No doubt about it this week, which is why we are diving in to learn some of the top lessons of The Psychology of Money, the bestselling book by Morgan Housel. I have always been curious to find out how I can change my mindset around money, and explore the connection between money and mental health, so when I heard of the book, The Psychology of Money, by Morgan Housel, I gushed over it.
In Morgan Housels book, Morgan Housels shares 19 stories exploring these concepts, so we can become more aware of what is driving us, and reverse course if we so choose. Rather, Morgan Housels book is about our emotional biases, and the psychology that underlies how we think about money and the financial decisions that we make. Morgan Housel says we think and are taught money in ways that are too similar to physics (with rules and laws) and not enough similar to psychology (with emotions and nuance).
Morgans framing of saving money in the book is incredibly empowering and optimistic. One of my favourite parts in the book is when Morgan Housls writes about how being smart about money is far more powerful than being reasonable. In the book, Housel shares stories about greed and risk, how it can flip progress around and become a recipe for failure for any kind of success, and notes that finding out what is “enough” is enough for you is essential in managing your money and investments. While it is not a technical investment resource, Morgan Housels book is chock-full of life lessons and quote-worthy quotes.
The book is short and easy to read, structured around 19 short stories that breakdown the psychology of why people spend, save, and invest in different ways. It is an incredible read, outlining the importance, structure, and impact of the oft-overlooked role that human psychology plays in investment patterns and the way we engage with money.
Reading The Psychology of Money will open your mind up to new perspectives and make you do some self-reflection to realise just how biased you have been the whole time. Once you have the basics covered about personal finance and are on your way to firing up the Fire, The Psychology of Money is a perfect book to read. While The Psychology of Money might not put you at ease, it certainly gives you a number of areas that you can improve in order to make immediate changes to your financial life. If you think that you are making all the wrong financial decisions, or if wealth is simply not something that you can ever attain, The Psychology of Money is the book for you.
The book explains how human emotions are a major driver behind financial decisions, and how that bleeds over into the macro picture. The uniqueness of this financial book is also the way in which it reveals deeper insights about wealth, greed, and happiness. In fact, much of its book is an attempt to persuade you that the way you act is far more important than the things you learn about money. Morgan Housley believes we all have different views about how money works, depending on our own unique circumstances, upbringing, goals, beliefs, and personal experiences.
Listen to the book: KUKU FM