Book Reviewed: The Psychology of Money: Timeless lessons on wealth, greed, and happiness by Morgan Housel

Human expectations for happiness The author highlights the thought and behaviors of investors that influence their financial decisions, and how it becomes irrational. Aversion to loss, fear, greed, and herd behavior are some of the reasons. The herd mentality where the individual investor tends to mimic the actions of a larger group leading to stock market bubbles. Understanding the psychology of money can lead to better financial decisions, improved financial well-being, and greater overall happiness by aligning financial practices with personal values and long-term goals. In 2013, economist Daniel Kahneman authored a similar book with the title, “Thinking, Fast and Slow” to describe the driving force for the mind that is made of two systems, the System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. The effect of cognitive biases on everything from playing the stock market to planning our next family vacation is understood by knowing how the two systems shape our judgments and decisions. Author Morgan Housel shares a similar idea with several short stories exploring the strange ways we think about money.