Introduction:
Before getting my hands on a self-help book, I try to read both positive and negative reviews related to it. It gives me somewhat idea about that book and if it grabs my attention, I read that book in no time. 'The Psychology of Money' by Morgan Housel was published in September 2020. It is a very famous book which is about money and how individuals deal with it, as the title suggests. The book is straightforward to read, with 20 chapters that are easily understood. The tale is engaging and does a wonderful job of keeping you interested.
This book's teachings can be found all over the internet.
But here are some of the points I want to jot down:
- Money isn't only about investments, spreadsheets, and numbers. Money is a social science, similar to sociology, rather than a physical science like physics.
- The most valuable commodity that money can purchase is freedom and independence. He has advised us to use the money to achieve control over our time. Morgan Housel has also said that not having control of our time is such a tremendous and universal drag on happiness. The opportunity to do anything we want, whenever we want, with whomever we want, for as long as we want yields the highest financial dividend.
- It's more difficult to stay wealthy than it is to get wealthy. Housel claims that how much you save is the gap between your ego and your salary in the context of social comparison. That formula was fantastic.
- Nothing in the universe is determined only by one's efforts. The outcome is always influenced by chance and risk.
- Be wary of who you listen to for investment advice. You are not the only one who is playing the same game as you.
- The last chapter of the book, in which Morgan outlines how he spends his own money, is, in my opinion, the greatest. We get to learn a lot from that chapter.
This book has gone viral. But don't start reading this book just yet.
The flaws I found in "Psychology of Money":
- The title of the book a click-bait. Yes, Housel brings up the subject of psychology. However, the title of this book led me to expect a lot more behavioral finance and decision analysis. But I did not get a clear picture of its application from this book.
- The book discusses money psychology, but it does not address how men and women view investing in savings, and other financial matters differently. This is a massive hole that has yet to be filled.
Conclusion:
I think it's great that more people are talking about money these days. I'm a young lady in my early twenties who has recently begun working for myself, and I expected a lot from this book before reading it. There are some terms that the author has used in the book while explaining some concepts, which I was unable to understand. To read this book you should have a moderate understanding of the finance terms. I would like to give this book 6 out of 10.
Happy Reading!!!
