This book covers the psychology of you managing your money, and of humans as a whole.
Here are some written notes I have from the book, that might make you want to read:
The Money Perspective:
The environment you grew up in vastly determines the outlook you have on finances.
Take for example a study conducted in 2006:
Economists Ulrike Malmendier and Stefan Nagel dug through 50 years of the Survey of Consumer Finances and found this:
The way you view money is dependent on the environment you were born into:
If you grew up when inflation was high, you invested less money in bonds later in life compared to those who grew up when inflation was low
If you happened to grow up when the stock market was strong, you invested more of your money in stocks later in life compared to those who grew up when stocks were weak.
The Average American:
Americans spend more money on lottery tickets than, drum roll, please……
Movies
Video games
Music
Sporting events
Books
All Combined!
I share this to give perspective on why so many people are poor, so let’s look.
“ The lowest income households in the U.S. average spend $412 a year on lottery tickets, 4x the amount of those in the highest income groups.
40% of Americans cannot come up with $400 in an emergency. “
- Psychology of Money by Morgan Housel
Americans are spending their emergency fund on lottery tickets!
The Poor Persons Perspective:
Let us take a look from their perspective as to why this behavior might occur.
For their argument's sake, someone in their position might say:
“ We live paycheck to paycheck and saving seems out of reach, our hope for higher wages seems out of reach.
Buying a lottery ticket is the only time we can hold a tangible dream of getting the good stuff the wealthy take for granted.
We pay for a dream, so we buy more than you do. “
by NoChard6996