“When I had money, everyone called me brother” - Polish proverb
In today’s world financial stability is something all of us seek. In the book, “Psychology of Money”, Housel has very cleverly made this read engaging by interacting with his readers by constantly including a variety of anecdotes and real life examples. His simultaneous indulgence in philosophy as well as psychology, helps bring out one of the main ideas that – money is a mindset. Alongside this, wise words about financial success that can be acquired in the long run have also been shared.
Wanting to make money is a basic human nature, some of us view it as a means of living, while others view it as the symbol of status. The book focuses on the fact that there is a thin line between wanting to make money and greed. Once greed takes over, it is the beginning of the end. Morgan Housel’s understanding and analysis of basic human nature talks about, how sometimes financial decisions may be made in haste according to economic situations. Logic, reasoning, ego, and pride take over as people start making investments based on word of mouth or by following certain trends rather than actually analyzing the stock market.
Everyone can make money, but the main challenge is to be able to stay wealthy. With different times come different economic situations and different ways to tackle them. It is the ability to make decisions and the foresight of an individual that helps them sustain their wealth. The will to be able to sustain one’s self is inherent. Positivism is something that helps people manifest their trade of money or investments. Sometimes, people may not understand the meaning of losing 20% of their fortune, thinking of it as just 20%. But, it is the experience that makes people more cautious which is important while taking risks.
A reference to the financial genius, Warren Buffet is made, when Housel talks about how Buffet has always been a man of wise financial decisions, which has caused him to influence one of the greatest investors of all time- Benjamin Graham . Starting from a young age is what has made Buffet the financial giant that he is today. Thus, reiterating the fact that it is not only luck but also an individual’s ability to avoid catastrophic mistakes and their understanding of the power of compounding that makes them successful.
Overall, the value of humility and the importance of saving is paramount. Healthy money habits are what may get us, where we aspire to be financially. Luck and risk both play an important role in making money, but there is a line between being bold and reckless. Money doesn’t always necessarily buy one’s happiness, the process of making it or sustaining it may be equally stressful. In the end, the human relationship with money can be deemed as emotional. This is because money is sometimes so volatile, uncertain, and desirable that it evokes emotions such as fear, guilt, and envy as well as emotions such as happiness. The key to maintaining stable finances is to ensure satisfaction and contentment.
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