The Psychology of Money

Book Summary

Modern capitalism makes its participants believe that how well you do with your money has a lot to do with intellect and ability to assess and quantify all possible scenarios with the help of spreadsheets and numbers and a lot of maths. But in reality all decisions related to money have very little to do with spreadsheets and a lot to do with our behaviour.

Morgan Housel in his book The Psychology of Money is a collection of 20 short stories which encapsulates this very idea. Each chapter stands on its own and can be read independently. Every chapter describes some very important and sometimes counterintuitive features of psychology which heavily influence our decision making process. The anecdotes contained in the book are very thought provoking and makes you realise some of your own inherent behavioral traits.

Before analysing behaviour, the book talks about how these behaviour patterns are ingrained in an individual & mould us into who we are today. Factors like the geography you were born in, the family you were born into and the past experiences leave a deep imprint in our subconscious which drives our conscious perspectives.

If you are one of those who feel that you could have done better when it comes to your finances, this book is a must read for you to realise the value of what you have and quit being harsh on yourself.

Book: The Psychology of Money

Author: Morgan Housel