A didactic book on our indelible relationship with money.
This book isn’t about investment strategies, or life hacks to be smarter with your money. Rather, this books is sound advice, on not only be better with your money, but how to think of money. The advice is told in the form of 20 digestible chapters, each a lesson, covering the various aspects of money, and how we think about it.
I really enjoyed reading this book, the writing is very lucid, and engaging. Morgan references history, human behaviour, and some philosophy to frame how we should think of money. Concepts like risks, saving and wealth are explored and elaborated by engaging examples of people, and events that reflect the lesson. I have seen this sort of format in some other books, and have criticised it, but here, it just works.
The actual lessons themselves are very insightful, and have many beautiful takeaways that will actually impact your personal finance in many ways. I won’t list out all of them, but the way he looks at things is very interesting, for instance, what is the value of money? Why do we want so much of it? Morgan says:
“Controlling your time is the highest dividend money pays.”
I loved this interpretation a lot, and made me rethink how much money I need, and want. I liked how he talked about how investing is not all about algorithms, because, in reality optimising for a number in the bank mindlessly isn’t what makes us happy. His take on investing is very nuanced. And it helps that Morgan is an excellent writer, and has this ability to very succinctly bring across his points in a very humble, and witty way.
Not only does this book have some great lessons on the psychological aspects of money, and happiness, it has some very sound financial advice too. The lessons here are a great mix of practical advice, and our mindset. Morgan explores risk, and planning. How to decide how much we should target to save, how to create wealth, and how to invest in way that gives you great returns, but let you sleep at night (and this is something he considers a very important part of investing.)
He stresses on how wealth creation, and investing is a game of patience, and persistence. Beating the market is hard, very hard. Over 85% of funds did worse than the S&P 500 as of 2019. And this has always been the case. Its not to say beating the market is impossible, and there have been people who have done so, but there is this element of luck associated with most great investors. Sticking to a strategy is easier, when you are earnest. And usually, most safe strategies pay off long term - losses or crashes are fees that we pay to be allowed on the long term ride.
Another important lesson that I took away was that is that everyone investing are playing different games, and looking for different outcomes. We must never make decisions based since the rules for one game, can never be applied to the other,
“And short-term traders operate in an area where the rules governing long-term investing—particularly around valuation—are ignored, because they’re irrelevant to the game being played.”
There are many such great lessons, with some really nice quotables throughout this book.
The more I think about this book, the more I love it. I think everyone should read this book, it will help re-frame your relationship with money, wealth and happiness. This is not the only book I would read on finance, far from it (I love money, and I do want to be rich) - but I am glad I read this one first. It gave me more to think about money, than any high return strategy, or alpha trading tricks could, and that’s what is important.