The Psychology of Money: Timeless Lessons on Wealth, Greed, …

Reviews

1. 

   Desmond Yuen – July 20, 2024

   Remember: Margin of safety
   Why the book was so easy and enjoyable to read? It has a lot of good examples, data and fun facts to get the point across to the readers. The chapter titles are attention grabbers to get our attention to read more. But the most important thing to learn from this book is “Margin of Safety”.According to the author, it is one of the most underappreciated forces in finance. It comes in many forms: a frugal budget, flexible thinking, and a loose time line – anything that lets you live happily with a range of outcomes. Controlling your time is the highest dividend money pays.The book is pretty much evolved around the concept of “Margin of Safety.” It encourages readers to save money and not spending money lavishly. The key is staying wealthy and not just getting wealthy. We can’t be complacent and assume that yesterday’s success translate into tomorrow’s good fortune. Wealth is what you don’t see. Spending money to show people how much money you have is the fastest way to have less money.Good investing is not about getting the highest returns. It’s about getting good returns that you can stick with and which can be repeated for the longest period of time. According to the author, the historial odds of making money in US markets are 50/50 over one-day periods, 68% in one-year periods, 88% in 10 -year periods and (sofar) 100% in 20-year periods.Forecasting is hard. This is why invetsment guru Benjamin Graham is a strong advocate for margin of safety as the purpose of margin of safety is to render the forecast unnecessary. The author cited the success rate of venture financing from 20024 to 2014: 65% lost money, 2.5% of invetsments made 10X to 20X, 1% made more than 20X return, only 1/2% (~100 companies) earn 50X or more.According to George Soros, it is not whether you are right or wrong that’s important but how much money you made when you’re right and how much you lose when you’re wrong. You can be wrong half the time and still make a fortune.The most interesting part of the book is the last chapter: Postcript. Thanks to the internet, the world is more connected than ever. What that means is the talent pool the readers compete with has gone from 100s or 1000s sprang their towns to millions or billions spanning the globe. The author ended the book with a not so pessimistic note. The era of “this isn’t working” may stick around. And the era of “We need something radically new, right now, whatever it is” may stick around.

2. 

   Ariel W – July 20, 2024

   “The Psychology of Money” by Morgan Housel is a thought-provoking and insightful book that explores the psychological factors that influence our relationship with money and how they impact our financial decisions. It’s not a traditional finance book filled with technical jargon and investment strategies, but rather a philosophical exploration of the human element in money management.Key Themes and Principles:The Importance of Behavior: Housel emphasizes that our financial success is largely determined by our behavior, not just our investment strategies. He argues that understanding our own psychology and biases is crucial for making sound financial decisions.The Power of Time and Patience: The book stresses the importance of time and patience in investing. Housel advocates for a long-term perspective and avoiding impulsive decisions driven by fear or greed.The Role of Luck and Chance: Housel acknowledges the role of luck and chance in financial success. He cautions against attributing all success to skill and warns against the dangers of overconfidence.The Importance of Simplicity and Humility: The book emphasizes the value of simplicity and humility in managing money. Housel argues that complex strategies and excessive risk-taking often lead to poor outcomes.The Pursuit of Happiness: Housel explores the relationship between money and happiness. He suggests that true financial well-being is not just about accumulating wealth but also about achieving financial independence and security.Practical Applications:Understanding Behavioral Biases: Housel provides insights into common behavioral biases that can lead to poor financial decisions, such as loss aversion, confirmation bias, and herd mentality.Developing a Long-Term Perspective: The book encourages readers to adopt a long-term perspective on investing and avoid chasing short-term gains.Embracing Simplicity and Humility: Housel advocates for a simple and disciplined approach to managing money, avoiding unnecessary complexity and risk.Overall:”The Psychology of Money” is a refreshing and insightful book that offers a unique perspective on the relationship between money and human behavior. It’s a valuable read for anyone looking to develop a more mindful and effective approach to managing their finances. Housel’s engaging writing style and real-world examples make the book both informative and entertaining.

3. 

   Cliente Amazon – July 20, 2024

   Excelente abordagem sobre a nossa relação com o dinheiro mas vai muito além… As reflexões sobre propósito, liberdade e independência são sensacionais. Baita livro que já está no meu top 3.

4. 

   Javier MarDom – July 20, 2024

   Este libro realmente te hace cuestionar tu relación con el dinero y la manera en que nuestro comportamiento influye en nuestras finanzas. De fácil lectura y muy bien explicado

5. 

   Syed Niaz Ali Shah – July 20, 2024

   The print of the book i received is good 👍

6. 

   Fernando Oliveira – July 20, 2024

   Facil de ler, fantastica refleção sobre como usamos e pensamos no dinheiro e formas de investir e de pensar em como investir dinheiro