We have reached a New Year again!
And what better way to start than to have financial lessons from Morgan Housel author of the Psychology of Money and whose blogs regularly appear on the Collaborative Fund.
So, here are 13 of his best quotes to set your financial success this year:
1. Everyone is making a bet on an unknown future. It’s only called speculation when you disagree with someone else’s bet.
2. There are two types of information: stuff you’ll still care about in the future, and stuff that matters less and less over time. Long-term vs. expiring knowledge. It’s critical to identify which is which when you come across something new.
3. Most financial mistakes come when you try to force things to happen faster than is required. Compounding doesn’t like when you try to use a cheat code.
4. Risk is what you can’t see, think only happens to other people, aren’t paying attention to, are wilfully ignoring, and isn’t in the news. A little surprise usually does more damage than something big that’s been in the news for months.
5. Risk management is less about how you respond to risk and more about recognizing how many things can go wrong before they actually do.
6. Emotions can override any level of intelligence.
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7. If you have an idea but think “someone has already done that,” just remember there are 1,010 published biographies of Winston Churchill.
8. Everything has a price, but not all prices appear on labels.
9. Building wealth has little to do with your income or investment returns, and lots to do with your savings rate.
10.No one is thinking about you as much as you are.
11. The problem with economic forecasting is that the things you can predict tend to not matter and the things you can't predict make all the difference in the world.
12. Read fewer forecasts and more history. Study more failures and fewer successes.
13. Once-in-a-century events happen all the time because lots of unrelated things can go wrong. If there’s a 1% chance of a new disastrous pandemic, a 1% chance of a crippling depression, a 1% chance of a catastrophic flood, a 1% chance of political collapse, and on and on, then the odds that something bad will happen next year – or any year – are … pretty good. It’s why Arnold Toynbee says history is “just one damn thing after another.”