The Psychology of Money: Timeless lessons on wealth, greed, and happiness -PDF
Everyone who wants to comprehend the complex relationship between personal finance and human behavior should read "The Psychology of Money." The perceptive examination of wealth, greed, and happiness by Morgan Housel provides priceless insights that will change the way you approach and handle your money.
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If you want to become wealthy—no matter how you define that—you must accomplish two disparate, wildly divergent things: Get money. And keep money. It's hard to do both well because each requires different skills and different ways of thinking. But unless you do both, you won't become wealthy.
To get money, we need to take risks and be optimistic about the future. Keeping money once you have gotten it requires a complete about-face. It requires humility, frugality, and the innate fear that it can all be taken away in a poof. It's more about psychology than finance.
This is just some of the expert, spot-on advice about the psychology of money from Morgan Housel, a partner at The Collaborative Fund and a former columnist for The Motley Fool and The Wall Street Journal. He has written a book that is highly readable (translation: you don't need a degree in economics to understand it) and packed with intelligent information we all need no matter our age or financial situation. Be prepared to highlight a lot or jot down the ideas in a notebook.
Among many other things, find out:
• An excellent definition of an investing genius. I never would have guessed this! (It has nothing to do with education or investing experience.)
• Money's greatest intrinsic value and how it can make you happier. THIS is the best personal benefit of having enough money.
• The difference between wealthy and rich. It's more than semantics, and not knowing the difference is the source of countless poor money decisions.
• Knowing financial history is important as a rough guide to what tends to work—and what doesn't. But here's the kicker: It is not in any way a map of the future. Learn the two dangerous things that happen when you rely too heavily on investment history as a guide to what will happen next.
• The most important part of every financial plan is something you probably never considered.
• Why financial pessimists get way more press and airtime than the optimists.
Bonus: If you read nothing else, skip to Chapter 19. It is filled with excellent life advice for investing. You will make money. You will lose money. But there is a balance, and the simple truth of these words of wisdom will calm your nerves and make you smile. Guaranteed!
Double Bonus: Keep reading to Chapter 20, which outlines author Morgan Housel personal investing plan. It's simple. It's smart. And you can easily follow it if that feels like the right thing for you to do.
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