Money’s Mind
A review of “The Psychology of Money: Timeless lessons on wealth, greed, and happiness” by Morgan Housel
Finance books don’t hold my attention, until recently. . . . Money/finances turn out an inevitable subject. I’ve read a few finance books, including The Richest Man in Babylon by George Clayson and Rich Dad Poor Dad by Robert Kiyosaki. I finished the former. I only read 50% of the latter; I somehow lost interest. Thus far, The Psychology of Money served the best. It was the selected read for two book clubs I am a part of and was reviewed with strong recommendations.
On seeing the title, I wondered, “Is this author implying that money has a mind of its own?” A helpful way to think about this is to note that there is no money without man; and instead it bears the mind of its owner/creator.
Therefore, The Psychology of Money is an extensive exposition on why, how, and when we want, own, and spend money. It contains tons of anecdotes which helps in driving home the message in every section of the pages. The facts and stats as presented by Housel doesn’t bore you. He breaks every point down to the basics and makes the book accessible by just any reader. He employed simple language. The book shows how easy and beneficial it is to tell how not to with money than telling how-to.
Though it is set in the U.S. economy, the book contains principles with universal applicability. The following are a few take outs and action points from the book with regards to personal finance management:
Be humble.
Do not try to impress.
No one is crazy with how they use their money.
Just save ( for no reason identified).
Acknowledge the principle of compounding.
All the points above were dealt with exhaustively in the text.
This is one book I’d like to revisit again as I journey on in life, especially with my expenses. Reading it felt like a grown up guiding me on a journey. Housel is such a great guide through this book. Understanding a subject as financial management down to the basics is helpful in ensuring a progressive journey through adulthood.
Here is a favourite statement from the book:
‘Wanting to believe we are in control is an emotional itch that needs to be scratched, rather than an analytical problem to be calculated and solved. The illusion of control is more persuasive than the reality of uncertainty. So we cling to stories about outcomes being in our control’ (Ch. 18; pg. 200).
This is a profound truth with wide application beyond the subject in view.
Do you read finance books? Which has served you the most? Share in the comment alongside your recommendations.
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