The Psychology of Money by Morgan Housel

Favorite Quote

“Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.” — Morgan Housel

The Book in One Sentence

The Psychology of Money explores how money moves around in an economy and how personal biases and the emotional factor play an important role in our financial decisions, as well as how to think more rationally and make better decisions when it comes to money.

Why should you read it?

This is The Alchemist of finance books, not because of its inspiring stories (which it has) but because of its simple language, employed to help us grasp and master a complex topic. Housel’s examples are interesting, unconventional, and yet full of common sense. You can read this book quickly and easily, and when it comes to money, those are two rare occurrences. You’ll feel a lot more calm about your finances after reading this book, and, chances are, you’ll also make a lot more sound decisions.

Key Takeaways

1. Being greedy can turn out to be the biggest financial mistake you’ll ever make.
2. Envy has no place in the money market, as it can blur your thinking.
3. Our early experiences with money determine our financial decisions later on.