisons, or in short our relationship with money is actually psychological.

If you intend to get serious about investing money in 2021, Morgan Housel's highly acclaimed book thePsychology of Moneyis an excellent starting point. In 20 short and crisp chapters, the author left me reconsidering my financial choices and priorities.

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Wisdom to Share

Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.

Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.

Spending money to show people how much money you have is the fastest way to have less money.

Use money to gain control over your time, because not having control of your time is such a powerful and universal drag on happiness. The ability to do what you want, when you want, with who you want, for as long as you want to, pays the highest dividend that exists in finance.

Things that have never happened before happen all the time.

Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.

Napoleon’s definition of a military genius was, “The man who can do the average thing when all those around him are going crazy.

Controlling your time is the highest dividend money pays.

Be nicer and less flashy. No one is impressed with your possessions as much as you are. You might think you want a fancy car or a nice watch. But what you probably want is respect and admiration. And you’re more likely to gain those things through kindness and humility than horsepower and chrome.

Independence, to me, doesn’t mean you’ll stop working. It means you only do the work you like with people you like at the times you want for as long as you want.