8 MOST IMPORTANT LESSONS IN "PSYCHOLOGY OF MONEY"

 8 MOST IMPORTANT LESSONS IN "PSYCHOLOGY OF MONEY"

MANAGE YOUR MONEY IN A WAY THAT HELPS YOU SLEEP AT NIGHT

That's different from saying you should aim to earn the highest returns or save a specific percentage of your income. Some people won't sleep well unless they're earning the highest returns, others will only get a good rest if they're conservatively invested. To each their own but the foundation of, "does this help me sleep at night"

Is the best universal guidepost for all financial decisions.

BE NICER AND LESS FLASHY

No one is impressed with your possessions as much as you are. You might think you want fancy car or a nice watch. But what you probably want is respect and admiration. And you're more likely to gain those things through kindness and humility than horsepower and chrome.

USE MONEY TO GAIN CONTROL OVER YOUR TIME

Because not having control of your time is such a powerful and universal drag on happiness. 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

DEFINE THE COST OF SUCCESS AND BE READY TO PAY IT.

Because nothing worthwhile is free. And remember that most financial costs don't have visible price tags. Uncertainty, doubt, and regret are common cost in the financial world. They're often worth paying. But you have to view them as fees ( a price worth paying to get something nice in exchange) rather than fines ( a penalty you should avoid)

LESS EGO, MORE WEALTH

Saving is the gap between your ego and your income, and wealth is what you don't see. So wealth is created by suppressing what you could buy today in order to have more stuff or more options In the future. No matter how much you earn, you will never build wealth unless you can put a lid on how much fun you can have with your money right now, today

SAVE, JUST SAVE. YOU DON'T NEED A SPECIFIC REASON TO SAVE

It's great to save for a car or a down-payment, or a medical emergency. But saving for things that are impossible to predict or define is one of the best reasons to save. Everyone's life is a continuous chain of surprises. Savings that aren't earmarked for anything in particular hedge against life's inevitable ability to surprise the hell out of you at the worst possible moment

YOU SHOULD LIKE RISK BECAUSE IT PAYS OFF OVER TIME

But you should be paranoid of ruinous risk because it prevents you from taking future risk that will pay off over time.

WORSHIP ROOM FOR ERROR.

A gap between what could happen in the future and what you need to happen in future in order to do well Is what gives you endurance, and endurance is what makes compounding magic over time. Room for error often look like a conservative hedge, but if it keeps you in the game it can pay for itself many times over

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