âThe Psychology of Moneyâ by Morgan Housel is a book that challenges how people think about and are taught about money. Investing allows for stories of janitors outperforming nuclear engineers, and getting richer isnât necessarily about better returns. The author offers actionable takeaways by studying broad patterns and acknowledging the unknowns, incorporating nuance into our decisions, and realizing that single points of failure do exist. Additionally, success in investing is determined by how people respond to moments of terror rather than cruise control. Building wealth has more to do with saving than income or investment returns, and the intangible benefits of money can be far more valuable than the tangible. The world is unpredictable, and financial success requires humility, fear that whatâs been made can be taken away, and knowing what âenoughâ means. People make decisions based on their unique experiences, and hindsight bias often inhibits progress. Humility, kindness, and empathy bring more respect than horsepower ever will, and peopleâs outward appearances are often misleading when it comes to wealth. Lastly, the biggest gains occur infrequently, and people should avoid single points of failure and sunk costs.
