The Psychology of Money Summary: Top 3 Things To Know


The Psychology of Money by Morgan Housel is full of lessons between money and human behavior. So from what we’ve learned in the book’s Blinkist version, here’s The Psychology of Money Summary: Top 3 Things To Know.


1. FINANCIAL DECISIONS ARE HEAVILY INFLUENCED BY PERSONAL EXPERIENCES

In The Psychology of Money, we learned that everyone has their own experience of the economy and money. We also learned that these experiences play an essential role in their financial decisions.

Let’s use investing as an example. If a person has invested in real estate and has earned decent money from it, chances are they’ll keep investing in it. On the other hand, if a person has found no luck with real estate, chances are they won’t be buying any more properties in the future.


2. ANALYZE THE PATTERNS OF SUCCESS AND FAILURE

Handling money is an important skill. If you want to be good at it, you’ll need to think about your money in many ways. One essential way is to be able to identify what patterns emerge from both success and failure.

In The Psychology of Money, we learned that the more common a pattern is, the more likely it applies to your life and financial decisions. So before you invest in something, make sure it has a history of generating lots of money for people.


3. NEVER BE ENVIOUS OF OTHER PEOPLE’S SUCCESS

It is in our nature to be self-centered and to be jealous of the successes of others. While it is natural to feel this way, it is essential to remember that it is not healthy for our well-being.

In The Psychology of Money, we learned that envy could make you reckless. Because being envious can cloud our judgment and make us do things that we might regret in the long run.

Furthermore, we need to always keep in mind that everyone has the potential to be successful. It just takes patience, sacrifice, and commitment.

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References:

https://www.blinkist.com/en/nc/reader/the-psychology-of-money-en

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