"The Psychology of Money" , despite the inclusion of the word 'money' in its title, is not a guide on "how to get rich". And that is perhaps why I found this book to be incredibly insightful and intriguing.
This book does not deal in the specifics of finance, or the stock market. It focuses on how our mannerisms, our experiences and circumstances greatly influence the way we peruse and spend money. In fact, our behaviour is the most important factor which governs our wealth. This is owing to the fact that our behaviour is something which we can consciously, and voluntarily change. Ironically, it is onerous for even the most adept of investors to modify their behaviour and discipline. The chapters in this book guide you through the numerous psychological and sociological aspects which ascertain your wealth. I like that this book was able to educate me on matters in money, without boring me with statistics and figures, and instead focusing on what intrinsically matters.
The language in which this book is written is simple and engaging. In various instances, the author cites examples from everyday life and other fields, or utilises real-life analogies in order to explain concepts in finance. I do not consider myself to be financially savvy, but I was able to comprehend all the information contained within this book, and found it all quite fascinating.
Many books narrate success stories, and prompt us to attempt to emulate that success. However, this book encourages us to analyze averages, rather than a few outliers. It acknowledges that luck and risk do play a considerable role in determining one's fate and wealth. This perspective is typically not expressed in many books. The candour with which his book is written had me quite impressed.
I liked that one of the central messages of the book was that the greatest return money guarantees is freedom - to do whatever you want, with whoever you want for however long you want. Consequently, the book emphasises on judiciously spending money, not in order to be able to afford luxuries, but because of the independence it assures.
Another salient message in this book is that everything is uncertain in the world of finance, because it is directly influenced by human beings and their caprice. No matter how much data we accumulate, it is impossible to determine exactly the probability of anomaly events, like the Depression. This acceptance that we cannot be sure about everything is refreshing.
I am uncertain whether everyone will concur with me on this, but from reading this book I have accrued insightful financial advice, and have been inspired to start managing my personal finances better in the future. I have realized that the importance of money transcends beyond the acquisition of material wealth.
This is the perfect book for people who are acquainting themselves with finance, or for people who have absolutely no idea about it. Even if you are already well-versed in the details and procedures of finance, this book provides a new and stimulating perspective.
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