The Psychology of Money and Wealth

"The Psychology of Money" explores the complex relationship between human behaviour and financial outcomes, arguing that financial success is often less about intelligence and more about behavioural skills, luck, and managing personal biases. It emphasises that individual experiences heavily shape financial perspectives, leading to diverse and sometimes seemingly irrational decisions. The source highlights the power of compounding over time, illustrated by figures like Warren Buffett and Ronald Read, and contrasts "getting rich" with the more challenging skill of "staying rich," which requires humility, frugality, and recognising the role of luck and risk. It also touches on societal shifts, like post-WWII economic changes and growing inequality, to explain evolving consumer behaviour and the critical importance of a "margin of safety" in financial planning to navigate an inherently uncertain world.