Morgan Housel's The Psychology of Money explores the behavioural and emotional aspects of financial decision-making. The text uses anecdotes and historical examples to illustrate how personal experiences shape our relationship with money, often overriding purely rational approaches. Housel argues that "soft skills" – understanding psychology and behaviour – are crucial for financial success, more so than simply mastering financial formulas. The book examines various biases, such as overconfidence and the impact of luck, while highlighting the importance of long-term planning, risk management, and emotional resilience. Ultimately, it promotes a more nuanced and human-centric approach to personal finance, emphasising individual circumstances and the need for adaptability over rigid rationality.
