The Psychology of Money

I got this book recommendation over Twitter, where Gautam Baid, author of Joy Of Compounding, highly recommended this book and it’s really an awesome book and worth the time and money.

The author beautifully narrates as to how the decade in which we are born guide our thoughts differently. For instance, someone who has seen extreme poverty during his 20s will consider saving money whereas in same timeframe young lad in his 20s living a lavish life won’t consider saving for future as a wise choice as he already have plenty.

From World War II to 1970s, the difference in wealth among the Americans was least and it was a declining trend. However later the cure took another turn and boom the difference has been growing ever since with the richer becoming richer and poor becoming poorer.

When we live in a society, we expect everyone around us to live a similar life, where everyone is either driving Audi or everyone is riding bikes. When we see someone in our surrounding buying something expensive, we too fall for the trap to have that luxurious expensive thing. Mostly we run after things we don’t at the first place to show to people we don’t care about.

As Munger beautifully narrated in his book, at the end of the day it’s all about psychology. We all know saving is important but we rarely act on that. When was the last time you saved “time”?

If you enjoyed reading this post and found it helpful, feel free to share on Whatsapp with your loved ones by clicking here.