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The Psychology of Money
Timeless Lessons on Wealth, Greed, and Happiness
Morgan Housel
You can read The Psychology of Money in two ways. As an individual, the book offers insight on how others succeed with money based on their unique life experience. As a finance-sector practitioner, the material is a portal on how large institutions manage their portfolios, albeit indirectly. That statement may sound peculiar for a mass-market book selection, but we are often struck by the number of people who think that institutional investors are rational players, while individual players are not. The truth is that family offices, sovereign wealth funds, and endowments—among others—are held hostage to the individuals who lead them, committees be damned. Is the head of investments a stereotypical trust-fund baby? Perhaps the executive responsible for due diligence was raised by a mother who worked two jobs. Their outlooks on risk could be wildly different, although not necessarily what you might think. As the author argues, “We all think we know how the world works. But we’ve all only experienced a tiny sliver of it.” In exquisite style, this book pulls together strands of behavior analysis, economic history, and market dynamics.
