54 pages 1 hour read

The Psychology of Money

Nonfiction | Book | Adult | Published in 2020

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Summary and Study Guide

Overview

The Psychology of Money is a bestselling 2020 book by American finance expert Morgan Housel. Housel’s book examines people’s financial decisions through the lenses of history and psychology. Housel argues that financial management is a relatively new phenomenon that everyone approaches differently depending on their personal experiences, beliefs, and biases. According to Housel, people who do not have a formal financial education can still succeed financially by learning the “psychology of money” (9). Housel uses historical anecdotes to illustrate how people’s relationship with ego, risk, patience, and effort can make or break their financial success and ends each chapter with a recommendation to the reader. The author urges the reader to plan for the future by holding long-term diversified stock portfolios and allowing them to compound, saving for the future, and operating with a margin for error. He also warns against an egotistical approach to finance, recommending that readers forgo spending on flashy status symbols, avoid extreme risk-taking, and maintain a humble and wary attitude about the future.

This SuperSummary guide uses the 2020 Harriman House Kindle edition of The Psychology of Money.

Summary

In the Introduction, Housel contrasts two American men with vastly different lives and financial outcomes.

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