My thoughts on the Psychology of Money

March 21, 2022
Monday

Usually, I do not like Monday but today I didn't have any thought about it. Maybe I was just a little busy that the thought didn't cross me.

Anyway, Good evening ladies and gentlemen, boys and girls today I am just going to share my thoughts on a book I completed a day ago.

The book "The Psychology of Money" is normally a finance-related book written by Morgan Housel and he tries to acknowledge how money works for us and we can learn various things that can help us invest, or multiply money wisely. But, if you try to go deep into some contexts you'll also find some life hacks too.

What I learned from the book is that Money is not created in a day, it takes time, decades of wise investment, and only the people with the virtue of patience can make and handle it well. Well, this line can be taken for any relationship to work too, it takes decades of investment to finally yield the result we want out of it.

It also talks that no one is there who doesn't make mistakes with their money or with their investment. But with time they learn how to handle it more substantially. All our investments which have gone wrong or all our financial decisions we took adopted previously we did on some research and emotions and for that time it was right maybe. But, the market does not work on any single news or circumstances. So, you can never control if your investment has gone wrong or if your investment in the market failed to yield.

It talked about hedge fund managers how diversifying their portfolio and only less than 10 percent of their portfolio yielded the enormous profit they enjoy. And when we see their interview or when they make it to the Forbes list we only see that his particular investment made him so rich but what the media do not show us is that the maximum of their investment yielded just normal. And as human psychology, it kept us thinking that if we would have identified a particular stock we would have become rich.

I came about an interesting fact from the book that Warren Buffet's most of the wealth came when he crossed 60 years of his living on this earth. It can be seen how his decades of investment made him so wealthy when he was about to be a septagarian.

Some people fail to learn how to keep wealth, they make wealth but their greed of pursuing more or their immature behavior of showing lavishness leads them to bankruptcy. It also mentioned that what we call a good investment is not made by a good decision but it is made by consistently not screwing up.

Earlier I used to think of investing if investing in only stocks but it is one example of being living in the optimistic world failing to realise the rationale of pessimism. No one knows when the market is going to crash. No one has depicted the Wall Street crash of 2008 except a legend that brought millions of people into poverty. And I realised how important it is to manage our portfolio among stocks and bonds. So that when one fails the other prevails.

Some people want to save but cannot and they blabber that their spending is too much. But if you think open-mindedly you will find our ability to save is in our control more than we think we have.

It also tries to enlighten us that we need to plan and think of our own financial decisions rather than relying on someone else because they probably are harvesting a different crop than you.

At last, I would suggest this is a must-read book even to those who think they are smart taking financial decisions because there is always room for error and some knowledge from somewhere might be your messenger. Try this book.

I would like to express my gratitude for all of your support.

Thank you.