10 Top Lessons From the Book “The Psychology Of Money”

It's a must book for reading if you really want to understand how money works and how the behaviour of a person depends on money. Those are the changes that lead to be successful in managing and earning so much money and sometimes it lead us to losing all the money we have.

In this article I'll be sharing some great learning from the book "The Psychology of Money".

1. No One’s 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. ( Take example of today )

1. Luck & Risk

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

Luck is what happenes when preparation meets opportunity.

1. Never Enough

Life isn’t any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.
There is no reason to risk what you have and need for what you don’t have and don’t need.

1. Confounding Compounding

If something compounds, if a little growth serves as the fuel for future growth

A small starting base can lead to results so extraordinary they seem to defy logic.

1. Getting Wealthy vs. Staying Wealthy

There are a million ways to get wealthy …

❌but there’s only one way to stay wealthy: some combination of frugality and paranoia.

Getting wealthy : take alot of risks
Staying wealthy : you cannot take any risk.

1. Freedom

🟢The highest form of wealth is the ability to wake up every morning and say, ‘I can do whatever I want today.

The ability to do what you want, when you want, with who you want, for as long as you want, is priceless.

1. Man in the Car Paradox

❌No one is impressed with your possessions as much as you are. You need to keep this in mind.

1. Wealth is What You Don’t See

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

👉The only way to be wealthy is to not spend the money that you do have.

1. Save Money

Building wealth has little to do with your income or investment returns, and lots to do with your savings rate.

✅Independence, at any income level, is driven by your savings rate.

1. Tails, You Win

✅Long tails, the farthest ends of a distribution of outcomes, have tremendous influence in finance

where a small number of events can account for the majority of outcomes.

I hope these wonderful lessons would help you in your life to achieve something great you've ever wished for. Vote if you liked my article. Thank you so much for reading.