The Psychology of Money changed my perspective on wealth and decision-making.
Morgan Housel believed:
“Money’s greatest intrinsic value is its ability to give you control over your time.”
7 timeless lessons I learned from The Psychology of Money:
1. Wealth is What You Don’t See
“Spending money to show people how much money you have is the fastest way to have less money.”
True wealth is the financial security & freedom that comes from not needing to display your wealth.
It’s the assets you build that no one else sees.
2. Time is the Most Valuable Asset
“The most important part of every plan is planning on your plan not going according to plan.”
Time is the greatest factor in building wealth.
The earlier you start and the more patient you are, the more your money can grow.
3. Compounding is the Eighth Wonder of the World
“Compounding doesn’t work if you constantly interrupt it. Let it grow over time.”
The power of compounding is often underestimated.
Wealth builds up exponentially, but only if you let it grow uninterrupted over long periods.
4. Save More Than You Earn
“You don’t need a specific reason to save. It’s just a hedge against life’s inevitable surprises.”
Saving should be a consistent habit, not just for big purchases or emergencies, but as a way to build financial security and flexibility.
5. Risk is What You Don’t See
“Risk is what’s left over when you think you’ve thought of everything.”
Real risk often comes from what you can’t see or predict.
It’s essential to prepare for the unknown and not just what’s visible.
6. Wealth is a Long Game
“Doing well with money has little to do with how smart you are and a lot to do with how you behave.”
Building wealth isn’t about getting rich quickly; it’s about making consistent, smart decisions over time.
Patience and discipline are key.
7. Avoid Lifestyle Creep
“You can be content with less if you realize that less gives you freedom.”
As income increases, many people tend to increase their spending.
Letting your lifestyle grow too fast can trap you in a cycle of needing more to maintain happiness.
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