15 Best Quotes From The Book: The Psychology Of Money — Morgan Housel

1. “Spending money to show people how much money you have is the fastest way to have less money.”
2. “Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.”
3. “progress happens too slowly to notice, but setbacks happen too quickly to ignore.”
4. “Saving is the gap between your ego and your income.”
5. “Less ego, more wealth. Saving money is the gap between your ego and your income, and wealth is what you don’t see. So wealth is created by suppressing what you could buy today in order to have more stuff or more options in the future. No matter how much you earn, you will never build wealth unless you can put a lid on how much fun you can have with your money right now, today.”
6. “More than your salary. More than the size of your house. More than the prestige of your job. Control over doing what you want, when you want to, with the people you want to, is the broadest lifestyle variable that makes people happy.”
7. “Compounding doesn’t rely on earning big returns. Merely good returns sustained uninterrupted for the longest period of time — especially in times of chaos and havoc — will always win.”
8. “want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.”
9. “you risk something that is important to you for something that is unimportant to you, it just does not make any sense.”
10. “A plan is only useful if it can survive reality.”
11. “Doing well with money has a little to do with how smart you are and a lot to do with how you behave.”
12. “you need short-term paranoia to keep you alive long enough to exploit long-term optimism.”
13. “Compounding works best when you can give a plan years or decades to grow. This is true for not only savings but careers and relationships. Endurance is key. And when you consider our tendency to change who we are over time, balance at every point in your life becomes a strategy to avoid future regret and encourage endurance.”
14. “have no idea what I’ll use the savings for in the future. Few financial plans that only prepare for known risks have enough margin of safety to survive the real world.”
15. “The first idea — simple, but easy to overlook — is that building wealth has little to do with your income or investment returns, and lots to do with your savings rate.”

A Few Takeaways From This Book

• The way you behave with money is ultimately what determines your wealth.
• When your spending habits are not proportional to your income — recipe for disaster.
• Accumulating wealth is not so much about being smart, but letting compounding play it’s role.
• No matter your income, if you can set aside a portion of your income every month, while balancing your expenses, then your wealth will build over time.
• The best benefit of money, is the independence and freedom that comes with it — to be able to control your own time.

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