10 Lessons From the Book “Psychology of Money”
Deep Note ( @1DeepNote )
1⃣ Money Decisions
🤓 Every decision is justified by taking the information we have at the moment and plugging it into our unique mental model of how the world works.
💗 “The world is full of obvious things which nobody by any chance observes” — Sherlock Holmes.
2⃣ Be careful who you praise and admire;
👉 Be careful who you look down upon and wish to avoid becoming.
🙂 We only see the headlines and believe we can do the same.
3⃣ Having Enough
🔴 One of the most challenging financial skills in the world is to get the goal post to stop moving, it is evident in our consumer-driven lifestyles.
👉 Capitalistic system makes it easy to feel good with the latest gadget or item, and you have to keep getting them.
4⃣ Compound interest
🤠 The book mentions Warren Buffett’s investment success often as he has been investing for decades.
👉 You must let your money compound naturally and stay out of its way.
5⃣ Planning is essential but
👉 the most important part of every plan — is to plan on a plan, not going according to plan.
😉 Plans and hope for the best, but prepare for the worst.
6⃣ You can be wrong half the time and still make a fortune
🤠 “Here’s the thing about luck…you don’t know if it’s good or bad until you have some perspective.” — Alice Hoffman
✅ You should Play the long game in finances.
7⃣ Controlling your time is the highest dividend money pays
🔴 The intrinsic value of money is its ability to give you control over your time.
👉 Unspent assets give you greater control over what you can do and when you can do it.
8⃣ Humility
👉 One of the most potent ways to increase your savings isn’t to raise your income but raise your humility.
✅ In the future, taking the ego out of my decisions will be wiser, mainly if it results in completing a long-term goal.
9⃣ True wealth is what you don’t see.
👉 Modern capitalism makes helping people fake until they make it a cherished industry
🤓 Be more concerned with what they did to earn the wealth and see how I can apply those principles.
🔟 Avoid the single points of failure.
👉 A good rule of thumb in life is “everything that can break will eventually break.“
🤠 So an important lesson as we advance is to diversify your income streams and your skillset ASAP.