Ian Nathaniel Puang's Key Ideas from The Psychology of Money
by Morgan Housel

People like to feel like they’re in control—in the drivers’ seat. When we try to get them to do something, they feel disempowered. Rather than feeling like they made the choice, they feel like we made it for them. So they say no or do something else, even when they might have originally been happy to go along.

Freedom of time is what money can give you that makes you happy. Not the ability to buy things

We tend to judge wealth by what we see, because that’s the information we have in front of us. We can’t see people’s bank accounts or brokerage statements. So we rely on outward appearances to gauge financial success. Cars. Homes. Instagram photos.

Modern capitalism makes helping people fake it until they make it a cherished industry.

But the truth is that wealth is what you don’t see

• Pessimism just sounds smarter and more plausible than optimism.
• Tell someone that everything will be great and they’re likely to either shrug you off or offer a skeptical eye. Tell someone they’re in danger and you have their undivided attention.
• If a smart person tells me they have a stock pick that’s going to rise 10-fold in the next year, I will immediately write them off as full of nonsense.
• If someone who’s full of nonsense tells me that a stock I own is about to collapse because it’s an accounting fraud, I will clear my calendar and listen to their every word.

• There are many things in life that we think are true because we desperately want them to be true
• Hindsight, the ability to explain the past, gives us the illusion that the world is understandable. It gives us the illusion that the world makes sense, even when it doesn’t make sense. That’s a big deal in producing mistakes in many fields

• Go out of your way to find humility when things are going right and forgiveness/compassion when they go wrong
• Less ego, more wealth. Saving money is the gap between your ego and your income, and wealth is what you don’t see. So wealth is created by suppressing what you could buy today in order to have more stuff or more options in the future
• Manage your money in a way that helps you sleep at night
• If you want to do better as an investor, the single most powerful thing you can do is increase your time horizon. Time is the most powerful force in investing. It makes little things grow big

• Become OK with a lot of things going wrong. You can be wrong half the time and still make a fortune, because a small minority of things account for the majority of outcomes
• Use money to gain control over your time
• Be nicer and less flashy. No one is impressed with your possessions as much as you are. You might think you want a fancy car or a nice watch. But what you probably want is respect and admiration. And you’re more likely to gain those things through kindness and humility than horsepower and chrome

• Define the cost of success and be ready to pay it. Because nothing worthwhile is free
• Worship room for error. A gap between what could happen in the future and what you need to happen in the future in order to do well is what gives you endurance
• Avoid the extreme ends of financial decisions
• You should like risk because it pays off over time
• Define the game you’re playing, and make sure your actions are not being influenced by people playing a different game
• Respect the mess. Smart, informed, and reasonable people can disagree in finance, because people have vastly different goals and desires.

• But everything I’ve learned about personal finance tells me that everyone—without exception—will eventually face a huge expense they did not expect—and they don’t plan for these expenses specifically because they did not expect them
• Every investor should pick a strategy that has the highest odds of successfully meeting their goals. And I think for most investors, dollar-cost averaging into a low-cost index fund will provide the highest odds of long-term success
• That doesn’t mean index investing will always work. It doesn’t mean it’s for everyone.

Beating the market should be hard; the odds of success should be low. If they weren’t, everyone would do it, and if everyone did it there would be no opportunity. So no one should be surprised that the majority of those trying to beat the market fail to do so. (The statistics show 85% of large-cap active managers didn’t beat the S&P 500 over the decade ending 2019.

• Everyone have different financial goal and definition of financial freedom. Be careful when following others advice because we all bound by different circumstances
• Social Media and advertisement made us feel like we're not enough and we need that "shiny object" in order to be happy. That makes us made irrational decision with money and end up with debt
• There's no such thing as overnight success. It is compounded effort that succeed in one night. Observe the effort and process, not the result.
• Be frugal with your money

Highly recommended, cause this book is not typical financial advice book. The book explains why we spend money on something we don't need based on emotional decision, not based on mathematical calculation.