The Psychology of Money : Book Review

CampusNet – The Psychology of Money is a book on self-development that you need to read. This book contains insights on how to understand money. Financial literacy in the era of disruption and technology is necessary. Can’t wait, right? Let’s read it thoroughly!

Book Identity

Name of author: Morgan Housel
Year published: 2020
Name of publisher: Harriman House Ltd
Number of pages: 238

Synopsis

A short description and overview of the book. This book is about how to better understand financial matters. Financial management is supported by life stories, making the concept simpler. In addition, it also reveals things you have never been taught in school or have never encountered before.

Psychology of money is one form of soft skill that you should at least have. This soft skill is more important than technical money issues. Money is not just a matter of counting, using formulas, or the like. As we and you know everything now requires money. At least if there is money, then half of life’s problems are solved.

3 Key Points in The Psychology of Money

1) Focus Less on One Person

When you focus on just one person, it will indirectly ignore other individuals. You tend to copy exactly what that person does. It’s like that person is your only guide. Maybe one of the reasons is because you see that person as the most successful, the richest, or the most influential.

However, when the results are so extreme, the pattern becomes less and less replicable. The results can be influenced by luck, or very extreme risks.

2) Have Enough Principle

A sense of moderation is necessary in everyday life. When you don’t have the principle of enough, it’s dangerous. A simple example is, that you have fulfilled your needs for clothing, food, and home. In addition, you have abundant finances. It’s even like the money doesn’t run out for seven generations.

However, you still want more money. Do something different than usual and take a bigger risk. Even though what you have is already abundant. You look for the unnecessary and risk everything. That’s why moderation is necessary.

3) Reduce Ego and Style

Set aside money for savings or investments. Instead of spending the remaining money to improve your lifestyle, such as shopping for clothes style, hanging out at cafes, or whatever. Prioritize your needs and reduce unnecessary wants in your life.

As much as possible, reduce expenses and increase income. When your income increases, don’t increase your lifestyle. You will never be able to build wealth without limiting your current preoccupations.

Opini