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The Psychology of Money

Morgan Housel

5 mins

3 key insights

Visual, audio & text

In The Psychology of Money, financial journalist Morgan Housel reveals the ways in which our intuitions surrounding money are misguided, and what to do about it.

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The Psychology of Money

The Psychology of Money

by Morgan Housel

Overview

The most important skill for financial success isn't professional expertise, it's psychological wisdom. According to financial journalist Morgan Housel, trying to explain finance using scientific-seeming laws and formulas is misguided. Why? Because finance is ultimately driven by human emotion. To explain human behavior around money, you need to turn to psychology and history, not to mathematical data and formulas.

In The Psychology of Money, Housel sets out the counterintuitive principles often found in our financial behavior. The author reveals how we underestimate the impact of low-probability events, how we mistakenly value money more than time and independence, and why we often fail to stick to our long-term plans. For each insight, Housel also outlines what we can do to remedy the situation.

Favorite quote

Financial success is not a hard science. It's a soft skill, where how you behave is more important than what you know. I call this soft skill the psychology of money.

- Morgan Housel

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