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 more stuff or more options in the future.

Less Ego, More Wealth

Some people won't sleep well unless they are earning the highest returns; others will only get a good rest if they're conservatively invested. To each their own.

Manage your money in a way that helps you sleep at night.

Time is the most powerful force in investing. It makes little things grow and big mistakes fade away. It can't neutralize luck and risk, but it pushes results closer towards what people deserve.

Increase Your Time Horizon

You can be wrong half the time and still make a fortune, because a small minority of things accounts for the majority of outcomes. It is fine to have a large chunk of poor investments and a few outstanding ones.

Become OK with things going wrong.

No one is impressed with your possessions as much as you are. You might think that you want a fancy car or a 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 or chrome.

Be nicer and less flashy

Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people. Money—investing, personal finance, and business decisions—is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together. In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.

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Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behavior is hard to teach, even to really smart people. Money—investing, personal finance, and business decisions—is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together. In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.

Morgan Housel is a partner at The Collaborative Fund. He is a two-time winner of the Best in Business Award from the Society of American Business Editors and Writers, winner of the New York Times Sidney Award, and a two-time finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism. He lives in Seattle with his wife and two kids.

The Psychology of Money

Less Ego, More Wealth

Manage your money in a way that helps you sleep at night.

Increase Your Time Horizon

Become OK with things going wrong.

Be nicer and less flashy

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