This is one of my favorite books on finance. It was recommended to me by a friend in the U.S., and it was worth my time. Unlike other financial books, it offers a clear breakdown of human behavior, rather than technical intelligence or some mathematical formula.
In this book, Housel argues that financial success is a soft skill, and knowing what to do is far less important than how you behave when greed, emotions, and insecurity take over. In his book, he summarized his ideas into several headings, and they are as follows: No one's crazy. In this, he argues that everyone makes financial decisions based on their own unique life experiences and background. What looks irrational and reckless to one makes complete sense to another; it all depends on the economic world in which they grew up.
Luck and Risk: Here, he believes the outcome in life is influenced by forces other than individual effort. This realization, he argues, would make one humble in success. The power of compounding: In this, he challenges the normal narrative that risk and brilliance influence financial growth. Here, Housel argues that risk and brilliance are not required for financial growth, but time and consistency are. So the more time one stays consistent, the better chance they have to grow wealth.
Getting wealth versus staying wealthy: Housel believes risk, optimism, and putting oneself out there only make one get wealth, but staying wealthy requires the opposite—like humility, frugality, and flexibility to handle unexpected downturns. And finally, freedom as the ultimate dividend: In this chapter, Housel believes the highest level of wealth is the ability to wake up every morning and do whatever we desire. He believes being able to control time contributes far more to personal happiness than luxuries.
The key strength of this book is its engaging narrative style. Instead of relying on statistics, he built his book through real personal case studies. By shifting his narrative from portfolio math to self-control and psychology, the advice applies to both beginners and seasoned investors. Finally, each chapter functions as a standalone essay, making the book easy to read.
This book is essential for everyone looking to build a healthier long-term relationship with finances. It reminds us that the ultimate goal of money is independence, peace of mind, and control over time.
I'll rate this 95/100
