While currently navigating this difficult job market, I have been working on strengthening my knowledge and develop new skills and what a better way than filling some time in with some reads I have delayed. The whole purpose of this book is to show how intelligence or how smart you are today plays little role in how you behave, simply put that soft skills are more important than the technical side which been followed for centuries now. I’ve been waiting for this book for a while now and it did not disappoint. There is a countless number of books available that share financial literacy and knowledge and I even wrote a post on personal finance books you must read in your 20’s, but there’s one that I happen to read recently that really got my full attention because it is actually pertaining to the current events when applied and what is happening in the markets and our economy today. Best part of all is this book just came out in September of 2020, so the information and fundamentals are based on recent methodology if properly correlated.

Biggest Reasons Why You Should Read This Book:

  • Unlike other financial books, this one does not dish out a certain strategy, tactic, or formula to have successful financial literacy.
  • This book covers a lot of information that resonates in everyone’s life when dealing with money (we do every day, most of our lives!).
  • After fully digesting the book, you are guaranteed to look at certain things in your life and life around you differently.

My  3 favorite quotes from the book: (scroll down the post for more)

“Young people pay good money to get tattoos removed that teenagers paid good money to get. Middle age people rush to divorce people that young adults rushed to marry, older adults work hard to lose what middle aged adults worked hard to gain, on and on and on.” – Morgan Housel

“If you think recession is coming and you cash out of all the stocks in anticipation, your view of the economy will suddenly be warped of what you want to happen, every little thing will make it seem like doom has arrived.”- Morgan Housel

“There’s no greater force in finance than room for trial and error“. – Morgan Housel

The Book

(The Psychology of  Money – Timeless Lessons on Wealth, Greed, & Happiness)

First things first. The book is not just “another book” that only covers finance filled with suggestions and recommendations on where to start and end. The book covers the most important aspect which I believe humans face and it is behavioral finance and best part of all is you can actually relate this book to current events in the stock market and our economy just in the past year.

Money―investing, personal finance, and business decisions―is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world people don’t make financial decisions on a spreadsheet. In real world decisions are made at dinner tables, friends gathering, rumors heard where in reality your own personal factors play like your experience, ego, your view of the world, and everything that might make no sense to others. This book really share short stories and experiences to really make sense of why people do what they do.

Why I Think You Need to Read This Book Especially Now

Keep in mind that over 95% of Warren Buffet’s wealth came after the age of 65, we associate investing money as the level of intelligence one have about it and how much they have been able to accumulate, but how come many people didn’t even know what crypto was until about last 6 months? Why do you think people are now gambling with their own money trying to catch something that already happened and the mentality of chasing same thing (stock, industry, even the economy) over-and-over is something that became all of a sudden a trend? How about the same pattern hedge funds have been able to make money for decades now and now that strategy is changing up? It really all reflect in the same patterns, everything has ending and won’t last forever.

In today’s ever changing world people are still relying on all the same fundamentals of finance when really what makes one successful today is really the behavior. Finance is different from physics, where physics is controversial, but finance is really in the end guided by people’s behaviors. You could argue this point with me just 10 years ago, but today once you see the bigger factors today and its influence, then you will find the same pattern everyone follows and avoid it, you will set yourself apart from the masses. A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy. What makes one’s story successful is not the same pattern they followed, but what they’ve done different about it.

Bottom Line

I do not like covering spoilers for books and therefore I did not share much information or a full review – as the book is particularly new and this is one of those books, one should read once and then again, and again to really understand the meaning and purpose behind it. You know when they say “think outside the box“? I mean this is really what makes any idea, project, or business to really strive and become unique and applies to everything. See, some people were prepared for certain stocks and invested way before, what about crypto? Nobody told you you could put $1,000 in dogecoin on January 1st and on may 5th have around $120,000. Bitcoin? Same story, even though there really is nothing about that backs up the cryptocurrency, it is safe to say that hundreds of millions of people all of a sudden saw an opportunity to purchase based on their own behavior and trend they follow.

Most Notable Quotes from the Book

“Historical odds of making money in us market 50/50 over one day period, 68% in one year, 88% in 10 year, 100% in 20-year period, so anything to keep you in the game is a quantifiable advice”

“Intelligence is not a reliable advantage in a world that has become flexible as ours have”

“Savings is a hedge against life inevitable ability to surprise the hell out of you at the worst possible moment”

“The ability to do what you want, when you want, with whom you want, and for as long as you want and is the highest dividend money pays”

“Greed is an indelible future of human nature”

“A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence”

“To grasp why people bury themselves in debt you don’t need to study interest rates; you need to study the history of greed, insecurity, and optimism”

“People do some crazy things with money. But no one is crazy”

“Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works”

“We all do crazy stuff with money, because we’re all relatively new to this game and what looks crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.”

“Luck and risk are siblings. They are both the reality that every outcome in life is guided by forces other than individual effort”

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

“No one is impressed with your possessions as much as you are”

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

 

 

You can purchase the Book Here or click on image below!

Don’t forget that you can get a FREE stock valued up to $500 by using my link to sign up for Robinhood. You can also read my post on Robinhood

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