The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness.
| Author | Chauhan, Vinit Singh |
The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness by Morgan Housel JAICO PUBLISHING HOUSE INDIA 2020, Pages: 241, Price: 399 ISBN: 978-93- 90166-26-8
The book, as the author claims, focuses on the behavioral aspects of money and not the technical aspects as is the current trend. Financial success is a soft skill; it is about knowing how to behave with money. In this book, spread across twenty chapters, the author has cited examples in a story form, trying to convince readers that soft skills are more important than technical skills. For instance, when a rich man wants to remain rich, he has to control his emotions; otherwise, he won't be able to remain rich for long. Money in fact, is one of the two topics (health and money) that have a bearing on everyone. Money matters have always confused people due to their lack of focus on the 'psychology of money'. Experts on the other hand, have always focused on the 'technical aspects' of money; however, focusing on the psychological aspect too, would help in resolving flaws, biases, and causes of bad behavior, which invariably result in bad financial decisions.
Chapter one of the book titled 'No ones' crazy'; essentially talks about 'understanding money'. In other words, each one of us has his/her understanding of money. This understanding in turn, is based upon individual experiences, especially during the formative years of life. Investment decisions that people make is greatly influenced by this experience. The next chapter has been titled as 'Luck and Risk'. Herein, the importance of luck in one's success has been highlighted. In fact, to drive home the point, the author has used Bill Gates' life history as an example, affirming thereby that both luck and risk are inseparable, and it is hard to pin down upon one while speaking about one's success. When luck is not in one's favor, one should learn to handle failures. In the third chapter 'Never Enough', the author uses the example of Rajat Gupta, a millionaire, who was found guilty of insider trading. This example was given to drive home the point that despite having good fortune, people find it difficult to say 'enough' to money. The author goes on to affirm that if one needs to be satisfied and contented in life, one must develop a sense of 'enough'. Possibly the hardest financial skill to acquire while discussing money is to stop moving one's goalpost; one should know when to stop taking 'risks', while saying to oneself 'enough'. The fourth chapter 'Confounding Compounding' begins by...
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