The Psychology of Money Book Review | Psychology of Money Summary | Get Free PDF+ Audiobook

Book Type	Personal Development/Productivity
Author	Morgan Housel
Release Date	1 Sept 2020
Language	English
No of pages	252

Introduction

When it comes to money, we all want to know only that how can we earn more and more money or they try to make their spending's minimum to do savings but No one wants to know How Money  really works ? Because in todays world money is not materialistic thing Money mostly affects our psychological thinking, think it once how many times you think about Money in your whole day like It would so amazing if had millions  of dollars or I don't have to do too much struggle in my life if had money. Money daily impact your psychological thinking. Author Morgan Housel says that Financial Success is not a very hard science this is only a soft skill in which how you behave with Money is important than how much you know about Money. Morgan Housel teaches you many things in his best selling book Psychology of Money about Money Psychology, Thought process and many things. I will tell you 12 important lessons from Psychology of Money book.

4 Important lessons from Psychology of Money book.

1.Rich vs Wealthy 

Our human psychology is like that we connect Money to materialistic things and authors says that this a very big problem in all of us. If you see a Ferrari on the road so think that the person who is driving the Ferrari would be very rich but it can also be possible that He had buy that Ferrari at Loan and his very big amount of his income goes in EMI or loan or he has a very big house or hotels and we judge his richness by his Instagram photos. Yeah I agree that he would be Rich.
But Author defines the rich like this- Rich = Current Income. Every people who is earning as much amount of money is also spending that much money. You can tell someone how much rich by seeing his lifestyle but You can't tell the how much some one is wealthy by seeing his lifestyle because wealth is hidden. Wealth is that income which is not for Spending. The Great Investor Bill Mann says the way to fill richness is simple just spend  all your money as much you can, buy expensive phones, go to expensive restaurants', do stoppings  and here author Morgan housel defines- Wealth is an income not spent , if you want to be rich just for now then you should spend your money as much you can but if you want to be rich for your whole life you have to save your money or Invest your money, you have to grow your money increase your money because what you can buy now by your current income you would able much as more , Wealth give you Options, flexibility, freedom.

2.Luck vs Risk

When someone ask to Nobel Prize Economist Robert Shiller that what you want to know about Investing that you can never know then he answered home- What is the exact role of Luck in successful works. Author Morgan says that You should not depend on the luck but you should also not Ignore the luck. Think if you start a Business or Start-ups and there is 80% chance that your Luckily pass in your business and 20% risk that can you fail in the business. So if you fail in that start-up so you should to yourself this question- it can possible that you did any Mistake or it can be possible you simply land on that 20% , you only have to tell truth to yourself , and other side when you see someone who has succeeded in his business you think that he would be very lucky, same here when situations are being good to you, you think that you are so lucky.

3.Getting Wealthy vs Staying Wealthy

Making money is a skill that anybody can learn but sustaining money is totally a different thing, author describes Money Success in one word- Survival , You to take many risks, stay optimistic and have efforts to make money but to make that money stable and sustainable you have to do totally opposite, You should have a fear that as fast you earned that money you would not finished that you should accept this that all this money is not only come from your effort it came from some other circumstances , situations, other's people's help that can't repeat again and again just like Burren buffet never had under debt, He saw 14 recessions but he didn't invest any of them so quickly, he didn't got excited and invest in any business and he also didn't sticked to any strategy, Author says good investment is not that you invest with good decision , The Good investment is that in who you escape from taking bad decisions. Remember one thing, The Secret of being wealthy is Survival.

4.Volatility

Author says there is nothing Free in this world , If you invest today for long term and in future that investment is paying you high returns so it doesn't mean you are paying nothing, you are still paying something which is a emotional price and volatility is that emotional price, Market always changes and it effects on the stocks and shares that you invest on and it also effect on the people who purchase and their decisions start manipulating , for example you go somewhere and you got fined for parking because you don't do break that rule again, So nobody wants to pay the fine ,you also don't want to pay again and you will definitely change your behaviour. But what if you go that place and in the first you have to pay a Fee for parking not fine , You will give that fee happily by believing that your car will safe there and you daily park your car there, Just like that take everything as Fine take everything as FEE