The Psychology of Money by Morgan Housel

The Psychology of Money by Morgan Housel

Audio book from Audible; Narrated by Chris Hill

Running time is around 5 hours 48 minutes which can be reduced to around 3 hours or so by increasing the speed to 1.2 or even 1.3 without any compromise on the understanding.

This is a non fiction reference book which actually chronicles many people who have either got wealth or saved wealth or in some cases lost wealth. There are twenty or so chapters and as the author mentions in the introduction, each chapter can be read as a separated chapter while you can read the whole book as a whole.

Without being preachy Morgan takes us into the basics of investment constantly stating that what works for one may not work for another while narrating so many stories!

Introduction was of an amazing person called Ronald James Reed who is like that unknown super star of investment! This example is what the whole book is all about, a simple man with limited resources who consistently and constantly saved a little over a period of 30 to 40 years and finally when he died he had a net worth of around 8 million dollars!

Morgan talks about the role of luck in getting your investment back or getting multiplied. He talks about two people, one who luckily saved his stock from collapsing in the nick of time (though he lost it again many years back) and one who lost everything.

He talks about the difference between being rich and being wealthy; how having a big car or something similar may not mean that the person is wealthy but just under rich by credit!

He talks about Warren Buffet and his simple policies! I am sure there cannot be any book on investment without mentioning about Warren and his story and his investment advice.

He also tells about Bill Gates and about how his dreams were big and how! How the fact that only his college luckily had computer and that changed his life!

In most places Morgan places lots of emphasis on luck and he states that even if you make a hundred investments you need luck on your side.

He also states how the most famous book on investment in different editions keep on changing its suggestions or things that work in every edition!

He talks about my favourite author Daniel Kahneman in so many places whenever an emotional issue is involved!

Then again he states that you do not have to be successful in each and every investment or decision you make! In fact even Warren Buffet would have made many dud investments, even hundreds and all you need is for just some of them to work which would take care of any negatives!
Here he tells about even Walt Disney who made several costly movies which were big disasters but one Snow White movie took care of all the failures!

He talks about patience which is required in this field, to stay when others drop and drop and the nick of time!

In the end he gives an interesting story on how after world war, US was facing imminent collapse due to high home rates and low job! How federal home loans were invented with low prepayment and long pay back times! That changed the whole ecosystem. People were encouraged to spend and to make credit purchases. And lot more interesting trivia which must be read to understand.

He also finally tells about his own investments and in the lines of Reed, he makes simple investments with almost frugal lifestyle with a good and consistent plan.

Anyone who is interested in investment knows that this is a must read book. This is not a story book but a reference manual you must listen or read once in a while during your investment journey!

Have fun! Reading and investing!