The Psychology of Money by Morgan Housel

BOOK REVIEWS BY BINOD

BINOD’S RATING: 8.5/10

What a revelation!

It isn’t about correlations or CAPM or DCF models. There is no math or formulae.

Instead, it’s an invaluable tutorial about REALITY, about what happens in your head when you (mis) manage your finances. It’s what you’ll NEVER learn in college or in the CFA program (they should include it in the curriculum).

Before you drawl “That’s boring” or “I’ve read Behavioral Finance” I assure you it’s a brilliantly written work full of anecdotes & stunning facts that has as much in common with Thaler’s & Kahneman’s big, dry books as chalk has with cheese. I was underlining every other para.

You’ll pick up the importance of these (among others) in investing- experience, luck, happiness, humility, ego, risk, compounding, flexibility, history, control, change, goals, volatility, consistency, room for errors, optimism, outliers, calmness, freedom & why you shouldn’t give a damn what others think of you. You’ll find it’s on life as well.

I’ll always have this on my desk for ready reference because all too often we forget the basics. Given that most (irrespective of education or experience) ignore their personal finance, I suggest you do so too.