By Morgan Housel
It is not necessarily about how much you know when it comes to money management. It’s all in the way you hold yourself, believe it or not. And it’s challenging to teach even the most intelligent people how to act in certain situations.
In financial decision-making classes, facts and equations are used to instruct students to make the most informed decisions possible. However, people do not utilize spreadsheets to make financial decisions when dealing with money in the actual world. At the dinner table or in a conference room, they’re born out of the collision of personal history, your unique point of view on the world, and ego, pride, marketing, and weird incentives.
A trip through 19 short stories that illustrate the odd ways people think about money is provided by Morgan Housel, one of the best-selling authors of The Psychology of Money.
The Psychology of Money has a lot to teach us. It is possible that Housel’s book will appear to be a lighthearted look at the intersection of psychology and money due to his pleasant writing style. Yet, it is a master class in the construction and development of the narrative. We get the most profound insights into the psychology of money through the lens of history and personal tales – what it means to us, how we spend, save, and invest our money, and how we tie who we are today to who we will be tomorrow, among other things. When it comes to risk, Housel encourages us to examine it from various perspectives, demonstrating that orthodox economists’ narrow definitions of risk are insufficient to assist individuals in making decisions about money and other investments. And finally, while the book is brief, it is short in the best possible way. It’s a fast-paced book with a massive payoff at its conclusion.