The Pyschology of Money

 Name of the Book: - The Psychology of Money

Author: - Morgan Housel

Name of the Book: - The Psychology of Money

Author: - Morgan Housel

No of Chapters: -20

Number of Pages: - 241

Single sentence description of Book: - Excellent insights on Wealth, Happiness and Greed

What this book is about: - Book is an excellent collection of thoughts on various topics pertaining to psychology of Wealth creation, Greed and Happiness. The book explains the concept that real wealth is not the one that is displayed in public; instead it is the one that is not displayed. The book beautifully explains the concept of compounding by citing the example of legendary investor Warren Buffet. It explains that wealth creation is more about psychology and discipline rather than having an excellent knowledge of financial jargons. He explained the fact that an average person can generate good amount of wealth over a period of time by sticking to the discipline of savings. He explained that copying someone else success may not bring success to a you; as he may be playing a different game altogether. He provided an insight on investment that Investors needs not to be correct all the time and still can generate fortune. He elaborated upon the importance of room of error in every investment and explained how big shots in the investment had failed due to non-inclusion of this concept in their investment philosophy. Long term planning is harder than it seems as the goals and thoughts of people keep on changing over a period of time. Author elaborated the concept that there are many things that are never worth risking no matter how much is potential gain.

  Few Special thoughts by the Author: -

1.     Never unnecessarily disturb the money put in investment, as it reduces the amount and chances of wealth creation.

2.   Nothing is free in this world, everything comes with a price. For every good investment, there will be some bad investments also.

3.   Never try to copy the big investors buying some stock because their time horizon and conditions of investment will always be different from yours.

4.   Saving money is very much important and everyone does not need a specific reason to save.

5.   Spending money to show people how much money you have is the fastest way to have less money.

6.  The ultimate required outcomes of wealth creation is to have control over your time and options.

 7.   Pessimision, markets crash, wars and other disasters are always played on top by media and affect the mind-set of common people more than the growth and advancement achieved by human race over a period of time.

8.   Staying Wealthy requires sticking around your good investments for long enough to allow compounding to do wonder.

9.  Manage your investments and money in such a way that it helps you sleep at night 

Overall Review: - Book is an excellent compilation of various thoughts involved in the psychology of investment, wealth generation and greed. It dispels the notion of having good financial knowledge to be a successful investor. It explores the thoughts and mind-set of people behind every investment decision. Overall it is an excellent read. 

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