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

4.38  ·  Rating details ·  84,762 ratings  ·  7,188 reviews
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. Money--investing, personal finance, and business decisions--is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don't make financial decisions on a spreads ...more
Kindle Edition, 224 pages
Published September 8th 2020 by Harriman House
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Average rating 4.38  · 
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 ·  84,762 ratings  ·  7,188 reviews


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Riku Sayuj
Dec 30, 2020 rated it really liked it  ·  review of another edition
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
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  ·  review of another edition
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 Singaravelu
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  ·  review of another edition
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
Dr. Appu Sasidharan
I have been seeing this book on my Goodreads feeds almost every day since it was published.

Nearly all of my friends have rated it 4 or 5 stars. My expectations were high when I decided to read this book.

I have all three formats of this book with me. I decided to go for the audiobook version. I heard this whole book last weekend when I went for a long solo drive.

When the first chapter was over, I was hugely disappointed. My expectations were high, and I was expecting something extraordinar
...more
Ammit P Chawda
Jul 27, 2021 rated it it was amazing  ·  review of another edition
4.75 ⭐

GENRE - NON FICTION / SELF HELP.

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
...more
Dao Le
Oct 25, 2020 rated it liked it  ·  review of another edition
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
Arunothia Marappan
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
Tanu
"The hardest financial skill is getting the goalpost to stop moving.

It's a Timeless Lesson on Wealth, Greed, and Happiness, one of the best books on personal finance, by award-winning author Morgan Housel. This book is neatly written and contains a lot of wisdom and high-quality content.


Morgan Housel provides 19 stories in this book that explore the unusual ways people think about money. It includes observations on our relationship with money as well as information on how our financial thin
...more
Bradley
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
Harsha Varma
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
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
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
Simon Eskildsen
Apr 01, 2021 rated it it was amazing  ·  review of another edition
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
Aakanksha
The title and the blurb both are misleading.

The book is divided into 20 chapters and focuses only on what people did with their money in different eras, like during World War II, the Great Depression, the fall of the Soviet Union, etc. The sections are filled with reports, figures that bored me to death.

Also, if you're a beginner-level reader, do not pick this one. But if you're deep into this genre and an American, then maybe you can. I can go for an eternity to point out my disliking about th
...more
Hamad
Oct 08, 2022 rated it really liked it  ·  review of another edition
October-Non Fiction book of the month.

Different from what I expected but still a good book.
Prem
Feb 06, 2021 rated it really liked it  ·  review of another edition
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.
The  Conch
Mar 20, 2021 rated it really liked it
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
Andy
Feb 19, 2022 rated it really liked it  ·  review of another edition
This is a clear updated explanation of investing concepts going back to Ben Graham. The author does a better job than most investment books explaining that what matters is what lets you sleep at night, and so there's no single strategy that's best for everyone. I appreciated that he says what he does with his own money and why. There's not much new in terms of the concepts like Mr. Market, the rarity of fat pitches (long tail) and all that, but he doesn't pretend to have invented any of it. Tobi ...more
Sri Shivananda
Easy to read book that was a recommendation from multiple people. It explores luck, risk, behaviors, patience, rationality, earnings vs. savings, ego, outliers, delayed gratification and more as factors in building wealth. The author illustrates all this with relatable examples.
Shraddha Agrawal
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
Barun Patra
Feb 11, 2021 rated it it was amazing  ·  review of another edition
"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
Laura Noggle
May 27, 2022 rated it liked it  ·  review of another edition
Shelves: 2022
Did I miss something?

Might have to reread this shortie or read some kind of analysis — this was nothing new and not very groundbreaking. Not that it needed to be, but I was expecting more based on the raving reviews I've seen online.

Not bad, not great, just generally good things to know if you don't already or feel like you need a reminder.
...more
Betsy Robinson
Dec 27, 2021 rated it really liked it  ·  review of another edition
I put this book on my TBR list after reading a quoted passage from it about some millionaire ragging the writer Joseph Heller about how he’d never have as much money as the rich guy. And Heller answered, true, but he had something the rich guy would never have. “What?” asked the rich guy. “Enough,” answered Heller.

That was enough to stir my hunger and this book fed me well.

Everyone who is interested in a psychological approach to behavior with money will find something valuable here. I read mer
...more
Ravi Gangwani
Apr 20, 2021 rated it it was amazing  ·  review of another edition
Shelves: nonfiction, favorites
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
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
Poonam
Nov 22, 2020 rated it it was ok  ·  review of another edition
Morgan Housel does well with this book.

But only for readers who consider themselves novices with money. Anyone outside that category could possibly find themselves uninspired to get to the end. At the beginning of the 19th chapter, the author congratulates the reader for making it that far. *eyeroll*

Credit where due, the book is well written. It’s easy to read and understand. However, it fails to generate any interest or excitement about the subject. The author, I felt, consciously included se
...more
Puty
Nov 18, 2021 rated it it was amazing
Easy 5 stars from me because I'm totally in sync with this book. I could relate to everything explained in this book; about humility, about our tendency to impress others, about saving, flexibility and independence as financial goals, about you-do-you-ness in making financial decisions, and the list might go on.

I might be biased but it is an enjoyable read. Also, it quoted Daniel Kahneman and Hans Rosling quite a lot; so if you like critical thinking and human behavior subjects (more than you li
...more
Himanshu
Sep 30, 2020 rated it really liked it  ·  review of another edition
Shelves: life, finance, 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
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Morgan Housel is a partner at The Collaborative Fund. He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers, winner of the New York Times Sidney Award, and a two-time finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism. He lives in Seattle with his wife and two kids.

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