I just finished reading the most exiting, light and funny book I’ve ever read on finance. It’s called “The Psychology of money and written by Morgan Housel. Morgan is a blogger at The Motley Fool, an advisor at The Collaborative Fund, that lends advise to startups, and a writer for the Wall Street Journal.
After finishing this good read , I realised I have sinned against quite a few of the financial laws Morgan Housel presents. And the chances are, that you have too. Since to this day there are more people in the world not being wealthy financial investors, compounding or trading stocks. If you just happen to be on the other side. This is not for you, leave your info, so I can maybe hire you later on to give finance lessons on zoom lol.
The book has a very handy summary of the most important advise at the end of the book. Handy because if you want a recap some years or time later, you don’t have to flip through the whole book again. It would be so amazing if other non-fiction writers would do that standard.
So here below, in a nutshell, Morgans’ witty take on finance and investing:
Go out of your way to find humility when things are going right, and forgiveness- compassion, when they go wrong. Because in your finance life, you’ll have highs, you’ll have lows. So stay humble when you are riding your high, and forgive yourself and others when times are depressing.
Less ego, more wealth: saving money is the gap between your ego and your income. The less you care about the opinion of others and the less you care about your image, the easier it will be to save money.
Manage your money in a way that lets you sleep at night. Don’t take unnecessary risks.
If you want to do better as an investor, the single most powerful thing you can do is increase your time horizon. Time is the most powerful investing tool. It makes little things grow big and it makes big mistakes fade away.
Become OK with things going wrong. You can be wrong half the time and still make a fortune.
Use money to gain control over your time.
Be nicer and less flashy. No one is impressed as much over your possessions as you are.
Save. Just save. you don’t need a specific reason to save.
Define the cost of success and be willing to pay it.
Worship room for error: A gap between what can happen in the future and what you need to happen in the future in order to do well is what gives you endurance. And endurance is what makes compounding magic over time.
Avoid extreme ends of financial decisions.
You should like risk because it pays off over time.
Define the game you are playing and make sure your actions are not being influenced by people playing a different game.
Respect the mess. There is no single right answer. Just the answer that works for you.
I think most of this advise speaks for itself, but if you’d like to know more I strongly recommend the book. It’s published by Harriman House and available, well, everywhere!