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No One Is Crazy
People do some crazy things with money. But no one is crazy. The book emphasizes that financial decisions are deeply influenced by individual backgrounds, experiences, and the unique mental models people develop about how the world works. What seems irrational to one person may make perfect sense to another based on their life history.
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47 reads
Luck and Risk
The author underscores the significant impact of luck and risk on financial outcomes, sometimes outweighing skill and effort. "Not intelligence, or education, or sophistication. Just the dumb luck of when and where you were born." Examples like Bill Gates's access to a computer in high school and the contrasting fate of his equally talented friend, Kent Evans, illustrate this point. The Vanderbilt example serves to remind the reader that the line between "bold and reckless" is hard to see.
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40 reads
Idea Of Enough
The concept of "enough" is critical. An insatiable desire for more can lead to ruin, even for those who already have considerable wealth. "“Enough” is realizing that the opposite—an insatiable appetite for more— will push you to the point of regret." The stories of Rajat Gupta and Bernie Madoff highlight the dangers of lacking a sense of enough.
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39 reads
Long-Term Thinking and Survival
The importance of longevity and a long-term perspective in investing is a recurring theme. "Survival gave him longevity. And longevity—investing consistently from age 10 to at least age 89—is what made compounding work wonders." Avoiding ruinous risks and surviving market downturns are paramount to long-term success. A short-term focus on getting rich leads to making mistakes that can ruin you.
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36 reads
Part 2 - Psychology Of Money Explained
Follow me for more such content and continue learning more about Psychology of money in my next post!
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39 reads
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CURATOR'S NOTE
The book explores the often-irrational and emotional ways people think about and behave with money, arguing that success with money is less about intelligence and technical expertise, and more about understanding human psychology and biases.
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