The Psychology of Money: Book Review #1📕
Learn about the emotions guiding wealth creation in an unconventional yet appealing way.
Hello, and welcome to Reflections. I'm Sanuj, a physician. I write insightful posts about health, wealth, family and other interesting topics. If you're new here, you can learn more about Reflections in the about page. If you would like to read more, hit the subscribe button below to catch my weekly posts and join a growing list of readers around the globe.
My review
Unlike traditional finance books that focus heavily on numbers and technicalities, The Psychology of Money delves into the more abstract and often overlooked psychological factors influencing how we manage money. Morgan Housel shares these aspects through real life stories and mock scenarios on how emotions affect us at the time of financial decision making. It is a compelling exploration of the human behaviors and psychological nuances that underpin financial decisions. Housel encourages us to continue to save and invest, keeping greed and fear aside. These savings, will eventually provide us with freedom to do the things we want when we want to do them. He goes on to add that risks, including chance events that shape the economy, are inevitable, but it is a small price to pay for a better financial reward if we wait patiently for it.
The Psychology of Money does not compel to resort to a particular financial strategy. Instead Morgan Housel counsels us to be prudent and be aware of our emotions while making money. He reminds us that personal finance is not just about creating wealth but also preserving it. The author sticks to a presentation that is simple, easy to grasp and relatable.
Top Quotes from the Book
No one is impressed with your possessions as much as you are.
Spending money to show people how much money you have is the fastest way to have less money.
The most important part of every plan is planning on your plan not going according to plan.
Beware taking financial cues from people playing a different game than you are.
You don’t need a specific reason to save.
Who is it for?
The Psychology of Money is a must read for teenagers to learn about the nuances of wealth creation, to avoid herd mentality and to understand that making money is a long and boring game. The book also equally applies to young adults who are just beginning to earn and build wealth. It makes us realise how various human emotions guide decisions on acquisition of monetary and non monetary assets.
Those in their late thirties and early forties might also find the book helpful. Beyond that age group the advantage of time for building wealth takes a downward trend.
My Rating and Recommendation
5 stars for the clarity, simplicity and approach Morgan Housel has utilized to generate awareness, bust myths and remain patient to generate wealth in the long run.
A must read.
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A great review - one of those that I refer to often.
Upgrade to paid for me Sanuj! Great information here! I’m editing this, because clicked upgrade and usually my payment information is pre filled in, but this time it was blank. So I will have to upgrade it tomorrow when I can get out my credit card!