Unlocking the Psychology of Money: Lessons on Wealth and Compound Interest from ‘The Psychology of Money’ by Morgan Housel

So I heard the girls are showing the books that make them hotter versions of themselves by making them smarter, more educated and much more capable of having arguments with men at the bar. I’m gonna share my current read. It’s psychology of money by Morgan Housel. I first got this book two years ago, but I’ve been rereading it again this summer because it is just that good. It goes into exactly how we think, think and behaviour on money, covering everything from our attitudes to making money, spending money and keeping money. And I wanna share with you my two most important lessons from this book that I’ve just completely changed the way I think about money. And the first lesson is wealth is what you don’t see. We’re really good at trying to base people’s wealth of what we can see. You know, what designer bag they’re wearing or what fancy car they’re driving. But true wealth is what you don’t see. And it is built with the money you don’t spend. And there’s a really good quote about this in this book where it says, someone driving a one hundred thousand dollar car might be wealthy, but the only thing that really tells you about their wealth is that they have a hundred thousand dollars less than before they bought the car. My second lesson is understanding the importance of compound interest. The book talks a lot about how good investing is necessarily about having the Absolute highest returns. Because often those are investments that are one off hits that can’t be repeated. Instead, it’s about having pretty good returns that you can stick with and have for long periods of time. Because that is when the effect of compounding, which is interest earned on your savings and previous interest, starts to run wild. And it really taught me that as a young person, as someone in my 20s, time is really on my side because the earlier I start taking advantage of the wonders of compound interest, the more I benefit from it.