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The Psychology of Money

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 happ...

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  • 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 th...

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  • 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. T...

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  • 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 toda...

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  • 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 posses...

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  • 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 fina...

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  • 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 ...

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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-ca...

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  • 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. ...

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