
The Psychology of Money
by Morgan Housel (2020)
The Psychology of Money explores the strange ways people think about money and teaches you how to make better sense of one of life's most important topics. Morgan Housel shares 19 short stories exploring the ways people think about money.
Key Ideas from The Psychology of Money
No One's Crazy
Your personal experiences with money make up maybe 0.00000001% of what's happened in the world, but 80% of how you think the world works. Everyone has different money experiences shaping their beliefs.
Luck & Risk
Nothing is as good or as bad as it seems. Success and failure are often influenced by forces beyond your control, so judge people by their process, not their outcomes.
Never Enough
The hardest financial skill is getting the goalpost to stop moving. When rich people do crazy things, it's often because they never defined 'enough' for themselves.
Compounding
Warren Buffett's fortune isn't due to just being a good investor, but being a good investor since he was literally a child. Time is the most powerful force in investing.
Wealth vs Rich
Rich is current income. Wealth is income not spent. Wealth is hidden. Wealth is financial assets that haven't been converted into stuff you see.
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