In a fascinating little book, The Psychology of Money, the investment manager Morgan Housel provides more useful self-help advice than most authors who explicitly set out to do so.
My title and subtitle are a takeoff on Jordan Peterson’s wildly successful book, 12 Rules for Life: An Antidote to Chaos, a mostly abstract work of philosophy that nevertheless counsels such actions as cleaning your room. Housel’s book, likewise, is an antidote to chaos and is shorter, simpler, and more accessible than Peterson’s. Each of the 20 chapters of The Psychology of Money sets forth a rule for life that goes well beyond finance and that readers would generally – but not always – do well to follow.
I confess to a little disappointment when I first skimmed the book. It is brief, easy, and completely non-technical. I wanted to be challenged intellectually. But, when I read the book carefully, I found myself more challenged and rewarded psychologically – is Housel’s take on human nature accurate? Are the common mistakes he documents that universal? Can we explain them through biology, psychology, and personal history, as Housel does? These are bigger questions than how much to save so you can retire at 65, how much to put in emerging markets, or how big the equity risk premium is. Housel addresses those questions fearlessly.
But sometimes wrongly.Click Here to Read the Article