The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness
| Author : Morgan Housel, 2020
What’s It All About?
In my coaching with manufacturing leaders, I’m all about looking into how behavior drives results. Since I’m so focused on emotions and behavior, I didn’t think I’d be interested in a book about money and wealth, like Morgan Housel’s The Psychology of Money. But once I shifted my mindset and checked it out, I learned there is a way bigger correlation between emotions, behavior, and financial success than I ever realized.
In his book, which has sold millions of copies and been published in 52 languages, Housel doesn’t rely on stories about tycoons and self-made millionaires. Instead, he uses the stories of average but hard-working individuals to cover great topics like work-life balance, smart spending, and how to become wealthy. Many of the points in the book can be tied back to the importance of emotions and behavior. Even if you’re focused on making money, you won’t get there without understanding and developing the emotions and behavior to drive the lifestyle you need to make that money. Without analyzing what drives your behavior around money, you’ll be on a financial treadmill—always working, but never getting ahead.
One of my favorite parts was the section on why you shouldn’t spend money you don’t have. This was a particularly humbling takeaway, as I look back at my past and remember spending too much money on a hot tub, pool, vacations, and more. I did all this because I thought spending money on these items would make me happy and successful. But even once I spent money, I wasn’t happy. Once I changed my practices to spend less and invest more, I found greater happiness. Reading this book reminded me of that experience and left me feeling both humbled about my past and confident about where I am today.
“Modern capitalism is a pro at two things: generating wealth and generating envy. Perhaps they go hand in hand; wanting to surpass your peers can be the fuel of hard work. But life isn’t any fun without a sense of enough. Happiness, as it’s said is just results minus expectations.”
I’ve been lucky enough to participate in the South Florida Model Investment Club, who use a tool called Stock Selection Guide (SSG). This tool aids investors and helps them finding an objective analysis. It was very helpful for an investor like me, who based my emotions on what I hear or read in the news. It helped me find the actual best investments, rather than leaving me to base everything on my emotions.
Reading The Psychology of Money reminded me of this experience, as it shows the importance of emotions. While its important to use emotions, it can be dangerous to let your emotions drive your behavior. This is true whether you’re making a big financial decision or handling a miscommunication on the manufacturing floor.
Even though it’s full of information, this book is a fast read! It’s less than six hours on Audible and a hard copy can be easily read in a week.
Reviewed by: Trevor Blondeel, January 19, 2023
At Manufacturing Greatness, Trevor Blondeel works with manufacturers to connect the top to the shop floor. If you’re ready to improve your own organization, contact Trevor to learn how Manufacturing Greatness can help you build stronger leaders and develop a dynamic, high-performing workplace.