A book that might help to solve your money management crisis, The Psychology of Money will take you within your mind and your bank account at the same time because how we think is highly related to how we manage our money. Earning money is one talent whereas managing money so well that it might help in compounding is a completely different story. This book will point out the simpler things that you were ignoring regarding your money. So before you pick it up, here is the book review of The Psychology of Money.
Book Review – Psychology of money
Author – Morgan Housel
Pages – 252 pages
Genre – Non-Fiction, Self-help
My Ratings – 4.5 out of 5 stars
Click here to purchase the book.
Blurb (from Goodreads):
Timeless lessons on wealth, greed, and happiness 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. How to manage money, invest it, and make business decisions are typically considered to involve a lot of mathematical calculations, where data and formulae tell us exactly what to do. But in the real world, people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your unique view of the world, ego, pride, marketing, and odd incentives are scrambled together. In the psychology of money, the author shares 19 short stories exploring the strange ways people think about money and teach you how to make better sense of one of life’s most important matters.
Book Review:
Psychology of money is a non-fiction book related to finance and its management. As the name suggests, this book discusses in detail the mental thinking that goes into money-making. It is a very interesting read and takes a simplistic take on money-making.
Apart from several suggestions regarding money-making, the author discusses several examples in order to explain to us the concept of luck and risk factor in our lives. Ignoring these would entail ignoring a huge part of the complete money-making process. Just like any other occupation, the work of successful billionaires has been simplified by the author.
Writing Style:
The writing style of the author is first-person conversational, which makes the suggestions friendlier and easily comprehendible. The author has tried to break down each of his chapters into simple concepts that are very common to us but often ignored in the quest for money-making.
If you are wondering whether or not this book provides you with the formulas of money-making, then I would have to disappoint you, because this book tells you about how money is made in general terms and how to not squander it away. It deals with the luck and risk factor, the sense of security while availing risk, the margin of safety, the failures in between the successes, the mental faculty needed to retain the wit when the whole world goes crazy, and many more such mantras.
The author has opted for examples of people from real life that inspire a lot of people and are their role models for explaining these concepts in simpler terms. Even if a reader is from a non-financial background, he/she will find it easy to understand the thoughts of the author. The most important part is that the author remains crystal clear regarding the uncertainties of the market and finance. There is no sure formula or no fixed risk, and that has been tackled throughout the story. The takeaway point of this book is how the author has explained the maneuvering necessary in order to ensure minimal risk and maximum gain.
Some of the key pointers of the book:
- Don’t judge others for their wealth or poverty, luck and risk play an equal part in everyone’s life – being poor doesn’t necessarily mean that they are lazy
- Earning wealth and retaining wealth are two different skills, ignore none
- Ambition is good but Greed leads to the downfall
- Errors are inevitable, don’t dwell on it
- Room for Error helps in taking greater risk
- Earn money, and then earn time from that money
- Wealth is not what eyes see but what your account holds
- Change is inevitable. Nothing can prepare you for the future.
- We don’t always decide with theories but most of the time with our emotions.
Conclusion:
Overall, this is a must-read. I immensely enjoyed this book and would recommend this book to almost everyone. Even if you don’t read books, you should pick this one because money is something we all tend to understand and need. The easy and comprehensible writing style will make you understand the concepts and manage your money in a better manner. Do pick it up!!
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