The Psychology of Money - Deepstash
  • Doing well with money has little to do with how smart you are, and a lot to do with how you behave.
  • Financial success is not hard science, it’s a soft skill where how you behave is mor...

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The Psychology of Money

The Psychology of Money

by Morgan Housel

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  • Luck and risk are siblings, they are both the reality that every outcome in life is guided by forces other than individual effort.
  • The world is too complex to allow 100% of your action...

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BILL GATES

Success is a lousy teacher, it seduces smart people into thinking they can’t lose.

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  • There is no reason to risk what you have and need for what you don’t have and don’t need.
  • The hardest financial skill is getting the goalpost to stop moving.
  • If expectations ri...

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  • Lessons from one field can often teach us something important about unrelated fields.
  • You do not need tremendous force to create tremendous results.
  • If something compounds, a s...

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  • There are a million ways to get wealthy. The only way to stay wealthy is some combination of frugality and paranoia.
  • To summarize money success in a single word: survival.
  • Gett...

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  • Compounding doesn’t rely on earning big returns, merely good returns sustained uninterrupted for the longest period of time, will always win.
  • Many bets fail not because they were wrong...

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  • It is not intuitive that an investor can be wrong half the time and still make a fortune.
  • Anything that is huge, profitable, famous, or influential is the result of a tail event, an ou...

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  • The highest form of wealth is the ability to wake up and say “I can do whatever I want today.”
  • The ability to do what you want, when you want, with who you want, for as long as you wan...

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  • A small amount of wealth means the ability to take a few days off work when you are sick without breaking the bank.
  • To obtain bit by bit, a level of independence and autonomy that come...

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  • The paradox of wealth is that people tend to want wealth to signal to others that they should be liked and admired.
  • You might think you want an expensive car, a fancy watch, and a huge...

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  • Someone driving a $100,000 car might be wealthy. Or he may just be poorer by $100,000.
  • We tend to judge wealth by what we see because that is the information we have i...

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  • Rich is a current income. Someone driving a $100,000 car or living in a big house is almost certainly rich because you need a certain level of income to afford the monthly pay...

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  • Building wealth has little to do with your income or investment returns, and lots to do with your savings rate.
  • If you view building wealth as something that will require more money or...

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Two dangerous things happen when you rely too heavily on investment history as a guide to what’s going to happen next.

  1. You will likely miss the outlier events that move the needle the mo...

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  • Good ideas taken too far are indistinguishable from bad ideas.
  • People underestimate the need for room for error in almost everything they do that involves money.
  • Room for error...

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  • The ability to do what you want, when you want, for as long as you want has an infinite ROI.
  • You can’t prepare for what you can’t envision.
  • Avoid single points of failure. If m...

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  • Everything has a price and the key to a lot of things with money is figuring out what that price is and being willing to pay it.
  • Most things are harder in practice than they are in the...

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  • Short-term traders ignore the rules governing long-term investing, particularly around valuation. Because those rules are irrelevant to the game they are playing.
  • Bubbles do their dama...

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  • Optimism is the belief that the odds of a good outcome are in your favour over time, even when there will be setbacks along the way.
  • Two topics will affect your life whether you are in...

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  • Stories are, by far, the most powerful force in the economy.
  • The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being ...

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  • Go out of your way to find humility when things are going right and forgiveness and compassion when things are going wrong.
  • Less ego equals more wealth.
  • Become okay with a lot ...

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