The Psychology of Money

Metadata

• Author: [[Morgan Housel]]
• Full Title: The Psychology of Money
• Category: #books

Notes

The accidental impact of actions outside of your control can be more consequential than the ones you consciously take. (Location 342)

For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails. (Location 457)

There is no reason to risk what you have and need for what you don’t have and don’t need. (Location 508)

Sensible optimism is a belief that the odds are in your favor, and over time things will balance out to a good outcome even if what happens in between is filled with misery. (Location 771)

Destruction in the face of progress is not only possible, but an efficient way to get rid of excess. (Location 777)

Control over doing what you want, when you want to, with the people you want to, is the broadest lifestyle variable that makes people happy. (Location 967)

Using your money to buy time and options has a lifestyle benefit few luxury goods can compete with. (Location 977)

doing something you love on a schedule you can’t control can feel the same as doing something you hate. (Location 986)

30 Lessons for Living, (Location 1046)

- Note: Reference Book

There is a paradox here: 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. (Location 1067)

Spending money to show people how much money you have is the fastest way to have less money. (Location 1085)

one of the most powerful ways to increase your savings isn’t to raise your income. It’s to raise your humility. (Location 1194)

Spreadsheets are good at telling you when the numbers do or don’t add up. They’re not good at modeling how you’ll feel when you tuck your kids in at night wondering if the investment decisions you’ve made were a mistake that will hurt their future. (Location 1575)

The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future. (Location 1639)

Imagining a goal is easy and fun. Imagining a goal in the context of the realistic life stresses that grow with competitive pursuits is something entirely different. (Location 1665)

the first rule of compounding is to never interrupt it unnecessarily. (Location 1694)

Aiming, at every point in your working life, to have moderate annual savings, moderate free time, no more than a moderate commute, and at least moderate time with your family, increases the odds of being able to stick with a plan and avoid regret than if any one of those things fall to the extreme sides of the spectrum. (Location 1713)

Everything has a price, but not all prices appear on labels. (Location 1734)

Bubbles do their damage when long-term investors playing one game start taking their cues from those short-term traders playing another. (Location 1900)

Optimism sounds like a sales pitch. Pessimism sounds like someone trying to help you. (Location 1939)

Growth is driven by compounding, which always takes time. Destruction is driven by single points of failure, which can happen in seconds, and loss of confidence, which can happen in an instant. (Location 2080)

there is no greater force in finance than room for error, and the higher the stakes, the wider it should be. (Location 2204)

Carl Richards writes: “Risk is what’s left over when you think you’ve thought of everything.” (Location 2244)

If you want to do better as an investor, the single most powerful thing you can do is increase your time horizon. (Location 2328)

Become OK with a lot of things going wrong. You can be wrong half the time and still make a fortune, (Location 2331)

Use money to gain control over your time, (Location 2336)

Uncertainty, doubt, and regret are common costs in the finance world. (Location 2346)

History is just one damned thing after another. (Location 2729)