For years Morgan Housel has been sharing his knowledge via his blogs that he gained working as a Senior Analyst for Motley Fool One from 2013–2016 and a Wall Street Journal Contributor from 2014–2015, post which he began as a Partner in the Collaborative Fund in 2016, which he continues to this day. He more recently became a board member at Markel in 2021, which he also continues today.
Eventually, he decided to create a collection of all his blogs and more, this is how "Psychology of Money" was born.
My top 3 takeaways
Behaviour over intelligence for financial success
The importance of Long-term thinking and success
Simplicity & consistency beats complexity
What I learnt
- No one is crazy
Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.
Other people's financial decisions might seem irrational to us, but they make perfect sense to the person making them. It indicates how people’s unique backgrounds and experiences shape their financial behaviour.
- Understanding Compounding
Staying invested over time and allowing your investments to grow without frequent changes or attempts to time the market is crucial.
Happiness & Freedom
Money should be viewed as a tool for freedom and security rather than a source of happiness. Contentment with what you have is a key to financial peace.
Wealth is what you don't see
True wealth is often hidden from view. People can appear wealthy but be financially insecure, and vice versa. Spending money to show people how much money you have is the fastest way to have less money.
Never-ending desires
Living below your means and avoiding lifestyle inflation are foundational to building wealth. Contentment in of itself is a form of wealth.
Favourite Quotes
The hardest financial skill is getting the goalpost to stop moving.
The hardest financial skill is getting the goalpost to stop moving.
The freedom to do what you want, when you want, with who you want, for as long as you want, is priceless.
Wealth is largely invisible. It’s the money not spent.
Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.
Who should read this?
This should be read by everyone, especially by people who are still young, as understanding the pitfalls of our behaviour concerning money will reap extraordinary rewards as young adults still have a whole life ahead of them for compounding the work its magic.
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