I read one of the BEST finance books so you don't have to.
Here are the biggest lessons:
Here are the biggest lessons:
1. No one cares about your car (or other fancy toys).
If you think people will respect or admire you because of the cool stuff you own, you are almost always wrong.
Time & time again this is said. People care about how you make them feel, not the car you show up in.
If you think people will respect or admire you because of the cool stuff you own, you are almost always wrong.
Time & time again this is said. People care about how you make them feel, not the car you show up in.
2. Real wealth is invisible.
When someone owns a fancy house or a cool car, what we see is not their wealth but simply the money they’ve spent, which is the opposite of wealth.
The key to becoming wealthy is NOT spending your money, rather it is saving/investing it.
When someone owns a fancy house or a cool car, what we see is not their wealth but simply the money they’ve spent, which is the opposite of wealth.
The key to becoming wealthy is NOT spending your money, rather it is saving/investing it.
3. The hardest financial skill is getting the goalpost to stop moving.
You have to know when enough is enough.
Read the story about Bernie Madoff. Never knowing when you have "enough" could lead to your quick downfall (or loss of wealth).
You have to know when enough is enough.
Read the story about Bernie Madoff. Never knowing when you have "enough" could lead to your quick downfall (or loss of wealth).
4. Getting wealthy & staying wealthy are different things.
Getting money requires taking risks, being optimistic, and putting yourself out there.
Keeping money requires the opposite. It requires humility, and fear that what you’ve made can be taken away from you just as fast.
Getting money requires taking risks, being optimistic, and putting yourself out there.
Keeping money requires the opposite. It requires humility, and fear that what you’ve made can be taken away from you just as fast.
5. Never underestimate the power of compound interest.
99.7% of Warren Buffett’s wealth has came after he turned 52 years old.
If Buffet had started investing at age 30 instead of 10 years old. Instead of the $95.6 billion he has today, he would be worth "only" $11.9 million.
99.7% of Warren Buffett’s wealth has came after he turned 52 years old.
If Buffet had started investing at age 30 instead of 10 years old. Instead of the $95.6 billion he has today, he would be worth "only" $11.9 million.
6. Play your own game and stick to it.
Beware taking financial cues from people playing a different game than you are.
If you are a long term investor, don't worry about the advice of a trader. You are playing different games & that is okay!
Beware taking financial cues from people playing a different game than you are.
If you are a long term investor, don't worry about the advice of a trader. You are playing different games & that is okay!
7. Save, save, save.
Saving is a hedge against life’s inevitable ability to surprise the hell out of you at the worst possible moment.
You don't always need something to save for... just save.
Having savings gives you options that NOT having savings doesn't.
Saving is a hedge against life’s inevitable ability to surprise the hell out of you at the worst possible moment.
You don't always need something to save for... just save.
Having savings gives you options that NOT having savings doesn't.
8. Nothing is as good or as bad as it seems.
Nothing is ever as good as it seems because of the amount of luck that was probably involved.
Also, nothing is ever as bad as it seems because of the level of risk (bad luck) involved.
Focus on broad patterns.
Nothing is ever as good as it seems because of the amount of luck that was probably involved.
Also, nothing is ever as bad as it seems because of the level of risk (bad luck) involved.
Focus on broad patterns.
9. Room for error is key.
The more you need specific elements of a plan to be true, the more fragile your financial life becomes.
The person with room for error in their strategy for hardship has an edge over the person who gets wiped out when they’re wrong.
The more you need specific elements of a plan to be true, the more fragile your financial life becomes.
The person with room for error in their strategy for hardship has an edge over the person who gets wiped out when they’re wrong.
10. "Tails, you win."
A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy.
If we can manage to stay sane during tail events like recessions, we will have much better results in the long run.
A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy.
If we can manage to stay sane during tail events like recessions, we will have much better results in the long run.
The Psychology of Money is definitely one of the top books I have read about building wealth.
Once you understand the behavior side of money, many things are possible.
If you don't already, be sure to follow the author of the book @morganhousel!
Once you understand the behavior side of money, many things are possible.
If you don't already, be sure to follow the author of the book @morganhousel!
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Thanks for reading!
- @DecadeInvestor & @ZzzMoneyClub
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Thanks for reading!
- @DecadeInvestor & @ZzzMoneyClub
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