Muhammad Dhito Prihardhanto’s Reviews > The Psychology of Money > Status Update

No matter how we save or invest I’m sure we’ll always have
the goal of independence, and we’ll always do whatever maxi-
mizes for sleeping well at night.
We think it’s the ultimate goal; the mastery of the psychology
of money.
But to each their own. No one is crazy.

The bigger the gap between what you want to be true and what you
need to be true to have an acceptable outcome, the more you are protecting yourself from falling victim to an appealing financial fiction.

Expecting things to be great means a best-case scenario that feels flat.
Pessimism reduces expectations, narrowing the gap between possible
outcomes and outcomes you feel great about.

A takeaway here is that few things matter more with money than
understanding your own time horizon and not being persuaded by the
actions and behaviors of people playing different games than you are.

Market returns are never free and never will be. They demand you pay
a price, like any other product. You’re not forced to pay this fee, just like
you’re not forced to go to Disneyland. You can go to the local county fair
where tickets might be $10, or stay home for free. You might still have a
good time. But you’ll usually get what you pay for. Same with markets.

Long-term financial planning is essential. But things change—both the world around you, and your own goals and desires. It is one thing to say, “We don’t know what the future holds.”

The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.

Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run, which is what matters most when managing money.