Introduction
Morgan Housel’s The Psychology of Money has sold over two million copies. It’s in the top ten Business and Personal Finance books in Apple Books and is considered one of the best finance books of 2022 by Intelligent. The reason it’s so popular among readers and business people is because of its engaging stories, business-like tone, and approach, and because it doesn’t use complicated formulas to understand money. The purpose of this book is to help you better understand the relationship between people and money. Knowing the relationship between these two concepts will help you make better investments in the future and control the income you have now. This book review will discuss all the great and bad things in The Psychology of Money by Morgan Housel.
Book Information and Rating
Author: Morgan Housel
Cover Art by: Morgan Housel
Published by: Harriman House
Genre: Finance
Print Length: 256 Pages
Cinemabooks rating: 7/10
About The Author:
Morgan Housel is a distinguished expert on behavioral finance. He was a columnist at The Wall Street Journal and is a two-time winner of the best in Business Award. This award was from the Society of American Business Editors and Writers. He was also a two-timed finalist for the Gerald Loeb Award for Distinguished Business and Financial Journalism. Housel has given multiple presentations in which he talks about how behaviors affect how we use money. Similar to his book: The Psychology of Money, he uses history, neurology, and sociology to promote his teaching.
Plot Summary
As said before, The Psychology of Money aims to help you understand people’s behavior when dealing with finances. Morgan Housel uses 19 short stories to teach you about greed, understanding the power of compound interest, and getting wealthy and staying wealthy. The stories and examples you read in the book will also shed some light on how you behave with money. After finishing the book, you can manage your finances better, plan for surprises and understand how to invest using time as your ally.
What You’ll Learn in This Book
You will learn many things in Morgan Housel’s: The Psychology of Money. One of the things you will know about is:
- Why people sacrifice their success for more money
- The Power of Compounding interest and leaving room for error
- The Factors of Luck and Risk
- How can you succeed with only one good investment and 60% wrong investments.
- The value of Freedom and so much more.
Structure
The book is composed of 20 chapters, each with about 16 to 20 pages. It is relatively easy to read if you have decent knowledge and interest in investments. Once you reach the last chapter, you will find a quick summary of all the chapters and their lessons. Unlike Atomic Habits, Morgan Housel’s The Psychology of Money does not have bullet point summaries. This book’s overview has no bullet point and is like any ordinary chapter. If you wish to see a list of bullet point summaries for each chapter, this blog post by Best Book Summaries talks about the essential aspect of that chapter.
Atmosphere
The atmosphere in The Psychology of Money is direct, straight to the point, and with a business-like tone. Although you could feel a businessman’s or woman’s disciplinary tone, you also experience Morgan Housel’s passion for finances. His knowledge of investors and how he finds compelling stories make this a unique way of teaching finances. It’s marvelous when you think about it because Morgan is teaching finances to an audience using nothing but real-life events. It doesn’t use complex formulas or mathematical equations; just an excellent all-around story. Also, how Morgan Housel writes is similar to how a friend will interact with you. A great example is that Morgan isn’t afraid to sound too casual, meaning you will stumble upon long sarcastic sentences.
The Good
There are many great things about Morgan Housel’s The Psychology of Money. One of its best qualities is its knowledge, storytelling, and business-like tone with one or two sarcastic sentences. I enjoyed how much wisdom and research Morgan Housel did. This includes the degree to which he studied the ordinary American people and the best investors. For every great investor’s backstory on how they reach their level of success, there was a standard everyday Joe who was the complete opposite. One of the most intriguing parts was the chapter where he explained the secret to Warren Buffets’ money.
Another thing that was great about the book was its stories. The stories weren’t long, and if one got lengthy, Morgan would find a way to keep you reading it. I could never get bored of its short stories on greed and wealth. Also, the lessons in this book could be applied to many aspects of life. You can find this example in the fourth chapter, Luck and Risk.
The Bad
All books have room for improvement, and the critical component that can make reading this book hard is that it talks a lot about investments. People who lack experience in acquisitions and companies could quickly get discouraged. I found myself getting bored by reading about certain assets and companies. However, I regained my motivation by finding the stories and examples set by Morgan Housel. You will enjoy this book if you are passionate about finances, investments, compound interest, and some secrets about great investors.
Another thing that challenged my motivations for reading the book was a bit of economic history. The United States economy is incredibly touched in The Psychology of Money; readers who lack knowledge in this area will learn in great detail about it. However, those who are not interested will find it repetitive and boring. Lastly, the book’s purpose will help you understand humans and their interaction with money but will not teach you formulas or equations on how to save or duplicate your income. It will only tell stories and give a general answer to those questions. The plan and strategy will be up to you to create and explore. My suggestion is to know beforehand the questions you have about money. If it’s about how to do it, this is not the book; however, if you want excellent and detailed research to create your unique investment plan or money perspective, this is the book for you.
Conclusion
In conclusion, Cinemabook’s rating for The Psychology of Money by Morgan Housel is a solid 7 out of 10. Its interesting stories, coupled with an honest and business-like approach, make it an exciting read for those looking for new insights on understanding and improving one’s relationship with money. However, its many examples of world economics, companies, and interests may be boring for some users. If you can get past these issues, you will learn how to see money from a different perspective. As such, saving money, investing, and the risk factor will come more effortless because of your understanding of how behaviors affect your relationship with money.
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