Want to become better with your finances?
Well, you could do a lot worse than learning from my favourite author, Morgan Housel author of the Psychology of Money and whose blogs regularly appear on the Collaborative Fund.
Over the next three days I’m going to share some of his best thoughts with you, so let’s start off with these….
1. Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behaviour is hard to teach, even to really smart people.
2. Doing well with money has little to do with how smart you are and a lot to do with how you behave.
3. Getting rich and staying rich are different things that require different skills.
4. A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioural skills that have nothing to do with formal measures of intelligence.
5. Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.
6. Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works. We all think we know how the world works. But we’ve all only experienced a tiny sliver of it.
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7. When things are going extremely well, realize it’s not as good as you think. You are not invincible, and if you acknowledge that luck brought you success then you have to believe in luck’s cousin, risk, which can turn your story around just as quickly.
8. Controlling your time is the highest dividend money pays.
9. No one is impressed with your possessions as much as you are.
10. Assume the worst, hope for the best, accept reality.
11. Imagine how much stuff you'd have to make up if you were forced to talk 24/7. Remember this when watching financial news on TV.
12. The market is rational but investors play different games and those games look irrational to people playing a different game.
13. A lot of financial debates are just people with different time horizons talking over each other.