People tend to want wealth to signal to others that they should be liked and admired. But in reality those other people often bypass admiring you, not because they don't think wealth is admirable, but because they use your wealth as a benchmark for their own desire to be liked and admired.

Paradox

<ul><li>Doing well with money has a little to do with how smart you are and a lot to do with how you behave. And behavior is hard to teach, even to really smart people.</li><li>Every decision people make with money is justified by taking the information they have at the moment and pugging it into their unique mental model of how the world works.</li></ul>

BEHAVIOUR

<ul><li>Have a six month emergency fund and save 10% of your salary.</li><li>The ability to stick around for a long time, without wiping or being forced to give up is what makes the biggest difference.</li><li>Your success as an investor will be determined by how you respond to punctuated moments of terror, not the years spent on cruise control.</li><li>Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you.</li><li>Planning is important, but the most important part of every plan is to plan on the plan not going according to plan. </li></ul>

Investment Related 

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.

moneyandinvestments

Money & Investments

books

Books

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.

BEHAVIOUR

Similar ideas to BEHAVIOUR

Money = Behaviour

Mental models and learning

Guardian