The Psychology of Money

The Phsychology of Money is book by Morgan Housel. It focuses on the role money plays in our lives and how we can change our behaviors to match our desires when it comes to money. Many view money as a simple production/consumption asset. Morgan Housel explains that we can both manage our expectations of how how much money matters, but also how to become a person more in control of our economy instead letting it control us.

He takes many examples from his own life, so that we as the audience can easily relate and apply the lesson ourselves. Some things are easier to apply than other. Like for instance the standard of living. He tells us that he and his wife got used to the lifestyle from theier 20s “not excisively expensive, but rather affordable”, and that even though their income increased, their lifestyle did not.

Other examples I could relate to completely. Like his example of “Keeping up with the Joneses”. Which in short is about not caring about how everyone else lives their life, and find a way that fits for you and your family. Don’t buy an expensive car just because your neighbor or friends did. Don’t feel like you need to attend to every dinner invite, if you don’t find it especially fun. Happiness is what matters most, and everything else comes second.
Or one of my favorite lines from the book: “Saving is the gap between income and ego”.

This book is definitely worth reading if you care about money, but are looking for some guidance. I also think people who think they know all about money should give it a read, as it easily could give you a “Aha”-moment or two.

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