by Morgan Housel
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• The most scare thing in the world is time because you can earn money but you can not earn more time.
• What money does is that it gives you ability to do what you want, when you want, with who you want and for as long as you want.
• Studying a specific person can be dangerous because we tend to study extreme examples like billionaires and CEOs.
• You’ll get closer to actionable takeaways by looking for broad patterns of success and failure.
• The ceiling for social comparison is so high that no one will ever hit it. So it is better to accept that you might have enough.
• You reputation, family, friends and happiness are most important things. Stop taking risks that might harm them.
• 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 and endurance is what makes compounding magic over time.
• That gap is your room for error.
• Highest returns tend to be one-off hits that can’t be repeated.
• It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time.
• Getting money requires taking risks and being optimistic
• But keeping money requires the opposite of taking risk. It requires humility and fear that what you’ve made can be taken away from you just as fast.
• We tend to judge wealth by what we see (Cars, Homes and Instagram photos) but we can’t see people’s bank accounts or brokerage statements.
• Wealth is hidden. It’s income not spent.
• It is an option not yet taken to buy something later.
• Spending beyond a pretty low level of materialism is to show people that you have/had money.
• For most people it’s a daily struggle against instincts to show more than they have and keep up with others doing the same.
• Everything has a price, and the key to a lot of things with money is to figure out what that price is and pay it.
• For investing the price is volatility,fear,doubt and regret.Trying to avoid this price is similar to shoplifting which rarely ends well.
• Do not aim to be coldly rational when making financial decisions.Aim to just be pretty reasonable.
• Reasonable is more realistic and you have a better chance of sticking with it for the long run.
• You don’t need a specific reason to save.
• It’s great to save for a car or a down payment or a medical emergency. But saving for things that are impossible to predict or define is one of the best reasons to save.
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A book lover trying to understand life.
Few things to keep in mind if you want to take your personal finance journey seriously.
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