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The Psychology of Money

The Psychology of Money

By Morgan Housel

Timeless Lessons on Wealth, Greed, and Happiness. Harriman House, 2020.

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19 mins read

16 Key insights

A brief summary of The Psychology of Money

A compilation of stories and advice about making money decisions, focusing on personal experience and behavior instead of mathematical numbers, and how thoughtful consideration can affect positive changes to investments and savings.

Key insights in The Psychology of Money

1
What do you get from this book? Lessons on human behavior that help you save more money than you lose
2
You don’t need fancy degrees to build wealth, all you need is time, patience, and the right mindset
3
America’s past has defined how its consumers think about money today
4
Although our spending habits are dictated by personal experience, luck can influence the outcome
5
Once you start accumulating wealth it can be hard to stop, just remember to balance money with personal values
6
It’s easy to lose money and hard to keep it, but diversification helps you survive failure
7
Having control over your own life will always be more valuable than money
8
The way to accumulate money is to make thoughtful purchases and save the rest
9
Making reasonable decisions about money will help you prepare for surprise events
10
Don’t fall into the illusion that your finances won’t change, create a safety net for yourself
11
Invest knowing that short-term losses are normal, it’s the long-term gains that garner the biggest rewards
12
People are inherently pessimistic, and we often make up stories to help us feel better about our situation
13
Follow the financial plan best suited to your needs, and don’t worry about what other people are doing
14
Summary of the key insights
15
Selected critiques in brief
16
Final word

Who should read The Psychology of Money

Anyone looking to change their financial situation • blue-collar workers • recent college graduates • people on a budget • those who want to grow their bank account

About the author of The Psychology of Money

Morgan Housel is a financial investor, advisor, and writer, and a partner at the venture capital firm Collaborative Fund. He is a former columnist at the Wall Street Journal and The Motley Fool, where he also served as senior analyst. In 2022, Housel was named one of the “50 most influential people in markets” by MarketWatch.

author avatar

Morgan Housel

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