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5 stars

short review for busy readers:an intriguing short guide to how people think about, react to and interact with the idea of money. Lots of case examples, some highly informative or just interesting trivia. A bit intentionally repetitious to reach the slow kids in the class. Conversational style. Examples are very America-centric. Rather enlightening and very much worth the read for those who do not read about money very often.

in detail:
Do you know how you react to the idea of money? Is it the root of all evil, or the thing you daydream about? And your investment strategy, are you someone who follows the experts� advice, sells immediately when the market gets turbulent or keeps the same portfolio for decades? Do you save for a rainy day, even if you have no idea when that rainy day will be, or is your home full of neat stuff you've bought?

All of these questions Housel says are based on where and when you were born and what lessons about finances you absorbed growing up. It’s often hard to understand the behaviour of someone born in a very different time and place to your own, but nobody is crazy or does irrational things.

Not when it comes to cash.

One of my favourite case examples is how the singer Rihanna almost went broke and sued her financial advisor. The advisor said, “do you really have to tell someone that if they spend all their money, they won’t have any?�

The answer is YES. It may sound like a no-brainer, but all of us really do need to be told these things directly and in plain language.

Here's a reason why: When people say they want to have a million dollars, they really mean they want to spend a million dollars. There’s no distinction in their mind between the two. But having and spending are absolutely not the same.

That’s the difference between ‘wealthy� and ‘rich�.

Wealth = what you have in reserve.
Rich = what you can spend at any given moment.

Someone who has a million in the bank they hardly ever touch is wealthy. Someone who just got a year-end bonus and buys an expensive new car to impress their friends is rich. Being wealthy is often invisible, while being rich is often highly showy.

You want to aim for being wealthy, says Housel, not rich. A lesson Rihanna had to learn the hard way (and has).

Much of the advice in the book can be applied to general life, too, not just finance.

Like, optimism is believing that the overall trend of things is positive and progressive, even if there are setbacks and delays in the short term.

Like, the fact that far more in our lives goes back to luck than we’d like to think, so don’t be so hard on yourself when luck takes a holiday in Florida for a while and doesn't send you a postcard.

Like, you can make all sorts of rotten choices, as long as you get the key decisions right, because most things depend on only a few major data points…the rest doesn’t matter too much.

I got a lot out of this book and I’m sure you would, too. Even if some of it you might not want to hear because it could make you feel called out, or have been following an idea from a different time and place to current practical reality (which is a greater risk the older you get).

A very recommended 'think piece'.