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Everyone seems to be appreciating this book : Psychology of money by @morganhousel and so I thought to put down a thread with 10 Biggest takeaways from this book in case you haven't read it so far. RT will be appreciated.
Everyone seems to be appreciating this book : Psychology of money by @morganhousel and so I thought to put down a thread with 10 Biggest takeaways from this book in case you haven't read it so far. RT will be appreciated.
-The book isin't about which stocks you should be buying nor is about complex financial jargons. Its simply about why you should invest,how daunting matters of finance can be understood easily. It also talks about we are less logical and more psychological.
-True wealth isin't what you see : What you see is the car,bungalow and luxry,what you don't see are the EMIs behind it,the stress and the burden. You need to understand,if you are running behind these,people are going to respect the car(Oh wow that Ferrari) not the car owner.
-You need to pay a price for everything. To grow your investments,you can do it either via index funds/equity or via keeping it in safe instruments like bonds. Former if done with proper research and study,can create huge wealth,latter will give lower returns as against safety.
-Real wealth is when you have TIME. Financial independence is what you need to strive for. Hence stop impressing the world with toys which will have depreciating value.
-People invest in vacations,cars etc but not on self as they can't see immediate value in that which is wrong.
-People invest in vacations,cars etc but not on self as they can't see immediate value in that which is wrong.
-Growth is driven by compounding which always takes time but destruction is always driven by single point of failures i.e. it can happen overnight due to some silly mistake.
-Becoming wealthy is easy,but remaining wealthy is difficult.
-Becoming wealthy is easy,but remaining wealthy is difficult.
-3 RULES:
-Aim to become unbreakable,dont worry about cycles,all investments have times when they go up and down.
-A good plan leaves room for error: Have a plan B,what if Plan A investment fails,so have contigency
-Be optimistic about future but paranoid about success
-Aim to become unbreakable,dont worry about cycles,all investments have times when they go up and down.
-A good plan leaves room for error: Have a plan B,what if Plan A investment fails,so have contigency
-Be optimistic about future but paranoid about success
-Ronald Read a security guard,died with 8M$ dollars. Wondering how? Simple :Saving,Investing and compounding
-Richard Fuscon a Harvard grad,top talent,working in MerylLynch but failed and was bankrupt in 2008 due to his lavish spending habits. If you cant manage 100,u cant 100000
-Richard Fuscon a Harvard grad,top talent,working in MerylLynch but failed and was bankrupt in 2008 due to his lavish spending habits. If you cant manage 100,u cant 100000
-Even if your salary is low you can become rich
-Live below your means
-Have independent decision,not just because society says you need to do so n so
-Seek pleasure from free or low cost activities like reading,excercise
-Maintain 20% emergency fund
-Dont interupt compounding
-Live below your means
-Have independent decision,not just because society says you need to do so n so
-Seek pleasure from free or low cost activities like reading,excercise
-Maintain 20% emergency fund
-Dont interupt compounding
