Book Review: The Psychology of Money


The Psychology of Money - Morgan Housel

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We all know I'm one for anything to do with psychology and money is such an interesting topic, especially since it's why we all try so hard right? It gives us freedom, buys us unnecessarily large or expensive things and allows us to have all our biggest desires in life. But really how does that link with the makeup of our brain and are we hardwired to spend more or save more? To be honest I thought this book was going to answer a lot more of these questions and it really didn't. This book came highly recommended by a few places and people but I think it's much more finance focused than psychology focused (from someone who is studying a psychology degree currently, trust me on that). 

There are of course many elements of psychology in this and looking at some habits of people that have money however the biggest chunk of the book in my opinion is talking about the stock market and how that makes a difference in the world, as well as the things that influence that and investing and how THOSE things are driven by psychology and people. I was hoping for some real nuggets of what parts of our brain are wired to want designer clothes or want to make more money or how we can control money impulses and so on but I didn't find these here. 

That being said, it wasn't a complete waste of time, I did learn some things and I still highlighted a lot of parts which I will share some of here to give you a peek. But all in all I would say it's more about stock markets and finance than pure psychology, it just depends what you are interested in! It's clear that a lot of knowledge and research went into this book and it pulls things together very well. Hard to read at some points and slower to get through than I thought, but again, not all a complete loss. Here are some of my highlights from the book, and when I say highlights, I mean I literally use a highlighter on the page - that wasn't a hyperbole:

  • success is not a hard science. It's a soft skill, where how you behave is more important than what you know.
  • ..knowing what you do tell you nothing about what happens in your head when you try to do it. 
  • "The customer is always right" and "customers don't know what they want" are both accepted business wisdom.
  • People who have control over their time tend to be happier in life..
  • Failure can be a lousy teacher, because it seduces smart people into thinking their decisions were terrible...
  • accept that you might have enough, even if it's less than those around you.
  • Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.
  • The highest form of wealth is the ability to wake up every day and say, "I can do whatever I want today".
  • "Every job looks easy until you're the one doing it".
  • Hindsight, the ability to explain the past, gives us the illusion that the world is understandable.

I hope this has given some insight into the book! I have left a link to purchase on Amazon if it's something that interests you. Let me know in the comments if you have read it and ell me what you thought!