The Psychology of Money in 20 minutes

We all have unique worldviews and since there is no universally correct way to manage money, successfully, none of us are crazy. WE MAKE FINANCIAL DECISIONS BASED ON OUR PERSONAL LIFE EXPERIENCES AND OUR WORLDVIEW.

Warren Buffett's financial success can be attributed to the financial base he built in his early years and his longevity in investing. His skill is investing, but his secret to success is time and the power of compounding.

Optimism is a belief that the odds of a good outcome are in your favor over time, even if there are setbacks along the way, but when it comes to money, we all have a bias toward pessimism that we hold dear in our hearts.

Bill Gates and his school mate Paul Allen would go on to create Microsoft together. Even as a teenager, Gates showed exceptional intelligence, hard work, and a vision for computers unlike anyone else. But going to Lakeside also gave him a one-in-a-million competitive advantage and head start.

Luck and risk are like the wind and the waves that determine the course of a sailboat. The sailor can control the rudder and the sails, but ultimately the direction and speed of the boat are influenced by external factors that cannot be fully predicted or controlled.

The key to happiness is the ability to do what you want, when you want, with who you want, for as long as you want. Pursuing money without valuing time is like filling a bucket with a hole in it.

Tail events are mostly unintuitive and hidden from us because we only see the finished products, and not all the failures along the way that led to that finished product.

Out of the nearly 500 stocks Warren Buffet has picked, only 10 have made the majority of his money. Good Stock pickers will only be right half of the time. Good leaders will only make good decisions half of the time. The fact that you might be wrong sometimes doesn't mean that things won't work out over time.

True wealth isn't what you see, but what you don't. It's easy to assume that someone driving a Lamborghini is wealthy, but appearances can be deceiving. In reality, many individuals are living beyond their means and relying on debt to fund their flashy lifestyles.

The real key to wealth is self-control, restraint, building assets and investing in your future. The next time you see someone driving a fancy car or living in a big house, remember that you can't judge wealth by appearances alone.

When it comes to the stock market, many people think they can avoid the uncertainty and risk and get something for nothing. Housel likens the stock market to getting a new car. If you want to get a car, you have three options: buy a new car, buy a used one, or steal one.

Recognizing that successful investing comes with a price is crucial. This price is not just about dollars or cents when investing; it's about accepting the emotions that volatility, fear and risk can bring.

Know when enough is enough. Become familiar with the concept of Hedonic Adaptation or The Hedonic Treadmill. Every time you hit the goal, you keep moving the goalpost further ahead.

The pursuit of wealth and success without a sense of knowing when enough is enough is like climbing a never-ending ladder. No matter how high one climbs, there is always another rung to reach for, and the pursuit can become all-consuming, leading to a lack of happiness and fulfillment.

A person's experience with the stock market and inflation during their formative years greatly shapes their attitudes and behavior towards investing and financial decision-making.