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The Psychology of Money

4.38  ·  Rating details ·  30,916 ratings  ·  3,140 reviews
Timeless lessons on wealth, greed, and happiness doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people. How to manage money, invest it, and make business decisions are typically considered to involve a lot of mathematical calculations, where data and formulae tell us exactly what t ...more
Paperback, 1st, 252 pages
Published September 8th 2020 by Harriman House (first published 2020)
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Mayur Mathur Even though Rich Dad Poor Dad , I read before Psychology of Money, however, having gone from being wealthy to broke myself, I feel the Psychology of M…moreEven though Rich Dad Poor Dad , I read before Psychology of Money, however, having gone from being wealthy to broke myself, I feel the Psychology of Money is more relevant. It is an excellent read and talks about the mindset that you need to have as far as Money is concerned. The rules that Rich Dad highlights though relevant may not be applicable across various countries though this is a very insightful book. (less)

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Average rating 4.38  · 
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Riku Sayuj
Dec 30, 2020 rated it really liked it
Pithy book. Here's some for you:


1. People act from their experiences. Don't judge from yours.



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2. Luck & Risk is all around you. They don't fit the stories you want to tell.





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3. If you can't recognize when you have enough, you will soon have nothing.





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4. Warren Buffet could have been an ordinary investor if not for his longevity.
Investing - if done well - is utterly boring.
It’s because the chief ingredient in the growth of a portfolio is time.





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5. More than big returns, be finan

...more
Jacob
Sep 08, 2020 rated it really liked it  ·  review of another edition
This was a short but enjoyable read. The main point is that we are complicated creatures who have complicated relationships with money. It’s ok and expected to not base every decision off of cold Excel calculations. instead of pretending we will, here is some of the advice he recommends:

Don’t try and time the market. Dollar cost average. 85% of large cap fund managers did not beat the S&P 500. Stock picking isn’t the worst thing ever but know the odds are not in your favor. Doing some of that is
...more
Sanford Chee
Sep 13, 2020 rated it really liked it
The blog post that turned into a book
http://www.collaborativefund.com/blog...

Teh Hooi Ling’s review
https://www.businesstimes.com.sg/weal...

CFA webinar
https://annual.cfainstitute.org/speak...

https://blogs.cfainstitute.org/invest...

The hardest financial skill is getting the goalpost to stop moving.
Lesson from Rajat Gupta of McK.
https://www.ft.com/content/bb5fb31c-4...

Freedom with your own time is the highest dividend money pays. The ability to do whatever you desire with your time. The ability to
...more
Sumirti Singaravel
2020 is one of those years where I took my personal finance management seriously not only because I turned 30 but I also became very aware of all the financial options available for investment and the great necessity for a woman, especially a married one, to be financially literate and independent.

The Psychology of Money is one of the those books that lays the fundamentals required for investment and saving your money without pushing and punishing with a lot of jargons, technical terms, and
...more
Manoj Arora
Dec 17, 2020 rated it it was amazing
I, hereby, list down 43 fabulous financial lessons from this awesome book.

1/ Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.

2/ Financial success, to an extent, is driven by luck irrespective of intelligence and effort

3/ Financial success is not hard science, unlike engineering or doctorate or any other profession. It is a soft skill, where how you behave is far more important than
...more
Arunothia Marappan
Jan 31, 2021 rated it it was amazing
An excellent book that covers how to think about one's money and wealth. Titles of the 20 pointers the author enlists in this book -

(1) No one's 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.
(2) Luck and Risk : Nothing is as good or as bad as it seems.
(3) Never enough : When rich people do crazy things.
(4) Confounding Compounding : $81.5 billion of Warren Buffet's $84.5 billion net worth cam
...more
Ammit P Chawda
Jul 27, 2021 rated it it was amazing  ·  review of another edition
4.75 ⭐

I haven't been a regular reader so far but I always had a craving and attraction to books,this book was suggested to me by my good old friend Mr. Aditya Salvi owing to my recklessness with finances 😂 However this book did help me reinvent my intrest for reading not to forget to mention this was the 11th book I have read so far and started reading this book in May 2021.This book also brought within me a craving for Non Fiction Philosophy Literature.

About the book:-
Well most importantly this
...more
Яш
Sep 17, 2018 rated it it was amazing
Something to be read every year.
Harsha Varma
Sep 18, 2020 rated it really liked it
Such a short book with so much wisdom and generally good advice. Highly recommended.

On a side note, this book also made me realise that Hans Rosling’s Factfulness has such great advice on investing. We often get bogged down on what’s happening in the short run and do not appreciate the progress we’ve made in the long run. Progress happens too slowly to notice, but setbacks happen too quickly to ignore. And thus, in life and investing, optimism trumps pessimism in the long run.

Quotes:
1. The high
...more
Bradley
Sep 27, 2021 rated it it was amazing
This is very good mostly because it's very simple. Twenty common-sense ideas that are so absurdly obvious if you think about but are hardly ever engaged with, seriously, basically account for all successes and failures when it comes to money.

The more obvious points:

Professional traders are about as good at it as random non-professional investors.
Compound interest is an ungodly cheat mode.
Getting your head on right is much more important than anything else you could do.
Prepare for the idea that
...more
Milan
Sep 28, 2020 rated it it was amazing  ·  review of another edition
When your favorite financial writer comes out with a book, its okay to drop everything to read it. I've been a fan of Morgan Housel's writing for many years. The idea for the book 'The Psychology of Money' came from his long article by the same name. He likes to keep his writing concise but it packs a punch. The best part of his writing is that he takes the lessons from history, finance, psychology, etc. and applies it to everyday personal finance. He has this uncanny ability to look at somethin ...more
Tanu
"The hardest financial skill is getting the goalpost to stop moving.

It's a Timeless Lessons on Wealth, Greed, and Happiness by award-winning author Morgan Housel, one of the best books on personal finance. Neat and crisply written – this book offers a lot of wisdom and high-quality content.

In this book, Morgan Housel shares 19 stories exploring the strange ways people think about money. It covers observations on our relationship with money and tells us how our thinking towards finances driv
...more
The  Conch
Mar 20, 2021 rated it really liked it  ·  review of another edition
Shelves: economics
The essence of the book is:

1. Fall in love for saving. Don't ask why or for what is the purpose. Life is full of bouncers, so only saving can help you.
2. Don't believe all financial forecast
3, Always cut your coat in less than the clothes. Extra portion throw into few index funds.
4. Move toward - "that lets you do what you want, when you want, with who you want, where you want, for as long as you want" - This is financial freedom.

One may read chapter 19 and 20 to know what the book is all about.
...more
Simon Eskildsen
Apr 01, 2021 rated it it was amazing
I've read Housel's content for years and years. I can't recommend this book and its absurd density of insight enough. Don't let the title fool you: this book is just as much about designing a good life. For example, that a nice new car impresses yourself more than anyone else. On one of the first pages Morgan writes that "financial success is a soft skill, not a hard skill." That about sets the stage. ...more
Jashan Singhal
DISCLAIMER: If you are looking for a book that would give you "tips" on investing or trading, don't pick this one up.

First thoughts - A super easy and fun read, but it was a little different than what I had expected. Just going by the title of the book, I had anticipated that the author would probably take a deep dive into the behavioral economics and decision analysis of all aspects of money in our life but it turned out to be a rudimentary take (albeit an insightful one) on these topics.

This b
...more
Prem
Feb 06, 2021 rated it really liked it
Being able to wake up one morning and change what you’re doing, on your own terms, whenever you’re ready, seems like the grandmother of all financial goals.
Ravi Gangwani
Apr 20, 2021 rated it it was amazing
Shelves: favorites, nonfiction
29 April 2021: Last weekend I thought to do something creative in lockdown. I connected online with some kids in locality and we brainstormed on every chapter of this book ... In 2 days we made a basic animation video less than of 10 minutes to cover the essence of whole book ...

Link : https://youtu.be/Ja7lQaCna0w

It was fun and more than that all the ideas came from kids who are from lower middle class background of India with no idea of life hovering ahead. Wish to perform more stuff like this
...more
Barun Patra
Feb 11, 2021 rated it it was amazing
"No matter how we save or invest I’m sure we’ll always have the goal of independence, and we’ll always do whatever maximises for sleeping well at night."

I think this is a good financial goal to set up. At least this works for me. I have been recommending "Let's talk Money" to a lot of my friends. Now I have two books to recommend. There are some really valuable lessons that this book opened my mind to. Simple yet quite valuable. Moreover, the book is not just about financial learnings but is fil
...more
Shraddha Agrawal
Jan 10, 2021 rated it it was amazing
I picked up this book as a fresh graduate, high on my first few earnings, thinking it might give me insight about how, where and why to manage and invest my money knowledgeably. As I read this book, I was shocked, as you can imagine, when the author presented instances after instances of how experienced investors made poor money decisions one after the other, highlighting the fact that those decisions weren't isolated incidences stemming from a sole, particularly bad investor.

Rather the only wa
...more
Dao Le
Oct 25, 2020 rated it liked it
I honestly don’t get the hype for this book - most of the ideas are not particularly insightful nor original. The most interesting ones came from Nassim Taleb (i.e., tail risks, role of luck & risk), Charlie Munger (i.e., compounding, savings) and Benjamin Graham (i.e., margin of safety). While the advices are no doubt helpful (but common sensical) like don’t keep of with the Joneses, save, invest in low-cost index funds, etc. and written in a easy-to-follow way (albiet too LinkedIn-esque for my ...more
Manu
Jan 02, 2021 rated it it was amazing  ·  review of another edition
Shelves: review
My job is at the intersection of marketing and personal finance, and that's the reason why I appreciate this book even more. It is a difficult subject to communicate, but a job that needs to be done. What makes this book really good is that it views money not (only) through the technical lens, or the "get rich" advice, but explores the emotional aspects of personal finance, and then articulates in a way that is relatable. I might be a little biased because I subscribe to the author's worldview, ...more
Himanshu
Sep 30, 2020 rated it really liked it
Shelves: finance, life, investing
With a title as clickbaity as this and an author with such impressive credentials, anticipation for this book was sky-high. In fact, this book was on my to-read list from the time Morgan had announced it on Social media. I admire Morgan, his tweets and the work he is doing to educate normal people on financial matters . And all this while being a partner at a fund house ( talk about managing conflicts of interests in a honest way).

So now coming back to the book after the digression . The book is
...more
yamika
Jul 23, 2021 rated it liked it
An interesting book. It offers new perspectives on things.

We all have a different outlook on life, because we all have led different lives. Different life experiences lead to different sets of views. Something that one side finds obvious is not very obvious to the other side. People don't always make financial decisions logically. Their personal history, view of the world, ego, incentives are all a part of their narrative.

So it's hard for many of us to intuitively grasp the subconscious reasoni
...more
Sandeep
Oct 14, 2020 rated it it was amazing
If you've read quite a bit on a topic, a lot of what's talked about in a book usually becomes predictable. An artist, however, can surprise you. This unpredictability is the source of novelty. Morgan is one such smooth writer who manages to surprise you no matter how much you've read about such topics. This book deals with ideas that are truly 'timeless'. It doesn't preach. It just gives you a bunch of ideas to ponder and think about. That's what good books are supposed to be about i guess. ...more
Nopadol Rompho
Sep 29, 2020 rated it it was amazing  ·  review of another edition
I really love this book. It's not just about the money management but it is more deeply into the psychology. You can't just use other people's method, you need to know that we are different. Strongly recommended. ...more
Ruchi Das
Jun 21, 2021 rated it it was amazing
I don't read a lot of self-help books related to finance or money management. But with this one, it's as if I hit the jackpot.

Finance columnist Morgan Housel's The Psychology of Money is a mindblowing introduction to the ABCs of money management. As opposed to the popular idea, numbers on spreadsheets don't determine financial decisions. A person's psychology does. That's why, with some rational thinking, you could set yourself on the path of raking in handsome rewards with your investments.

You
...more
Divya Mangotra
Jan 29, 2021 rated it it was amazing
It is one of those books that everybody should read. This book is full of not just money but a lot of life lessons too. Reading it once is not enough, and it will give you a new perspective every time you re-read it. I highly recommend it if you are thinking about dipping your toes into the World of Finance or already know a lot about it.

What to expect?
This book won't help you understand where/how to invest, but it will help you build a wealth mindset. It will also give you a lot of perspectiv
...more
Krutika Kalkal
Feb 04, 2021 rated it it was amazing
I have always been wary of stocks. Housel tells me that it may be due to the things I saw growing up - we did not have enough to be able to start taking risks we did not feel confident about.

I was fed up of all the books on investment and personal finance (as a starting point) because they did not provide me with anything I could start with without feeling scared about losing money. "Psychology of Money" is *not* one of those books. It tries to understand how people view money and what feelings
...more
Gabrielė Bužinskaitė
Dec 24, 2020 rated it it was amazing
“Saving is the gap between your ego and your income.”

It gives me joy to find books like this one. Author is devoted to teach us about the world and ourselves first to understand our relationship with money and certain decisions we make.

He tells real, memorable stories, which makes this book so interesting to read. Why would a man who made a huge fortune during the crash of markets in Great Depression kill himself not so much later? Where did 16 million American soldiers go after the WW2 when fa
...more
Vivek Vikram Singh
A 3.5 rounded down to 3, because although many more people need to read this book - purely objectively and on personal impact on me this reads much more like a long article than a book. A decade earlier this would be rounded upto 4.

Personal finance is far too ignored by people and more needs to be read and written about it. The principles espoused in this book are largely sound but not very original, and it is okay, because the principles governing wealth creation are the same as they have been
...more
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Morgan Housel is a partner at Collaborative Fund and a former columnist at The Motley Fool and The Wall Street Journal.

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33 likes · 10 comments
“Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.” 45 likes
“Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.” 34 likes
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