The Psychology of Money (ePUB/PDF) By Morgan Housel

The Psychology of Money (ePUB/PDF) By Morgan Housel read online for free.

The Psychology of Money Information

Name of BookThe Psychology of Money
AuthorMorgan Housel
File FormatPDF/ePub
PDF Size3.48 MB
ePub Size2 MB
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To be successful with money, you need more than just book smarts. Everything depends on how you act. Even the smartest people can’t be taught to change the way they act. Traditional financial education treats things like investments, personal finances, and business decisions as if they were simply mathematical, with clear answers given by data and formulas. In the real world, people don’t use spreadsheets to make choices about their money. Decisions are made at the dinner table or in the conference room, when a jumble of factors such as personal history, worldview, ego, pride, marketing, and unusual incentives all come together. Award-winning author Morgan Housel helps you make sense of one of life’s most crucial topics by sharing 19 short stories that investigate the unusual ways in which individuals think about money.

About The Author Morgan Housel

Partner at The Collaborative Fund, Morgan Housel’s day job. He has won the New York Times Sidney Award and been a candidate for the Gerald Loeb Award for Distinguished Business and Financial Journalism twice. He has also won the Best in Business Award from the Society of American Business Editors and Writers twice. Morgan Housel lives with his wife and two kids in Seattle.

The Psychology of Money Book Summary

lag behind the S&P 500 index. Knowing the odds aren’t in your favour while stock picking isn’t the worst thing ever. It’s fine to diversify a little, but you really should just invest mostly in low-cost index funds.

Guard against avarice at all costs. Stay off the mental hamster wheel of trying to keep up with the Joneses.

It’s crucial to make significant investments at an early age. More than a better rate of return, Warren Buffett’s success as an investor can be attributed to his early start. The power of compounding is incredible.

The ability to save money, rather than make a lot of money via a good career or smart investments, is the most important factor in becoming wealthy.

Putting money aside represents the psychological distance between you and your paycheck.

Having a savings account can provide you with freedom in many areas of your life and priceless serenity. It gives you the freedom to act as you like at any given time.

A decision doesn’t have to be economically prudent if it brings you peace of mind. Paying down student loans at a 4% interest rate, for instance, even though you might earn more money by making smaller monthly payments and investing the difference.

Don’t take money out of the market while it’s down, and be prepared for the unexpected. Maintain a safety margin of one-third. If the US stock market historically returns 6.9% after accounting for inflation, you could expect to receive 4.6%. You could be forced to retire during a market downturn, but history need not repeat itself.

Only nine percent of tactical mutual funds, which try to rebalance their stock-to-bond ratio based on economic expectations, outperformed their benchmarks, demonstrating the futility of trying to time the market. The cost of compounding is bearing through rough patches, but it’s money well spent. Consider the risk in the market to be a cost. What goes up must come down.

Keep in mind that most individuals and the media would rather dwell on the negative even though things do improve with time.

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