People do some crazy things with money. But no one is crazy. Everyone has their own unique experience with how the world works. What seems crazy to you might makes sense to me.One economist found that our willingness to take risks with money is influenced by our personal history.Financial decisions are rarely made based solely on a spreadsheet. Personal history, unique perspectives, ego, pride, marketing, and incentives all play a role in how we make decisions about money.

1. No One is Crazy

Luck and risk are closely intertwined. They remind us that our efforts don't always determine our outcomes in life. With 7 billion people and infinite variables at play, we are just one player in the game.Success is not solely a result of hard work, just as poverty is not always due to laziness. Luck and risk both play a role in shaping our lives. We must acknowledge that success can be deceiving, making us believe we are invincible. And failure can be a harsh teacher, making us believe our good decisions were bad because of uncontrollable risks.We cannot control everything, and that's okay.

2. Luck & Risk

"Enough" is a tricky concept these days, always expanding. It's hard to know when to stop. Ambition can grow faster than satisfaction, often from comparing ourselves to others. An insatiable appetite for more will only lead to regret. Know when Never Enough is truly enough:<ul><li class="ql-align-justify">Know when to stop</li><li class="ql-align-justify">Avoid comparing yourself to others and falling into the never-ending battle of wanting more</li><li class="ql-align-justify">Realize that having less is not too little, it's knowing when to be content</li><li class="ql-align-justify">There are many things not worth risking, no matter the potential gain</li></ul>

3. Never Enough

You don't need tremendous force to create tremendous results. Take for example Warren Buffet, his fortune isn't due to just being a good investor but being a good investor for three quarters of century. His skill is investing but his secret is time.There are many books on economics, trading, and betting, but the ultimate guide should be titled: Shut Up and Wait. Good investing isn't about earning the highest returns, but rather consistent and repeated returns that can be sustained over a long period. This is when compounding has the strongest impact and can lead to great wealth.

4. Confounding Compounding

Getting money is one thing. Keeping it is another. If you want to become rich, you'll have to take risks and be optimistic. But staying rich requires more caution and humilityTo stay wealthy, remember these:<ul><li class="ql-align-justify">Instead of seeking big profits, strive for financial security and stability through wise financial decisions.</li><li class="ql-align-justify">Plan for the unexpected - the future is unpredictable, so have a safety net in case things don't go as planned.</li><li class="ql-align-justify">Be a wise optimist - maintain a positive mindset while being realistic about the risks involved when it comes to money.</li></ul>

5. Getting Wealthy vs. Staying Wealthy

Buffet has owned 400-500 stocks but made most of his money on just 10 of them. In business, investing and finance, it's normal for lots of things to go wrong, break, fail and fall.No one makes good decisions all the time. For example, Amazon's Fire Phone - a flop. But that's okay, because Amazon Web Services makes up for it by being one of their most successful products out of hundreds.It's not whether you're right or wrong that's important, but how much money you make when you're right and how much money you make when you're wrong. You can be wrong half of the time and still make a fortune.

6. Tails, You Win

People want to become wealthier to become happier. Happiness is a complicated subject because everyone's different. The common denominator in happiness - people want to control their lives. Controlling your time is the highest dividend money pays.<ul><li class="ql-align-justify">Work-life balance is crucial for happiness.</li><li class="ql-align-justify">Success is not defined by comparing our wealth to others, but by our own satisfaction.</li><li class="ql-align-justify">Choosing a career for future earnings does not guarantee happiness.</li></ul>What you must value are things like quality friendships, being part of something bigger than yourselves and spending quality time with loved ones.

7. Freedom

There is a paradox about using wealth to gain respect and admiration from others. While people may initially be impressed by expensive things, they often don't admire the person behind them. In fact, they may only use your wealth as a comparison for their own desire to be liked.Instead of chasing admiration through material possessions, focus on characteristics that will truly garner respect and admiration from others, such as humility, kindness, and empathy. These qualities will bring you more genuine respect than any flashy car ever could.

8. Man in the Car Paradox

We often think that wealth is determined by what we see, but the truth is, wealth is what is not so easily visible.Rich people may have a high income, but true wealth comes from what is left unseen - the money that has been saved and not spent. Saving and restraint allows you to accumulate enough wealth to one day afford things you never could before.<ul><li class="ql-align-justify">Don't be fooled by appearances - true wealth is hidden.</li><li class="ql-align-justify">Saving and restraint are key to building wealth.</li><li class="ql-align-justify">Spending money to show off is the fastest way to have less money.</li></ul>

9. Wealth Is What You Don't See

Building wealth has little to do with your income or investment returns, and lots to do with your savings rate. You have no chance of building wealth without a high savings rate. People's ability to save is more in their control than they might think.<ul><li class="ql-align-justify">Savings can be created by spending less</li><li class="ql-align-justify">You can spend less if you desire less</li><li class="ql-align-justify">You will desire less if you care less about what others think of you</li><li class="ql-align-justify">You don't need a specific reason to save</li></ul>Saving is a hedge against life's inevitable ability to surprise the hell out of you at the worst possible moment.

10. Save Money

When it comes to money, it's better to be reasonable rather than rational. We don't need a perfect investment strategy to succeed, but rather one that allows us to sleep well at night.If you view "do what you love" as a guide to a happier life, it sounds like an empty fortune cookie. However, if you see it as something that gives you the drive and determination to succeed, it becomes the foundation of a strong financial strategy. This motivation can keep you going even when faced with potential losses, and prevent you from giving up and moving on too soon.

11. Reasonable > Rational

Investing is not a hard science. It involves people making decisions with limited information - on what makes sense to them in that moment. While it's important to understand the history of economics and investing, we must remember that it may not predict the future accurately. Two dangerous things will happen when you rely too much on investment history as a guide to future:<ul><li class="ql-align-justify">You'll likely miss out the outlier events that move the needle the most - the game changing events</li><li class="ql-align-justify">You'll be misled because it doesn't account for structural changes that are relevant to today's world</li></ul>

12. Surprise!

The most important part of every plan is planning on your plan not going according to plan. It's important to leave room for error, as uncertainty and unknowns are a natural part of life.The biggest single point of failure with money is a sole reliance on a paycheck. This is why it's crucial to save for unforeseen circumstances.Margin of safety is the only effective way to safely navigate a world that is governed by odds, not certainties.

13. Room for Error

Long term financial planning is essential. But things change - both the world around you and you - we evolve so much over a lifetime that we don't want to keep doing the same thing for decades on end. It's hard to make enduring long-term decisions when your view of what you'll want in the future is likely to shift.Things to keep in mind when making long-term decisions:<ul><li class="ql-align-justify">Avoid the extreme ends of financial planning - Balance in every point of your life is the strategy.</li><li class="ql-align-justify">Accept the reality of change and move on as soon as possible - Don't be a prisoner of your past, different self.</li></ul>

14. You'll change

Everything has a price, and the key to a lot of things with money is just figuring out what the price is and being willing to pay for it.The price of investing success is not immediately obvious. Market returns are never free and never will be. The volatility/uncertain fee - the price of returns - is the cost of admission to get returns greater than low-fee parks like cash and bonds. The key is to convince ourselves that this fee is worth it. By accepting the volatility and uncertainty of the market, we are paying the admission fee for success.

15. Nothing's Free

Investors often innocently take cues from other investors who are playing a different game than they are. Being swayed by people playing a different game can also throw off how you think you're supposed to spend your money.It's important to know your own time horizon and not be influenced by those playing a different game. You must go out of your own way to identify what game you're playing. Because once you write that mission statement down, you realize everything that's unrelated to it.Identify your own game, write it down, and focus on it.

16. You and Me

Reasons why pessimism is seductive when dealing with money:<ol><li class="ql-align-justify">Money is ubiquitous - something bad happening tends to affect and capture everyone's attention. The stock market rising by 1% is briefly mentioned on the evening news, but a 1% fall is reported in bold, all-caps, red letters.</li><li class="ql-align-justify">Pessimists often extrapolate present trends without accounting for how markets adapt.</li><li class="ql-align-justify">Progress happens too slowly to notice, but setbacks happen too quickly to ignore. Growth is driven by compounding, which always takes time, but destruction is driven by single points of failure that happen in an instant.</li></ol>

17. The Seduction of Pessimism

Keep these 2 things in mind when managing money in a story-driven world:<ol><li>The more we desire something, the more likely we are to believe an overestimated story about it being true.</li><li>Our incomplete views of the world lead us to create complete narratives to fill the gaps. It's human nature to want control, even if it's just an emotional comfort rather than reality.</li></ol>Business, economics and investing, are fields of uncertainty, overwhelmingly driven by decisions that can't easily be explained with clean formulas. We're all tempted to tell ourselves that we are full in control our money.

18. When You'll Believe Anything

Few recommendation for better financial decisions:

19. All Together Now

 Doing well with money has a little to do with how smart you are and a lot to do with how you behave. In this book, Morgan Housel outlines the 20 of the most important flaws, biases, and causes of bad behavior that affect people when dealing with money.

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.

Discover the world of business and economics.

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Economics

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Money & Investments

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Motivation & Inspiration

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Business

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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.

Morgan Housel

The Psychology of Money

These are the most common measure of worth in today's society:<ol><li class="ql-align-justify">Appearance</li><li class="ql-align-justify">Net Worth</li><li class="ql-align-justify">Who You Know / Your Social Circle</li><li class="ql-align-justify">What You Do / Your Career</li><li class="ql-align-justify">What You Achieve</li></ol>

Common Yardsticks to Measure Worth

In simple terms, self-worth is the belief in our own value as a person. It's like being on your own team, loving and respecting yourself just like you would your loved ones.It's not the same as self-esteem, which can come from things like achievements and the approval of others. Self-worth comes from within, from your own core belief system about yourself and your value as a human being.<ul><li class="ql-align-justify">Self-worth is believing in your own value</li><li class="ql-align-justify">It comes from within, not from others</li><li class="ql-align-justify">It's like being on your own team</li><li class="ql-align-justify">Self-esteem can come from outside sources</li><li class="ql-align-justify">It's important to love and respect yourself</li></ul>

Understanding Self-worth ❤️

Ask yourself the following question (much better if you write your answers down):<ol><li class="ql-align-justify">In which situations do you tend to compare yourself with others?</li><li class="ql-align-justify">In what areas are you most critical of yourself?</li><li class="ql-align-justify">In which situations were you pretending to be someone you are not so others would like and accept you?</li><li class="ql-align-justify">When do you feel like your sense of self-worth increases?</li><li class="ql-align-justify">What is the thing you fear the most that people would say of you?</li><li class="ql-align-justify">When do you feel the most insecure?</li></ol>

Self-reflection questions on your "perceived worth"

<ol><li class="ql-align-justify">Your To-Do list</li><li class="ql-align-justify">Your job</li><li class="ql-align-justify">Your social media followers</li><li class="ql-align-justify">Your age</li><li class="ql-align-justify">Your gender</li><li class="ql-align-justify">Your ability</li><li class="ql-align-justify">Your grades</li><li class="ql-align-justify">The number of friends you have / connections</li><li class="ql-align-justify">Your relationship status</li><li class="ql-align-justify">Your money (or lack thereof)</li><li class="ql-align-justify">Your possessions (bags/clothes/shoes/house/car)</li><li class="ql-align-justify">Your likes/preferences</li><li class="ql-align-justify">Other people</li></ol>All of these things are temporary, a self-worth based on these things will easily crumble

What SHOULD NOT determine your self-worth?

<ul><li class="ql-align-justify">Depression</li><li class="ql-align-justify">Risky behavior</li><li class="ql-align-justify">Tolerate abusive treatment</li><li class="ql-align-justify">Nagging sense of failure to reach you own potential</li></ul>Are you suffering one or more of the things mentioned above? If yes, perhaps it is time to change the way your measure your worth

Consequences of Low Self-Worth

<ol><li class="ql-align-justify">Believe you are good, worthy and lovable, regardless of what's happening in your life</li><li class="ql-align-justify">Feel deserving of love and respect from other people</li><li class="ql-align-justify">Accept and love yourself as you are now, with no conditions or exceptions</li><li class="ql-align-justify">Practice self-compassion and treat yourself with care, kindness, and respect</li><li class="ql-align-justify">Believe in your potential to grow, learn, change and improve</li><li class="ql-align-justify">Have flaws and make mistakes that don't threaten your identity or worth</li></ol>

People with GOOD SENSE OF SELF-WORTH are more likely to:

<ol><li class="ql-align-justify">Who made you?</li><li class="ql-align-justify">What God thinks about you?</li><li class="ql-align-justify">Whose you belong?</li></ol>

Find your TRUE WORTH with the following:

The priceless worth of "Salvator Mundi" by da Vinci sold at auction for $450.3M in 2017!Do you ever wonder about your own worth? Stop and consider the complexity of your DNA, intricacies of your body, and the vastness of the universe - all a creation of God. Psalms 139:13 says "For You created my innermost parts; You wove me in my mother's womb." We are masterpieces created in God's image and cherished above all else.Let us honor our existence and remember that we are uniquely and intentionally crafted by the ultimate Artist. 🎨✨

Who Made You?

Who can better explain a machine other than its inventor? Who can better define you other than the God who created you? In Psalm 139:14, David said"I praise you because I am fearfully and wonderfully made;your works are wonderful, I know that full well" This means that God carefully and uniquely created him, and everything about him is beautiful.You are also fearfully and wonderfully made by God. Accept this truth and never let anyone make you doubt your worth. Remember that your Creator knows exactly what He is doing, and you are not an accident. 🙌

Let Your Creator Define Who You Are

Psalm 139:17-18How precious also are Your thoughts for me, God!How vast is the sum of them!Were I to count them, they would outnumber the sand.When I awake, I am still with You You are precious to God. He thinks about you constantly. His thoughts for you are countless, just like the grains of sand on a beach. Whenever you feel insignificant, remember that God's thoughts for you are vast and never-ending.Don't ever doubt your worth. God never stops thinking about you. 🙏

What God Thinks About You?

Jeremiah 29:11 For I know His plans for you, to give you hope and a bright future. Psalm 139:16 Even before you were born, God knew all the days that were meant for you. Let this truth sink in: out of the 8 billion people in the world, God thinks about you and has a special plan for your life. Why is this important? Because God is always thinking about what's good and best for you. He knows you intimately, even before you were born. Remember, God's love for you goes beyond anything you can imagine. Trust in His plan and His ultimate goodness for your life. 🙏

God's Loving Plan for You

As God's child, you belong to Him twice: He created you and He redeemed you. This guarantees that you have His unconditional love, protection, forgiveness, acceptance, inheritance, and access to His promises. Being a child of God gives you a sense of belonging, acceptance, and assurance.As humans, we crave a sense of belonging and acceptance. As a child of God, you have that assurance, you are loved and belong to His family.Remember as a child of God you are..<ul><li class="ql-align-justify">Unconditionally loved</li><li class="ql-align-justify">Protected</li><li class="ql-align-justify">Valuable</li><li class="ql-align-justify">Forgiven</li><li class="ql-align-justify">Accepted</li><li class="ql-align-justify">Provided for</li><li class="ql-align-justify">Peace</li><li class="ql-align-justify">Secured future</li><li class="ql-align-justify">Never alone</li></ul>

Whose You Belong?

John 1:12But as many as received Him, to them He gave the right to become children of God, to those who believe in His name By accepting Jesus as your Lord and Savior, believing that He lived, suffered and died for you, you are now a child of God. And what does a king's children called? Your guess is right! You are a prince or princess.You are a chosen child of the one true God. Embrace this identity and remember to always trust in His love and promises for you. 💖

How do I become His child?

You are worth it because you are beautifully made by the greatest artist Himself. He carefully and lovingly designed you just the way you are.You are worth it because you are precious in God's eyes. He always thinks about you with love and sees the potential and value in you.You are worth it because He redeemed you, bought you back from darkness, and gave you the incredible privilege to become His child. This makes you infinitely valuable and special.

Your True Worth

Isaiah 43:1

Jeremiah 31:3

When you experience God's love and grace, you will never question your worth again

How do you measure your worth? Would you like to discover your true worth? Find and keep hold of your true worth!

Are you searching for your identity and self-worth in places that leave you feeling empty? 🤔💭 Social media and everyone around can make feeling good about who you are tough. Listen to what God says about you instead: you are loved, pursued, chosen, and saved by Jesus Christ. 💖

Join us in Women2Women as Miriam Quiambao-Roberto shares her inspiring faith journey and how God showed her True Worth. Discover your own worth in God's eyes! 📖✨️

The Psychology of Money

W2W | Finding Your True Worth | Feat. Miriam Quiambao-Roberto

Rochelle Anne Nicdao