The Psychology of Money was written by Morgan Housel. It is an outline of psychological instructions for handling money. The proper handling of money. It is defined not by your intelligence, but by your financial behavior. Even geniuses can lose money. Similarly, an ordinary person can become wealthy with money at times. Like showing off your wealth . Spending money foolishly and unnecessarily, and as a result, such people become bankrupt, that is poor. The main reason for this is that such people are unable to understand the value of money and hence end up losing it. There are many ways to become wealthy. However, there is just one way to keep your wealth. We must understand the value of money.

The Psychology of Money Mindset

The author gives a few specific suggestions for the younger generation. If you don’t want to spend your entire salary on entertainment, you should cut back on unnecessary spending. After making some initial plans for the future, you must create a financial plan and set aside funds for your family and children.

“Money’s greatest intrinsic value – and this can’t be overstated – is its ability to give you control over your time.”

It has been observed that everyone has their strategies for handling money. People handle money with their understanding. This is why some wealthy people lose money quickly, while others become wealthy quickly with little money.

Chapter 1: No one’s crazy

Each of us can only experience a little portion of life. We believe we understand how the world works because of this experience. However, anything we experience in life is determined by our circumstances, conditioning, and a variety of other factors.

For example, a person who grew up in poverty has a different perception of risk and reward than a person who grew up in wealth.

In the year 2006, the National Bureau of Economic Research conducted a study with the data of the last 50 years to see on what basis people take risk.

He discovered that a person’s risk-taking aptitude is determined by his personal past rather than his education and intelligence. Everyone’s financial decision is unique.

This is entirely dependent on the circumambulation stance and experience. People make financial decisions just on the basis of the facts available to them.

Chapter 2: Luck and Risk

Luck and risk, according to Arthur Morgan Housel, are brothers. Both of them are proof of reality. Every outcome in life is determined by human efforts as much as luck. Which risk is also connected?

Let us examine this via the view of the story told by Morgan Housel in his book. He writes that in 1968, when Bill Gates was in school.

At the time, 300 million students like him were enrolled in high schools around the world. Lakeside School, where he used to go to school. The financials were excellent. He also had a computer that he used to instruct the children.

Bill Gates was the lucky student of that era who had the opportunity to master computers. Bill Gates stated this at an occasion. My company, Microsoft, would very likely not exist if Lakeside School did not exist.

In this way, many factors contributed to Bill Gates’ success. But one of them was Luck. Bill Gates discusses his high school classmate Kent Evans. If Kent had left school with me. So today he would have been the founder of my company Microsoft. But he continued his studies and died while mountain climbing.

He faced the risk that one in a million does. Because millions of people go mountain climbing. But only one of them dies. This is how author Morgan Housel describes luck and risk.

That is, Bill Gates’ success is due to his good fortune. However, aside from luck, there are numerous other aspects that contribute to success. Such as efforts, hard work, decisions, working on proper advice, and so forth.

Chapter 3: Never Enough

Kurt Vonnegut and Joseph Heller were American writers. They once attended a big party together. Kurt informed Joseph that the host of this party is a fund manager who earns a lot of money in a day.

As much as Joseph has never been able to earn with his world-famous novel. Hearing this, Joseph replied, “Yes, that is correct, but I have something that he will never have.”

That is all. No matter how much we have, the human mind tends to seek more. But we still judge ourselves against others. And always covet what others have.

Enough here does not mean that you become happy in very little and spend your life in difficulties, but here enough means that you should know how much money will be enough for you. Instead of just running after money.

There are such things as reputation, freedom, family, friends, love, happiness, etc.… some things are leaving and it is foolish to just pursue earning money.

Chapter 4: Confounding Compounding

If we define compounding in simple terms, we can say that compounding is reinvesting the earnings from any investment. Along with the principal, you get interest on his investment in this.

Warren Buffett’s entire net worth was $ 84.5 billion at the time this book was written, with $ 81.5 billion coming after his 65th birthday. Warren Buffett began investing at the age of ten. They would not have received the same profits if they had begun investing after the age of 30.

And because compounding does not require time to replace it, their entire net worth is merely .9 million rather than .5 billion.

Warren Buffett is successful not because he was an excellent investor, but because he has been a very good investor over a long period.

Chapter 5: Getting wealthy versus staying wealthy

A little madness and discipline are necessary to maintain wealth. Like Liver More, he was an American trader. Lever More made more than a billion in profit during the 1929 Grade I Depression when investor capital was disappearing globally.

But even after that, he continued to place riskier and riskier wagers, and within four years, he tragically lost all of his money and committed suicide. Many people, including Liver Peacock, can earn more money, but they are unable to keep it safely.

Earning money requires taking risks, being optimistic, and believing in yourself. To save money, you must avoid taking large risks, become more economical, and accept that luck will play a role in your success.

Being economical here does not mean living like a pauper, it just means that you do not spend your money unnecessarily and do not show off.

Chapter 6: Tails you win

It is not necessary to win if you toss the coin once. However, if you toss it often, there is a chance you will be successful. Similarly, keep doing any work again and over. You don’t get it perfect the first time.

If the company fails for the first time, try again. And don’t give up until you succeed. If you have a platform like this, continue to publish until it succeeds. Then decide whether it will take a year or two years and keep going.

Chapter 7: Freedom

The ideal form of wealth is the ability to do whatever you want. Angus Scam Bell was a psychologist at the University of Michigan. He researched to know what is that thing that gives real happiness to people.

In his research, he discovered that everyone desires different things, but one thing is universal, everyone wants ultimate control over their lives. To be happy, you must have complete control over your life. This is more important than a high salary, a large house, or an esteemed job.

When you make yourself do something against what you want. So it’s clear that you dislike your job. Even if you do your favorite task in a controlled environment, you will get bored with it.

Carl Palmer, an American sociologist, interviewed thousands of elderly people and asked them what key lessons they had learned during their lives.

Almost all of them talked about making good friends and spending quality time with their families rather than working hard and earning more money.

Chapter 8: Man in the Car paradox

It’s strange. When we see an expensive car, we exclaim, “Wow, what a cool car!” We never complement its owner. Also, avoid saying things like, “That’s amazing such a nice person.” The same thing will happen to us. People will only praise the car if we too acquire such an expensive car. It is not ours. They will just feel unhappy for us.

So don’t go after materialistic goods so much. If you have more money, use it to gain more experience. Help someone, go for a walk, and so on. With which you will create memorable experiences. And this is the secret to real pleasure.

Chapter 9: Wealth is what you don’t see

We examine someone’s wealth based on what we observe. He is wealthy if he can afford a Lamborghini. In addition, he has a home, college debts, and debt. Despite this, he spent a significant portion of his salary on the Lamborghini. And obtained a loan for the car.

The differences between being wealthy and being rich go beyond simple semantics. Your current income and the riches you have accumulated and created make you rich.

Chapter 10: Save Money

When it comes to saving, there are three different types of people. They don’t need to save for what they first believe. Other people who believe they cannot save. Last but not least, those who were saved.

The third grew to be extremely affluent over time. His aging process is painless. The other people, however, live in abject poverty for the rest of their days. And rely on other people. They naturally turn bitter as well. Therefore, start saving today. Invest the remaining earnings after that.

Chapter 11: Reasonable versus Rational

Some people focus only on their ideas without working to put those thoughts into action, which leaves them helpless in the end. They aim for perfection in all of their work and choose to leave it at that if it has the smallest flaw.

Better than this, you should take that action whether or not your plan will be successful. It is better to begin that work, even if there is a minor flaw, rather than thinking about starting any company.

Similarly, you should start investing as soon as you can in the stock market, even though there are ups and downs because you ultimately turn a good profit.

Chapter 12: Surprise

Always be prepared for life’s unexpected twists and turns. You can receive a surprise with similar funds. Before Corona, a lot of people were making excellent lives on the stock market.

However, all of a sudden, Corona arrived, and the market collapsed. There were numerous losses. But subsequently, the market jumped once more.

Similar to this, a business that you consider to be excellent will fail if it falls victim to a scam. You risk losing money as well. So, stay alert at all times.

Chapter 13: Room for Error

Everyone makes mistakes in life when it comes to money, but we can learn a lot from these experiences. You should carry extra cash with you and avoid investing or spending all of your money at once to prevent making such errors.

Cash is king, as Warren Buffett appreciates to say. To be prepared for terrible times, you should always keep a fund.

Chapter 14: You’ll Change

Every person changes over time. A naughty child grows up to be a responsible adult. Similar to today’s dreams and aims, tomorrow’s aspirations may not come true. But we can also try something new in the future.

Don’t dwell on the past. Don’t think that you got poor grades in high school or college. You didn’t do well in school. It makes no difference. Your future isn’t impacted by your past.

Anytime you choose, you can design your future. Anyone can launch a small company and make millions of dollars at any time. As a case study, the owners of the Kulhad Company are making millions merely by opening tea franchises.

Even physicians don’t make that much money. And what value do your marks have in the tea business? Get rid of the garbage that society has implanted in your mind as a result. Study actual books. And learn new things.

Chapter 15: Nothing is free

We are all aware that money is required to make money, nothing comes for free. If you don’t have enough money to start a business, start by doing some side work and then invest in it.

Many such superstars accumulated wealth by performing minor tasks, and their names are now famous all over the world. Nothing comes for free, so get to work.

Chapter 16: You and me

Money can never be gained or spent alone, you need the support of others. Even if you are an introvert, you must learn how to deal with business with others.

Give yourself as much importance as you do others, and learn to appreciate others. Good and intelligent people need respect, never show your ego.

Chapter 17: The seduction of pessimism

It’s good to be optimistic. Everyone advises us to be optimistic. However, blind optimism is useless. It also drowns us. Will it happen if a child does not study but hopes to pass? Will someone who lacks talent and goes to Bollywood achieve only based on hope? That is why pessimism is also required. Determine which tasks will be challenging to do.

Then continue to work hard to improve your skills in it. That is why it is important to find a balance between optimism and pessimism. Only then will you achieve success.

Chapter 18: When you’ll believe anything

There is always something wrong with our ability to hear, think about, and know, just as many people believe everything they hear in the news to be true.

While most of those things are under control, many news stories are incorrectly published in newspapers, so don’t believe everything you read and see.

Chapter 19: All together now

Always be humble. Don’t nurture your ego. Make financial decisions that will provide you with mental tranquility. Recognize the power of time.

Nobody becomes wealthy overnight. Accept failure as a part of life. Never quit. Make it a habit to invest. Despite his wealth, he maintained a spiritual attitude.