The Psychology of Money
by: Morgan Housel
Central Theme:
Being successful economically is less about technical knowledge and more about behavioral wisdom.
Recommendation:
Through 19 short stories, Morgan Housel, examines the many ways people’s perspectives, attitudes, and behaviors affect their relationship with money, the outcomes of each situation, and practical lessons the reader can digest and apply in their personal life.
Summary:
Housel’s blog post-turned-book is a quick yet fascinating read that explores human thinking and psychology when it comes to personal finance, investing and business. People approach circumstances from their own perspectives bringing in years of beliefs, assumptions, and personal experiences that influence financial behaviors. Therefore, Housel describes, nobody is truly crazy when it comes to financial decisions, even if the outcomes of such decisions are disastrous. When exploring concepts such as luck, risk, and the power of compounding, Housel explains that true financial success almost always comes down to patience, persistence, and discipline. Wealth, he states, is what is not readily seen. These, among many others, are some of the timeless lessons the book covers.
