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Curation / Library / The Psychology of Money: Timeless lessons on wealth, greed, and happiness

Book cover for The Psychology of Money
Book cover for The Psychology of Money
Author: Morgan Housel
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First Read:
"Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics."

I finally read it. It was short and to the point. The examples were relevant and not too lingering.

Morgan writes 20 essays that are easily digestible and loosely related to one another.

  1. Everybody Acts in Ways That Feel Rational to Them
  2. Chance Plays a Bigger Role in Our Financial Lives Than We Give It Credit For
  3. You Can’t Rely on History to Predict the Future
  4. We Confuse Being Wealthy With Being Rich
  5. Money Buys Us Control Over Our Time
  6. Be Happy With Enough
  7. Status Symbols Don’t Buy Respect
  8. Take Advantage of Compounding
  9. Prioritize Saving Money
  10. Plan for Things to Go Wrong
  11. Expect Your Future Goals to Change
  12. Be Sensible, not Logical
  13. Develop a Survival Mentality
  14. Don’t Be Put Off by Uncertainty
  15. Don’t Be Put Off by Pessimism
  16. Even if You Fail Frequently, You Can Still Succeed
  17. Know Your Personal Financial Goals. They might be the same as others, especially if you’re following people who play the short game while you’re playing the long game.
  18. Be Careful What Stories You Believe About Money

I want to go back and put some more notes for each of these. For now, this should do as a mental reminder (probably less useful for readers).

Everybody Acts in Ways That Feel Rational to Them

It’s all about perspective. People different perspectives will look at money differently. The literacy of money changes generation from generation depending on how different factors play out like inflation unemployment. It’s not an intuitive thing to save for retirement as retirement as a concept has only been around for two generations.

Be Sensible, not Logical

He uses the words rational vs. reasonable

Morgan uses the example of buying a house. Mortgage rates were low, but he and his wife paid off the house. Yes, it could’ve been cheap to pay at such a low interest rate, but they were being reasonable since they could sleep at night knowing their house was paid off.

Previous Anti-library Entry

I’ve heard this book being recommended by multiple people, so maybe it’s worth taking a glance at it. People include Ali Abdaal. It has other advise on how to think about money. I’ve read in the past Money: Master the Game by Tony Robbins, and a lot of the book felt like a promotional talk. So going away from that, I’m hoping this advice is more down to earth and straight to the point.

Rank: A Tier