Essential Personal Finance Book

[Markola]

The Psychology of Money: Timeless lessons on wealth, greed, and happiness Amazon.com

This is not a how-to book. There are lots of those. The author Morgan Housel explores the mindset of investors, and what it takes to grow, AND PROTECT one’s money. I think ER Forum readers would resonate with the values espoused. Reading this is helping me get real about why I want to be wealthier, what my specific goals are, not just MORE. The book is a manual for pushing back on one’s internal greed so that one can avoid ruin while staying wealthy for the long run. Avoid leverage, diversify, be patient, stay humble. Every chapter is dripping with wisdom from the world’s best long term investors, but mostly it is forcing me to identify why I want it in the first place. For example:

“The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.”

People want to become wealthier to make them happier. Happiness is a complicated subject because everyone’s different. But if there’s a common denominator in happiness—a universal fuel of joy—it’s that people want to control their lives.

The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.”

Excerpt From
The Psychology of Money
Morgan Housel

‎The Psychology of Money

‎Business & Personal Finance · 2020

books.apple.com

This material may be protected by copyright.

 

[Kings over Queens]

thanks, just put a hold at the library.

 

[pacergal]

thanks, just put a hold at the library.

did the same, there are 4 holds ahead of me--must be a popular book!

 

[Love This Community]

I am surprised that some of the long timers haven't read this book already. It's a great book and would highly recommend it.

 

[Zona]

This is in my "to read" queue. Thanks for the recommendation.

 

[GrayHare]

Morgan Housel is one of my favorite financial writers.

 

[ncbill]

Got it from my library, liked it so much I bought it for my Kindle.

Wish I read t when it first came out.

 

[Koolau]

The Psychology of Money: Timeless lessons on wealth, greed, and happiness Amazon.com


“The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.”

Thanks for the resource. I hope to find a copy to read.

I've reduced the statement above to "I have enough." Simple but (to me) profound.

Thanks again.

 

[jebmke]

I note that this is available on Libby from my local library. Have tagged it to read. I'm long retired and I think a lot of people ignore the behavioral aspects (especially risk) as they approach retirement. On Bogleheads I see a lot of "I'm comfortable with high risk and didn't panic in 2008." The game can change dramatically when you step off the curb into retirement -- you may not know how you will react. In addition, "not panicking" is great but may be insufficient to ensure happiness.

Wife and I discussed extensively prior to ER. "not panicking" was one thing to avoid but also, we wanted to ensure we didn't spend our retirement worrying about money OR if the SHTF, having to hunker down and not spend while weathering the storm.

Arguably, we could have taken more risk and we would now be wealthier but hey, we have enough to get in the ground without compromising our lifestyle. And we are being compensated fairly by our investments given the risk we have incorporated into the portfolio.

 

[FIYes]

Thanks to the recommendation on this thread, I checked out the book from my local library using Libby. It was an interesting read. I think one aspect of money that the author discusses and that will resonate with this group is that money can buy you independence.

 

[Zona]

This is in my "to read" queue. Thanks for the recommendation.

Oh my goodness, I just checked my Goodreads and I guess I read this nearly two years ago! (gave it five stars, even!). It is Housel's newer one "Same as Ever: A Guide to What Never Changes" that is in my queue now.

Agree with what was said above, Morgan Housel is a good writer and "The Psychology of Money" was excellent. I looked at my highlight notes in my copy and one sentence that really resonated with me was in the chapter on Freedom: "Controlling your time is the highest dividend money pays". Equally insightful was the short chapter right after that which was about how "people generally aspire to be respected and admired by others, and using money to buy fancy things may bring less of it than you imagine" because they are admiring the fancy toy, not admiring you.

Housel frames things in very easy-to-understand ways and you nod along as you read.

 

[TickTock]

On Bogleheads I see a lot of "I'm comfortable with high risk and didn't panic in 2008." The game can change dramatically when you step off the curb into retirement -- you may not know how you will react.

Yeah. Not panicking during a downturn when earning a good salary and stuffing earned income money into the portfolio, buying stuff on sale is vastly different than the same downturn when you have no means of replenishing the portfolio...

 

[DrRoy]

I feel like I may have already lived this. My favorite book along these lines is "Your Money and Your Brain" by Jason Zweig. It helped me get along during the Great Recession market.