The Psychology of Money

Howdy,

Last week, we discussed the Luck Surface Area.

This week, we're discussing a topic related to luck - the psychology of money.

Plus, we've got a whole bunch of photos from the road at the end of the newsletter!

Wealth is about behavior.

Morgan Housel authored a book called The Psychology of Money. It is a phenomenal read on wealth, greed, and happiness.

The thesis of the book is that we are emotional, irrational beings but financial success is a soft skill that can be learned.

This means that anyone, no matter their background or technical knowledge around money, can become financially successful if they learn how to monitor and curb their behaviors.

Image Credit: Four Minute Books

5 favorite lessons from The Psychology of Money.

1. Reasonable > Rational - "Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable."

• Lesson - You're emotional. I'm emotional. We'll never not be emotional, so just try to be reasonable.

2. Save Money - "Building wealth has little to do with your income or investment returns, and lots to do with your savings rate."

• Lesson - Living beneath your means not only increases your savings, it increases your humility.

3. Man in the Car Paradox - "No one is impressed with your possessions as much as you."

• Lesson - Control your need for outward mechanisms of validation and you'll save yourself a great deal of money over your life.

4. Nothing's Free - "Like everything else worthwhile, successful investing demands a price...volatility, fear, doubt, uncertainty, and regret.

• Lesson - There are non-monetary, emotional costs associated with investing.

5. Freedom - "The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.

• Lesson - Money isn't about symbols of wealth. It's about coaching your son's tee-ball game and not thinking twice about it. It's about being there for every one of your daughter's dance recitals because no one tells you that you can't. It's about being able to walk away from a project if it doesn't align with your values.

Check out this graphic from Sloww's book summary of The Psychology of Money for more lessons. Kyle Kowalski, the founder of Sloww, distills insights from many other great books which you can find here.

Photos of the week

Locations this past week: Nashville, TN -> Evansville, IN

Spent a week with my sister Ashley in Nashville!

Had my first wake surfing experience near Cookeville, TN.

I started at Deloitte in D.C. with my buddy Ethan (2nd from the left.) Enjoyed time on the water with him and his friends. Not pictured: his dad who took this photo and tossed me around on a tube while driving the boat. Happy to report I battled and hung on a time or two.

Waterfall just off the lake.

Ethan ripped a hydroplane board and is 2ft off the water here. Absolutely absurd levels of balance and coordination in order to make this happen.

After Nashville, I drove to Evansville, Indiana to go see my buddy, Kelsey, who I worked with at Mountain Sky Guest Ranch in Emigrant, Montana. He's working with his dad running a furniture store, Simplicity, pictured here. Check them out if you're in need of furniture in the midwest!

Moped. Dog. Chicken in the distance. Don't let anyone tell you they don't have fun down in Southern Indiana.

Moped rides through fields of hay before a night of fishing on a nearby lake. Like I said, don't let anyone tell you they don't have fun in Southern Indiana.

Thanks for reading

Go tell someone about one of the 5 lessons from the Psychology of Money,

Josh

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