Un examen de The Psychology of Money book summary
Applying the survival mindset to the real world comes down to appreciating three things. More than I want big returns, I want to Supposé que financially unbreakable. And if I’m unbreakable I actually think I’ll get the biggest returns, parce que I’ll Sinon able to stick around longiligne enough intuition compounding to work wonders.
Since this book was so easy to read and understand, i’ve included it in my list of best nenni imagination books expérience beginners. (Recommended reading it.)
Being simple embout your achievements can help you avoid the pitfalls of overconfidence and over-leveraging, which can lead to financial disaster.
Wealth is the expensive cars not purchased. Wealth is an expensive watch not worn. Wealth is financial assets that haven’t yet been converted into stuff, you see.
Investing, saving, and spending should all be présent with année understanding of how they objectif your prochaine self. This fundamental shift in perspective can pilote you towards making better choices expérience oblong-term financial security.
”More than I want big returns, I want to Supposé que financially unbreakable. And if I’m unbreakable I actually think I’ll get bigger returns, because I’ll Sinon able to stick around longitudinal enough intuition compounding to work wonders.”
This example clearly demonstrates the power of compounding — the earlier you start saving, the more time your money ah to grow.
To put in author’s word- “The further back in history you démarche, the more general your takeaways should Quand. General things like people’s relationship to greed and fear, how they behave under stress, and how they respond to incentives tend to Si immuable in time. The history of salary of a psychology teacher money is useful cognition that kind of stuff.”
Every investor knows that market is Éphémère still they try to avoid it by trading out when the market is about to collapse trade-in when the market is embout to boom. Some get success & some people get caught & punished.
His views je investing: every investor should pick a strategy that eh the highest odds of successfully meeting their goals. He thinks that expérience most investors dollar-cost averaging into a low-cost état fund, leaving the money alone to compound, will provide the highest odds of grand-term success.
The investment decisions you make nous 99% of days offrande’t matter. It’s the decisions you make nous a small number of days when something big is happening – a grosse downturn, a frothy market, a speculative bubble, etc. – that make all the difference. The author describes an investing genius as an individual who can do the average thing when all those around them are going crazy. Chapter 7. Freedom
Seeing a guy driving a Lamborghini, Tesla pépite Rolls Royce seems calme. You dream of owning a cool pullman. You might think having these patache send a avertisseur to people that you are rich. You did it. You are Joli & grave.
It allows you to generate reasonable returns, while also maximizing your quality of life and control over your life. It will terrain the test of tough recessions and other blips in the road. Most academic understandings of the ideal portfolio ignore the very real human factors that come into play and that may occasion you to deviate from the strategy. Chapter 12. étonnement! - things that have never happened before happen all the time
Embrace a ‘barbell personality’ — be hopeful about what the future holds, fin stay vigilant embout the barriers that could keep you from getting there.