The psychology of money by Morgan Housel

Who is Morgan Housel?

Morgan Housel is a former columnist at Motley Fool Magazine and The Wall Street Journal. He has twice won the New York Times Best of Business Award and has been nominated for a Gerald Loeb Award for Outstanding Economic and Financial Journalism. Housel speaks about behavioral finance and uses elaborate storytelling to explain the concepts related to investing and personal money management.

About Psychology of Money by Morgan Housel

In the Psychology of Money, Housel tells us how we can make smart financial decisions by developing a better attitude towards money, and how psychology can be a powerful tool in dealing with matters related to investing and money management.

The book gives us timeless lessons on wealth, greed, and happiness. It teaches us how to manage money and invest it using behavioral psychology.

According to Housel, 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, Housel uses short stories to explain the strange ways people think about money and teaches us how to make better sense of one of life’s most important matters.

10 Quotes from Psychology of Money


“The challenge for us is that no amount of studying or open-mindedness can genuinely recreate the power of fear and uncertainty.”


“But more important is that as much as we recognize the role of luck in success, the role of risk means we should forgive ourselves and leave room for understanding when judging failures.”


“As I write this Warren Buffet’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday. $81.5 billion came after he qualified for Social Security, in his mid-60s.”


“A plan is only useful if it can survive reality. And a future filled with unknowns is everyone’s reality”


“Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast. It requires frugality and an acceptance that at least some of what you’ve made is attributable to luck, so past success can’t be relied upon to repeat indefinitely.”


“Long tails – the farthest ends of a distribution of outcomes – have tremendous influence in finance, where a small number of events can account for the majority of outcomes.”


“The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.”


“Few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games than you are.”


“Like everything else worthwhile, successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret – all of which are easy to overlook until you’re dealing with them in real time.”


“Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.”

Buy Psychology of money by Morgan Housel on Amazon*

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