

Money is everywhere, it affects all of us, and confuses most of us. Most of the reason why, I believe, is that we think about and are taught about money in ways that are too much like physics (with rules and laws) and not enough like psychology (with emotions and nuance).Īnd that, to me, is as fascinating as it is important.
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But has trial and error taught us to become better with our personal finances? Are we less likely to bury ourselves in debt? More likely to save for a rainy day? Prepare for retirement? Have realistic views about what money does, and doesn’t do, to our happiness?
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Through collective trial and error over the years we learned how to become better farmers, skilled plumbers, and advanced chemists. Is there any evidence it has made us better investors? Financial Engineering was the most popular major in Princeton’s School of Engineering a decade ago. The money industry-investing, personal finance, business planning-is another story.įinance has scooped up the smartest minds coming from top universities over the last two decades. Scientific discoveries have replaced doctors’ old ideas about how the human body works, and virtually everyone is healthier because of it. The health care industry is a triumph of modern science, with rising life expectancy across the world.

Two topics impact everyone, whether you are interested in them or not: health and money. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together.In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of lifes most important topics. But in the real world people dont make financial decisions on a spreadsheet. And behavior is hard to teach, even to really smart people.Moneyinvesting, personal finance, and business decisionsis typically taught as a math-based field, where data and formulas tell us exactly what to do. Doing well with money isnt necessarily about what you know.
