This is the first blog of a new series where I’ll write about books that I’ve read and helped me.
Amazon – https://amzn.to/47BEBUB
Key notes-
- When the market is up: it isn’t necessary that everything’s going great. Also, when the market is down: it doesn’t mean the world is ending. Take a more balanced outlook on your investments.
- “Enough” isn’t too bad. When it comes to investment returns, playing safer is better than taking short term risks.
- Compounding is the key. Don’t focus on getting rich passively quick. Just ensure that your time horizon is long enough to let compounding work its magic.
- Keep your wealth. Don’t go broke trying to impress other people or even yourself.
- Just be right half of the time. You don’t need to be right with everything, investing doesn’t work that way.
- Time is freedom. True freedom lies in controlling your time. It is what will make most of you happier.
- Wealth is what you don’t see. Money is what you spend, wealth is what you create and keep. Fancy cars don’t necessarily mean greater wealth.
- Save Save Save. You don’t need a reason to save money. Tomorrow comes with enough uncertainties itself and even if everything’s good, a good night’s sleep is worth it.
- History isn’t a map of the future. There are just too many different factors that lead to a situation and therefore the market cannot be interpreted in the same way ever.
- Have room for error. This is one of my favourites. The whole point is to survive. If you’re broke you cannot invest a penny.
The book is great for retail investors but the only reason I read it was because I building Segmentize and this book has helped me a lot in understanding the nuances that investors face.
Summary-
To sum it up, The psychology of money is a great book as it teaches us to be reasonable and yet not be too rational. To take risks but also have a safety belt in case things don’t work out. It encourages people to save money more than to spend it and stay in the financial world for long enough to reap the benefits of compounding. It also explains greed in a very fine sense and the reason for all financial crisis. I’d highly recommend you read the full book – amazon.in. Particularly don’t miss it if you are a beginner and you want to get into investing. Perhaps one of the best books written for modern retail investors.
My take-
Since I’m not an average retail investor, my take on the book is a bit different. I believe in constantly investing my earning in one thing or another. I don’t believe in saving a lot of money. If you can create cashflows from your earning, you’ll reach financial freedom soon. Though, if you are a working profession, its the best for you to follow the book. I do believe in most of the things he said about not spending too much etc. All in all, its worth reading so go ahead and get a copy of your own.
Thanks for reading.
Comments are closed