The Psychology of Money

Piggy bank surrounded in coins

Last time I was sick, I read through an entire book in two sittings. Considering I’m a slow reader, that was quite an achievement! I haven’t posted a book review on this blog for a while, so let me see if I remember how to do these… 📚

cover of book - The Psychology of Money

The Psychology of Money

Timeless lessons on wealth, greed, and happiness

Morgan Housel

Find the book on Amazon

This book isn’t about investing, or specific tactics to get wealthy. Rather, it is a compilation of stories centered around general concepts regarding money that are universal to the majority of people living in the monetized economy. Each chapter is fairly short, and the author’s quick and direct delivery style kept me turning the pages.

Similar to others, I have subconsciously built up a collection of values regarding money throughout my life. I have thought processes around how I use money now, and also how I invest for the future. While I was comfortable with the values I already had, I was interested to get insight into how others view money, and to see if any of my own thoughts ought to be reevaluated.

Surprisingly, I pretty much agreed with everything this author said. Even his personal saving/investment plan shared at the end of the book closely resembled the structure I’m building towards. The data he shared gave fresh perspective to concepts I already knew must be true.

And so I walked away after completing the book, not so much with new values, but with a clearer understanding and confidence that I am comfortable with the value system I have created for myself regarding money.

“Rich” doesn’t mean “Wealthy”

The author makes a clear distinction between riches and wealth. Riches are the possessions one has as a result of having consumed money. Wealth is the money one has not consumed, and will lead to more options in future. Riches can be seen by others, whereas wealth generally cannot. Therefore, just because someone has riches doesn’t mean they are wealthy.

Saving is suppressing the desire now to convert money into riches, and instead accumulating it as wealth to lead to more options in the future. Saving can be done towards specific purchases in the future. But as life is known to throw so many odd balls, saving for no reason at all is actually one of the best reasons to save.

The highest dividend money can pay

The following sentence probably resonated with me the most from the entire book.

The ability to do what you want, when you want, with who you want, for as long as you want to, pays the highest dividend that exists in finance.

Morgan Housel

Money sitting there really doesn’t have any value – it is paper, or stone, or just a string of zeros and ones on a silicon chip. Money is a tool that creates value once it is spent. Physical items have their place in life – many are necessities. But the most valuable thing someone can “purchase” with their money is control over their own time.

I work to earn money. But I earn money to be able to live my life outside of work to its fullest. To me, that means building a meaningful relationship with my God, and my wife, and others around me. (I now have a puppy I’m building a relationship with, too 😄) Money is the tool which allows me to free my time to invest in these relationships.


I really enjoyed this book. I’d recommend it to young adults starting out with their own finances to gain a holistic and objective view on money. At the same time, the specific examples and data shared throughout the book are equally interesting to those who’ve already built out their finance strategies.

Thanks for reading!

PS: This book was recommended to me by Chait – a colleague at work. You can see what he is up to on his blog – Chait.blog

3 thoughts on “The Psychology of Money

  1. Glad to hear you too appreciated this book, Ben!

    I learned about Morgan and his blog through an ex-Automattician. His book and blog have positively impacted my life!

    I am usually selective and generally don’t blanket subscribe to all the content even on the blogs I like, but Morgan is an exception. Anything and everything he writes, I will read and absorb!

    Liked by 1 person

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