The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

“The premise of this book is that doing well with money has a little to do with how smart you are and a lot to do with how you behave.” sets the tone of the book. Morgan Housel shares a string of stories from around the world wherein he proves his ideas for saving and managing money. It is years of practice that later becomes one’s natural habit to identify patterns in savings and investments – the assiduity which goes in determining the actions and the reactions to money earned or saved, or getting gifts from others. The book talks volumes about preservation of wealth, correct pursuit of monetary happiness. This is a book which I wish I had read in my early 20s then probably I would have had a changed perspective towards

“Spending money to show people how much money you have is the fastest way to have less money.”

“Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.”

Morgan says to save money according to the goals. In the book, he describes that the goalpost should however be dynamic and should move further away as you are almost close to it, that way it will be easy to determine the priorities on where money needs to be spent. When it comes to the adopted habits, it is better to have a clear idea. One should always ask oneself :

1. Is money going to enable your happiness?
2. Is money enough to secure the future and have stability?
3. Is the money enough for comfortable living or an ultra-expensive lifestyle?
   

“There is no reason to risk what you have and need for what you don’t have and don’t need.”

To sum up, saving money and accumulating wealth are two different goals. Years of self-disciplined regime in saving money may help you to accumulate wealth, it may help you to achieve the level of financial security you have been striving for. As much as, with time, different purposes may add to the list and the goals will keep evolving. Often unforeseen expenses also derail us from our targets. Consistency is the key to success.

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