A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.
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Author and Partner at Collaborative Fund Morgan Housel shares 19 short stories exploring the strange ways people think about money; the book’s major theme is that we can better understand money through psychology and history than finance. In 2018, Morgan wrote a report outlining 20 of the most important flaws, biases, and causes of bad behavior towards money titled The Psychology of Money; the report went viral; the book is an expanded version of the report.
In investing you must identify the price of success—volatility and loss amid the long backdrop of growth—and be willing to pay it.
The Book’s premise is that 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. A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.
“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” – Bill Gates
Here are my favourite take-aways from reading,The Psychology of Money by Morgan Housel: