Congratulations! You've unlocked a 50% discount.

Thanks for visiting sumizeit.com. As a new user, you can use coupon code WELCOME for a 50% discount off a premium subscription.

TIME TO CLAIM

Star

New Feature! Download infographics with key insights from bestselling non-fiction books.

Download Now

The Psychology of Money Book Summary

Book Summary

By Morgan Housel




15 min
Audio available

Brief Summary

People make real-world financial and investment decisions based on their beliefs and life experiences, not on hard math or data. Risk, luck, and skill also shape an individual’s chance for financial success. To achieve financial success, make a reasonable plan that focuses on compounding annual gains over time. Be ready to adapt when the markets inevitably change and don’t allow greed to distract you from your goals. Everyone will have different investment techniques, and the key is to choose the plan and techniques that will give you the greatest chance of reaching your personal financial goals.

About the Author

Morgan Housel is an author, partner at Collaborative Fund, and former columnist at The Motley Fool and The Wall Street Journal. He has been awarded the New York Times Sidney Award, the Best in Business Award from the Society of American Business Editors and Writers, and was a finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism.


Topics

The Psychology of Money Book Summary Preview

What You’ll Learn

  • The dangers of being greedy and trying too hard to appear wealthy through fancy materialistic purchases
  • Why people are prone to economic and financial pessimism
  • How to develop a unique investment strategy while still allowing for change

Who Is This For

  • Individuals hoping to improve their investment strategy
  • Families who want to learn financial techniques to help them reach their long-term financial goals
  • Individuals looking to gain a better understanding of the psychology behind why people make the financial decisions they make

Key Insights

Many factors shape an individual’s view of money, including their life experiences, their childhood, and their status in life. People will ultimately make their investment decisions based on their personal experiences. Risk and luck also play a big part in determining if an individual will become successful or not. Many people are driven to always be striving for more, even if what they have is already enough, but greed can make people lose perspective on what really matters in life. Remember that money is not the key to happiness. Most people are happiest when they feel that they are in control of their own lives.

The key to getting wealthy is compounding. Allowing small annual gains to add up over time is the most important step to achieving financial success. To stay wealthy, stay humble, don’t take unnecessary risks, and have a plan for when things go wrong. Humans are inherently irrational beings, so try to aim to make reasonable decisions, but don’t be concerned with being overly rational. Make a plan, but be ready to adapt as things inevitably change. In investing, there is always a chance something will go wrong. Everyone will have their own view of the economy, and these stories will ultimately shape how they invest their money. It is important to choose the best investment techniques that make the most sense with the kind of life you want to live and align most closely with your personal goals.

Many Factors Shape People’s Financial Decisions 

Everyone will have a different view of the world, based on their individual experiences, status, childhood, and other factors. This includes how people view money. Therefore, people will most often make their investment and finance decisions based on their personal experiences, rather than always choosing the most financially rational decisions that will get them closer to their goals. For example, people who have less money are more likely to purchase lottery tickets than wealthy people, because it is one of the few ways they can imagine achieving financial freedom and wealth. Many people do not make sound investment decisions simply because they do not understand the financial concepts they require, because these concepts are still relatively new and many people do not have enough experience with them to truly understand them.

Luck also plays a big part in how people become financially successful. This is why emulating wealthy people is not always the key to success. For example, Bill Gates is undoubtedly smart, but he was also lucky that he was...

Please login to access the full text and audio summary for FREE

Users get access to two FREE summaries. Become a pro user for unlimited access.

Login
Congrats! You've unlocked a 50% discount. Use coupon code WELCOME for 50% off Sumizeit Premium.

Save time with unlimited access to text, audio, and video summaries of the world's best-selling books.
Become a pro user

book summary - The Psychology of Money by Morgan Housel

The Psychology of Money

Book Summary

15 min
Read now Download PDF Take a Quiz Infographic

More Like This

Learn Something New Every Day with Sumizeit

Here’s Why Sumizeit Is Worth It

Try Sumizeit to get the key ideas from thousands of bestselling nonfiction titles. Listen, read, or watch in just 15 minutes.

High-Quality Titles

Highest quality content

Our book summaries are crafted to be unbiased, concise, and comprehensive, giving you the most valuable insights in the shortest amount of time.

New book summaries added constantly

New content added constantly

We add new content each week, including New York Times bestsellers.

Learn on the go while commuting, exercising, etc

Learn on the go

Learn anytime, anywhere - read, listen or watch summaries on IOS, tablet, laptop, and Kindle!

You can cancel your subscription anytime

Cancel anytime

Changed your mind? No problem. Cancel your subscription anytime.

Collect awards while learning

Collect Achievements

Learning just got more rewarding - track your progress and earn prizes using our mobile app.

Sumizeit provides other features as well

And much more!

Improve your retention with quizzes. Enjoy PDF summaries, infographics, offline access with our app and more.

Our users love Sumizeit

Join thousands of readers who learn faster than they ever thought possible.

4.6 out of 5

400 ratings on
Apple Store

Quality
As featured in
  • icon
  • icon
  • icon
  • icon

People ❤️ SumizeIt

Olga Z.

I love this app! As a busy executive, I don't have time to read entire books, but I still want to stay informed. This app provides me with concise summaries of the latest bestsellers, so I can stay up-to-date on the latest trends and ideas without sacrificing my precious time.

Chen L.

Very good development in last months. Content updates on a regular basis and UI is getting better and better.

Erica A.

Great product. Have used them for a long time. One of my favorite things about them is that they are able to summarize a whole book into just 10 minutes.

William H.

This app has been a lifesaver for my studies. Instead of struggling to finish textbooks, I can quickly get the key points from each chapter. It's helped me improve my grades and understand the material much better.