Why I read it?
The title of this book was interesting to me, and a coworker had recommended it. When speaking with people about finances I find myself anchoring to my own personal experiences related to money, so I wanted to see how Morgan Housel unpacked these thoughts on a larger scale.
What is it all about?
The book examines how the human mind, individual behaviors and experiences play a role in a person’s view of money.
What caused me to pause?
Two things jumped out and prompted me to take notes. They are foundational concepts that make a huge difference in successful financial planning. The first was “savings rate”, or the portion of your total compensation that is directed to savings – ie: building up your emergency fund, 401(k), etc. This is what you have the greatest control over and will be the single largest driver of meeting your goals for financial independence. The second was the power of compounding interest and the struggle for the human brain to grasp this concept. 98% of Warren Buffett’s net worth has been accumulated since he turned 50. If an investor can put their money to work and not interrupt compounding, there is a high probability of long-term success.
How will this book change my habits or influence me?
We all have unique past experiences related to money, and they play a powerful role in our current thoughts around investing. It is important to place these experiences in the backseat and make money/investment decisions based on goals and rational expectations, rather than choices driven by emotions.
Add this to your reading list if …
You’re looking for a quick, engaging read that dives into what’s below the surface of people’s thoughts about money.
Pickle Rating: 4.75/5