Book review: The Psychology of Money

Book review: The Psychology of Money

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2 min read

This was a short but enjoyable read. The main point is that we are complicated creatures who have complicated relationships with money. It’s ok and expected to not base every decision off of cold Excel calculations. instead of pretending, we will, here is some of the advice he recommends:

  • Don’t try and time the market.

  • Always keep an eye on greed creeping in. make sure to avoid the psychological treadmill of keeping up with the Joneses.

  • Investing a lot when you’re younger is so important. The vast majority of Warren Buffett’s wealth is because of how early he started investing, more so than having a higher rate of return. compounding is a wonderful thing.

  • Wealth usually ends up being more about how much money you save rather than how much you earn from your job or the right investments.

  • Saving is the gap between your income and your ego.

  • Having money saved gives you flexibility in many facets of life and immeasurable peace of mind. It allows you to do what you want when you want it.

  • It’s OK to do something that gives you peace of mind even if it’s not the best financial decision.

  • Expect the unexpected. Have a 1/3 buffer.

  • To the point of not trying to time the market: Think of market volatility as a fee. You get what you pay for.

  • Remember that people, especially the media, tend to air on the side of pessimism even if things usually get better over time.

All things considered, I would recommend this book! You can get your copy from amzn.to/3i8zraF

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