Book Information

Author: Morgan Housel

Title: The Psychology of Money: Timeless lessons on wealth, greed, and happiness

Published Year: 2020

Notes

• Find humility when things are going right and compassion when they go wrong.
• Less ego, more wealth. Stop buying stuff you don't need today in order to have more stuff or more options in the future.
• Manage your money in a way that helps you sleep at night.
• Time is your friend. It makes little things grow big and big mistakes fade away. Invest early and long.
• Be comfortable with a lot of stuff not working. Measure your full portfolio, rather than individual investments. It is fine to have large chunk of poor investements and a few outstanding ones. You can be wrong half the time and still make a fortune.
• Use money to gain control over time. Having control over time will bring more happiness.
• Be nicer and less flashy. No one is impressed with your possesions as much as you are.
• Save. Just save. You don't need a specific reason to save.
• Define the cost of success and be ready to pay it.
• Don't aim to be super rational. Just be reasonable. We don't like to think harder than we need to, and we have unceasing demands on our attention.
• Make room for error. Shit happens in real life. So make a plan that prepare you when such plan not going according to plan.
• The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.
• Avoid the extreme ends of financial decisions.
• Be comfortable with risk. Be paranoid of ruinous risk, because it prevents you from taking future risks.
• Define the game you're playing, and make sure your actions are not being influenced by people playing a different game.
• Respect the mess. There is no single right answer; just the answer that works for you.