Did you catch the first 2 parts of these amazing money lessons from Morgan Housel, author of the Psychology of Money, whose blogs regularly appear on the Collaborative Fund?
If not, please read it here:
And today, we continue further with another 13 lessons from this inspirational author.
1. A good rule of thumb for a lot of things in life is that everything that can break will eventually break. So if many things rely on one thing working, and that thing breaks, you are counting the days to catastrophe. That’s a single point of failure.
2. There are a million ways to get wealthy and plenty of books on how to do so. But there’s only one way to stay wealthy: some combination of frugality and paranoia.
3. If your expectations grow faster than your income you’ll never be happy with your money no matter how much you accumulate.
4. Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risks. It requires humility, and fear that what you’ve made can be taken away from you just as fast.
5. Beware of taking financial cues from people playing a different game than you are.
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6. Few things are as valuable in the modern world as a good BS detector.
7. There’s a sweet spot where you grasp the important stuff but you’re not smart enough to be bored with it.
8. A big takeaway from economic history is that the past wasn’t as good as you remember, the present isn’t as bad as you think, and the future will be better than you anticipate.
9. Pessimism always sounds smarter than optimism because optimism sounds like a sales pitch while pessimism sounds like someone trying to help you.
10. Every past decline looks like an opportunity and every future decline looks like a risk.
11. Nothing too good or too bad stays that way forever, because great times plant the seeds of their own destruction through complacency and leverage, and bad times plant the seeds of their own turnaround through opportunity and panic-driven problem-solving.
12. Tell people what they want to hear and you can be wrong indefinitely without penalty.
13. When and where you were born can have a bigger impact on your outcome in life than anything you do intentionally.