By – Morgan Housel

I have read many books on personal finance and money investments. I never have came across a book as interesting as “The Psychology of Money”. There are 20 chapters in the book and each of them has a valuable message. The book is interesting in many ways. First, it conveys many complex concepts in straightforward terms. For example, a concept like “Bubble” which is often discussed in the world of finance is described by Housel as “The formation of bubble isn’t so much about people irrationally participating in long term investing. They are about people rationally moving towards short-term trading to capture momentum that has been feeding on itself”. This is just one example. The book is full of pearls of wisdom. The best quote i have encountered “The only way to win in a casino is to exit as soon as you enter”.

Example of some amazing insights that the book provides. This book also talks about the difference between getting wealthy and staying wealthy. The author talks about preserving wealth. He says that many people acquire wealth but fail to preserve wealth and hence it is important to learn how to preserve wealth. The author also says ” maintaining wealth requires decency & worry that what you may have created can be taken away. The author also talks in detail about the role of luck in investing in many places in the book.

The author keeps on surprising with wonderful understanding of money in different chapters of the book. However, the exclusive chapter on saving, which is chapter 10, has many interesting aspects about savings. Emphasizing the importance of savings, the author says “The first idea- simple, but easy to overlook-is that building wealth has little to do with your income or investment returns, and lots to do with your savings rate.” He adds that you do not need a specific reason to save. He has also mentioned an eye-opener. Past a certain level of income, what you need is just what sits below your ego. The author also highlights the need for knowing what is sufficient, when it comes to money.

In brief, you must read this book regardless of how much you understand about money. There is something for everybody in this book.