21 Best Personal Finance Quotes from The Psychology of Money by Morgan Housel

The Psychology of Money by Morgan Housel is filled with gems on personal finance. If you are new to investing, wondering how you should go about “thinking” about your money, this is a book worth buying. It prompts you to reanalyze your financial strategies and question your investments. It makes you sit back and introspect whether you are following your own dream or someone else’s.

Without further ado, here are some of my favorite quotes from the book:

Go out of your way to find humility when things are going right and forgiveness/compassion when they go wrong. Because it’s never as good or as bad as it looks. The world is big and complex. Luck and risk are both real and hard to identify. Do so when judging both yourself and others.

We all think we know how the world works. But we’ve all only experienced a tiny sliver of it. An investor Michael Batnick says, “some lessons have to be experienced before they can be understood.” We are all victims, in different ways, to that truth.

Every financial decision a person makes, makes sense to them in that moment and checks the boxes they need to check. We all do crazy stuff with money, because we’re all relatively new to the game and what looks crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.

If you want to do better as an investor, the single most powerful thing you can do is increase your time horizon. Time is the most powerful force in investing. It makes little things grow big and big mistakes fade away.

Years ago I asked economist Robert Shiller, who won the Nobel Prize in economics, “What do you want to know about investing that we can’t know?”

“The exact role of luck in successful outcomes,” he answered.

I love that response, because no one actually thinks luck doesn’t play a role in financial success. But since it’s hard to quantify luck and rude to suggest people’s success is owed to it, the default stance is often to implicitly ignore luck as a factor of success.

Save. Just save. You don’t need a specific reason to save. It’s great to save for a car, or a downpayment, or a medical emergency. But saving for things that are impossible to predict or define is one of the best reasons to save.

Bill Gates once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

Failure can also be a lousy teacher, because it seduces smart people into thinking their decisions were terrible when sometimes they just reflect the unforgiving realities of risk.

Define the cost of success and be ready to pay it. Because nothing worthwhile is free.

At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, “Yes, but I have something he will never have… enough.”

Avoid the extreme ends of financial decisions. Everyone’s goals and desires will change over time, and the more extreme your past decisions were the more you may regret them as you evolve.

There are a million ways to get wealthy, and plenty of books on how to do so. But there’s only one way to stay wealthy: some combination of frugality and paranoia.

Define the game you’re playing, and make sure your actions are not being influenced by people playing a different game.

Gettng money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast.

Smart, informed, and reasonable people can disagree in finance, because people have vastly different goals and desires. There is no single right answer; just the answer that works for you.

Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.

A good definition of an investing genius is the man or woman who can do the average thing when all those around them are going crazy.

“It’s not whether you’re right or wrong that’s important,” George Soros once said, “but how much money you make when you’re right and how much you lose when you’re wrong.” You can be wrong half the time and still make a fortune.

The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.”

When you see someone driving a nice car, you rarely think, “Wow, the guy driving that car is cool.” Instead you think, “Wow, if I had that car people would think I’m cool.” Subconscious or not, this is how people think.

There is a pardox here: people tend to want wealth to signal to others that they should be liked and admired. But in reality those other people often bypass admiring you, not because they don’t think wealth is admirable, but because they use your wealth as a benchmark for their own desire to be liked and admired.

Spending money to show people how much money you have is the fastest way to have less money.

Academic finance is devoted to finding the mathematically optimal investment strategies. My own theory is that, in the real world, people do not want the mathematically optimal strategy. They want the strategy that maximizes for how well they sleep at night.

An Ode to 11 Thought-Provoking Life Quotes from Julian Barnes’ The Sense of An Ending

The Sense of An Ending by Julian Barnes is a slow burner. It is the first time I took to a Booker Prize winner, enjoying it thoroughly from start to finish without my interest wavering or feeling unnecessarily overwhelmed. It was not grim at all, and that took me by surprise, for I was expecting a story as gloomy as the title. I was hooked to the mystifying story arc and character sketches. Even more amusing was how the characters spoke – sometimes comical, sometimes pessimistic, sometimes a bit aggravating (as intended).

Several instances and dialogues in the book offer a different perspective on life and its various eccentricities. I have listed some of my favorite lines below.

“History is the certainty produced at the point where the imperfections of memory meet the inadequacies of documentation.”

“He was too clever. If you’re that clever, you can argue yourself into anything. You just leave common sense behind.”

“He thought logically and then acted on the conclusion of logical thought. Whereas most of us, I suspect, do the opposite: we make an instinctive decision, then build up an infrastructure of reasoning to justify it. And call the result common sense.”

“Some Englishman once said that marriage is a long, dull meal with the pudding served first.”

“History isn’t the lies of the victors, as I once glibly assured Old Joe Hunt; I know that now. It’s more the memories of the survivors, most of whom are neither victorious nor defeated.”

“There were some women who aren’t at all mysterious but are only made so by men’s inability to understand them.”

“It strikes me that this may be one of the differences between youth and age: when we are young, we invent different futures for ourselves, when we are old, we invent different pasts for others.”

“But time … how time first grounds us and then confounds us. We thought we were being mature when we were only being safe. We imagined we were being responsible but were only being cowardly. What we called realism turned out to be a way of avoiding things rather than facing them. Time … give us enough time and our best-supported decisions will seem wobbly, our certainties whimsical.”

“The question of accumulation – you put money on a horse, it wins, and your winnings go one to the next horse in the next race, and so on. Your winnings accumulate. But do your losses? Not at the racetrack – there, you just lose your original stake. But in life? Perhaps here, different rules apply. You bet on a relationship, it fails; you go on to the next relationship, it fails too: and maybe what you lose is not two simple minus sums but the multiple of what you staked. That’s what it feels like, anyway. Life isn’t just addition and subtraction. There’s also the accumulation, the multiplication, of loss, of failure.”

“Because just as all political and historical change sooner or later disappoints, so does adulthood. So does life. Sometimes I think the purpose of life is to reconcile us to its eventual loss by wearing us down, by proving, however long it takes, that life isn’t all it’s cracked up to be.”

“I had a friend who trained as a lawyer, then became disenchanted and never practised. He told me that the one benefit of those wasted years was that he no longer feared either the law or lawyers. And something like that happens more generally, doesn’t it? The more you learn, the less you fear. ‘Learn’ not in the sense of academic study, but in the practical understanding of life.”

The Best Quotes from Rumi’s Little Book of Life

Rumi has a way with words. His love for all things divine and spiritual is like a medicinal balm for a tired soul. I am always swept away by his verbal dexterity and his nonchalant aura. He has the power to induce both transcendence and melancholy in a single frame and you are left craving for more by the end of each couplet.

There is a neat little book available for Amazon Prime subscribers for free called “Rumi’s Little Book of Life.” It is a quick read filled with wisdom, dreamy poetry, and wonder. An enchanting journey that takes you through Rumi’s ruminations on life (see what I did there?).

Here are a few of my favorite quotes from the book.

Why do you seek water when you are the stream?

Indulging our pride, we run after every fleeting image.

How odd that being so unimportant we cultivate such grand illusions.

The intellect is luminous and seeks justice so why does the dark ego prevail over it? Because the ego is at home in the body while the intellect is only a visitor, the ego-dog at his own door is like a lion.

Embrace sorrowful thoughts for they sweep the house of your heart clean, scatter the withered leaves, and pull out the twisted roots, preparing the ground for the new shoots of joy. What sorrow takes away from the heart it replaces with something better. Without the fury of thunder and lightning the plants will be scorched by the sun. Be grateful for all you receive, good and bad alike, for it may be a gift from the treasury of Spirit that will bring the fulfilment of your most secret desire.

You carry a basket full of bread, yet you beg for crumbs from door to door. You are up to your knees in water, yet you beg for a drink from everyone you see. Why are you so blind and stubborn? Beg at the door of your heart instead.

My heart whispered, “Do not be so concerned, in the midst of people I am like a gold coin hidden in the dust, but even gold cannot find buyers unless it is brought out from the depths of the mine into the light.”

The night is blind to the glory of dawn man is blind to the glory of the lover. He who complains of burning is not a lover for the lover’s heart is constantly on fire.

Of the rain at night no one is aware for every soul is asleep. Yet the freshness of the rose garden in the morning is evidence of the rain that no one saw.

Many pass their lives deprived of love unaware that their heart is dark and narrow where the sun never penetrates. A grave is better than such a heart.

The body is like a pot with the lid on. Lift the lid to see if it is filled with the Water of Life or the poison of death. Focus on the contents and you will become a master focus on the pot and you will be misguided. Your eyes only see the body while the spiritual eye perceives the soul.

My heart twisted with passion in the fire of your words. Now I see what I saw as fire was only ice what I saw as water, only a mirage and our story, an old forgotten dream.

There are hundreds of religious books yet they are all one chapter, there are a hundred different holy places yet only one altar. All roads lead to the one House from one seed a thousand ears of corn emerge. There are many kinds of food and drink with one purpose only, to feed. The eyes of hunger are greedy, when satiated with one kind of food all others become repulsive to your heart. I dissolved as a grain of salt in your Sea of Serenity. Nothing remained, no faith, no certainty, no doubt. In my heart a star was born and inside all worlds dissolved.

An Ode to 17 Thought-Provoking Life Quotes from Fredrik Backman’s Beartown

I am a big fan of Fredrik Backman, even though I have read only 2 of his books.

The first one was A Man Called Ove. I completed the second one quite recently. It is a beautiful, emotional, intense story of a sleepy little cold town called Beartown. A place where people are laidback in all things except one – ice hockey. Their love for the sport transcends everything. It reminds me of professional football club fans. The same passion, the same energy, the same love. The same disappointment when their team loses or when a controversy pops up. If you are a sports fan or know someone who is, you would find this book extremely relatable.

Fredrik Backman is a genius when it comes to explaining moments and expressing emotions. I got goosebumps while reading through many of the quotes in Beartown.

I am listing some of my favorites here.

“The only thing the sport gives us are moments. But what the hell is life, Peter, apart from moments?”

“Being a parent makes you feel like a blanket that’s always too small. No matter how hard you try to cover everyone, there’s always someone who’s freezing.”

“Religion is something between you and other people; it’s full of interpretations and theories and opinions. But faith … that’s just between you and God.”

“People sometimes say that sorrow is mental but longing is physical. One is a wound, the other an amputated limb, a withered petal compared to a snapped stem.”

“One of all the terrible effects of grief is that we interpret its absence as egotism. It’s impossible to explain what you have to do in order to carry on after a funeral, how to put the pieces of a family back together again, how to live with the jagged edges. So what do you end up asking for? You ask for a good day. One single good day. A few hours of amnesia.”

“In a few years’ time she’ll read an old newspaper article about research showing that the part of the brain that registers physical pain is the same part that registers jealousy. And then Ana will understand why she hurt so badly.”

“A great deal is expected of anyone who’s been given a lot.”

“Community is the fact that we work towards the same goal, that we accept our respective roles in order to reach it. Values is the fact that we trust each other. That we love each other.”

“If Peter has learned one thing about human nature during all his years in hockey, it’s that almost everyone regards themselves as a good team player, but that very few indeed understand what that really means.”

“When you can accept the worst aspects of your teammates because you love the collective, that’s when you’re a team player.”

“Because the thing you can never be prepared for when you have children is your increased sensitivity. Not just feeling, but hypersensitivity. He didn’t know he was capable of feeling this much, to the point where he can hardly bear to be in his own skin.”

“One of the first things you learn as a leader, whether you choose the position or have it forced upon you, is that leadership is as much about what you don’t say as what you do say.”

“The easiest way to unite a group isn’t through love, because love is hard. It makes demands. Hate is simple.”

“Every child in every town in every country has at some point played games that are dangerous to the point of being lethal. Every gang of friends includes someone who always takes things too far, who is the first to jump from the highest rock, the last to jump across the rails when the train comes. That child isn’t the bravest, just the least frightened. And possibly the one who feels he or she doesn’t have as much to lose as the others.”

“The simplest and truest thing David knows about hockey is that teams win games. It doesn’t matter how good a coach’s tactics are: if they’re to stand any chance of working, first the players need to believe in them.”

“Fighting isn’t hard. It’s the starting and stopping that are hard.”

“There are few words that are harder to explain than ‘loyalty’. It’s always regarded as a positive characteristic, because a lot of people would say that many of the best things people do for each other occur precisely because of loyalty. The only problem is that many of the very worst things we do to each other occur because of the same thing.”