The Book psychology of money, written by Morgan Housel, explains how money plays a vital role in the economy and how requirements for money have affected our psychology in daily life. Therefore, having more money makes people lucid and helps them to make superior decisions in their lives. We have cash; considering it, good investment matters in everyone's life. Whether we do good with money isn't dependent on what is considered as brilliance. Instead, it depends on our behavior and attitude. We can't teach them to have good behavior toward intelligent people too.
Human beings are not logical but psychological. Our decisions in the past have been influencing our findings in the present. The decisions also include our financial choices based on emotions like fear or greed. After being triggered by emotions, humans try to justify their decisions with logic. Those say all our past options, whether wrong or right, were based on logic. The reason behind that is we learn with time and with experience. Past decisions give us important lessons on which our future decisions are based. Likewise, what we do with our finances in the past gives us control over our future commitments.
A good example is the people who had to live through the significant recession era. Those people would be scared to reinvest their money. Thus, we need to stop judging others for their financial decisions, as we all have had different investments experiences in the past. Moreover, we need to make more investment decisions based on our financial goals rather than our emotional experiences.
Another, idea is that people have psychological behaviors, including belief in luck and risks. When people give uncertain and risk in their proper position, they can understand that judging people's financial success is not what we see as good or bad. When the outcome is extreme, you have to deal with it trickily. You have to invest correctly so you will be able to achieve your financial goal. Some people do very show off. They want wealth to impress others. But actually, the people who admire you are the ones who use your wealth to fulfill their desires. Wealth is not just an option to buy something later; it depends on its value. You can buy more stuff today than tomorrow. To be rich, you don't have to earn or save money. Investment can make you rich. We are still determining if the investment will make you richer that is why you have to be happy with the money you have already. There is always a misperception about rich people. Most people think that rich people are rich by birth; it is just like inheritance, but it is not. Everybody can be rich. You have to set your mind accordingly. The first and most crucial point is you have recognized your current financial status. You don't have to think for one side. Look each way and think about what you have and desire. There are mainly three big lessons in this book, which are as follows
You don't have to be greedy because it is not suitable for your financial status.
You don't have to be jealous; it has no good place in the money market.
Learn from your past experiences
Being greedy will take you to failure. You have to be generous and intelligent enough to make money. Investing involves always risk, but if you do it wisely, you have to go for that. Keeping money in the bank is not a sign of a rich person; you can save it, but with a tiny proportion, it will increase. On the other hand, if your investment is, it is likely to double in a brief period. After being rich, you have to the same polite and humble. If people need your help or want anything from you, give it to them. These are signs of a successful person.
Jealousy will take you on the wrong path. When you get jealous of someone, you will try to be like them, and it will finish your own identity. Instead of working on yourself, you will look for others, and your whole time will be wasted. Instead of making emotional decisions, try to make decisions rationally while investing. Please don't compare yourself with others because it will take you down and never allow you to work on your goal. It will distract you, and you can't focus on your aim.
Your past experiences have to a great with your present and your future. For example, suppose you experienced risk in investment in your past; you would not repeat that. Humans learn from their mistakes and try to avoid them. Even by looking at some other countries, we can prevent their error and try not to do the same.
Overall, the psychology of money tells us how money is essential for the economy and how money can affect our psychological life. Cash is making people make rational decisions, but after getting the money, we don't have to change our behavior. Instead, we have to contribute to our society.