Author Topic: Psychology of Money Article  (Read 2027 times)

NorCal

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Psychology of Money Article
« on: June 06, 2018, 10:08:30 PM »
I found this article on the psychology of money today.  It's one of the better articles I've read on the topic.

http://www.collaborativefund.com/blog/the-psychology-of-money/

My favorite quote:

"The Berkshire Hathaway annual meeting in Omaha attracts 40,000 people, all of whom consider themselves contrarians. People show up at 4 am to wait in line with thousands of other people to tell each other about their lifelong commitment to not following the crowd. Few see the irony."

Also take a look about point #17 and the hierarchy of investor needs.  It's a good framework for prioritizing decisions.


Laserjet3051

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Re: Psychology of Money Article
« Reply #1 on: June 06, 2018, 10:59:21 PM »
I found this article on the psychology of money today.  It's one of the better articles I've read on the topic.

http://www.collaborativefund.com/blog/the-psychology-of-money/

My favorite quote:

"The Berkshire Hathaway annual meeting in Omaha attracts 40,000 people, all of whom consider themselves contrarians. People show up at 4 am to wait in line with thousands of other people to tell each other about their lifelong commitment to not following the crowd. Few see the irony."

Also take a look about point #17 and the hierarchy of investor needs.  It's a good framework for prioritizing decisions.

Great read!

terran

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Re: Psychology of Money Article
« Reply #2 on: June 07, 2018, 08:18:05 AM »
Good read. Here's my pick

Quote
Good investing isnít necessarily about earning the highest returns, because the highest returns tend to be one-off hits that kill your confidence when they end. Itís about earning pretty good returns that you can stick with for a long period of time. Thatís when compounding runs wild.

Cool Friend

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Re: Psychology of Money Article
« Reply #3 on: June 07, 2018, 02:02:27 PM »
Very insightful, thank you for sharing.

solon

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Re: Psychology of Money Article
« Reply #4 on: June 07, 2018, 03:37:03 PM »
That might be the best article I've ever read. It's up there with Random Walk Down Wall Street, and Your Money or Your Life.

Thanks for posting!

bacchi

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Re: Psychology of Money Article
« Reply #5 on: June 07, 2018, 03:52:35 PM »
Quote
In what other field does someone with no education, no relevant experience, no resources, and no connections vastly outperform someone with the best education, the most relevant experiences, the best resources and the best connections?

Politics?

Great article with a lot to digest.

Is it true that Buffeteers think they're not following the crowd?

terran

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Re: Psychology of Money Article
« Reply #6 on: June 07, 2018, 08:51:45 PM »
Ran across this interview with the author in my podcast backlog. Haven't finished listening, but he hits on some of the same topics: http://podcast.affordanything.com/125-gain-competitive-edge-morgan-housel/

Radagast

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Re: Psychology of Money Article
« Reply #7 on: June 07, 2018, 09:14:23 PM »
That was pretty good. I like that it wasn't just a regurgitation of the usual money psychology stuff.
My favorite quote was this
"This isnít new. John Stuart Mill wrote in the 1840s: ďI have observed that not the man who hopes when others despair, but the man who despairs when others hope, is admired by a large class of persons as a sage.Ē"
« Last Edit: June 07, 2018, 09:35:03 PM by Radagast »

Rosy

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Re: Psychology of Money Article
« Reply #8 on: June 09, 2018, 03:35:38 PM »
Interesting read - thanks. 

My favorite quote:
Quote
Few things matter more with money than understanding your own time horizon and not being persuaded by the actions and behaviors of people playing different games.

This goes beyond investing. How you save, how you spend, what your business strategy is, how you think about money, when you retire, and how you think about risk may all be influenced by the actions and behaviors of people who are playing different games than you are.

Personal finance is deeply personal, and one of the hardest parts is learning from others while realizing that their goals and actions might be miles removed from whatís relevant to your own life.


libertarian4321

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Re: Psychology of Money Article
« Reply #9 on: June 09, 2018, 10:05:23 PM »
I found this article on the psychology of money today.  It's one of the better articles I've read on the topic.

http://www.collaborativefund.com/blog/the-psychology-of-money/

My favorite quote:

"The Berkshire Hathaway annual meeting in Omaha attracts 40,000 people, all of whom consider themselves contrarians. People show up at 4 am to wait in line with thousands of other people to tell each other about their lifelong commitment to not following the crowd. Few see the irony."

There really is no irony.

This is a nation of 330,000,000 people.  40K people is a drop in the bucket compared to the size of the US population.  Probably a fraction of a drop.

The overwhelming majority of Americans save NOTHING, or nearly nothing.  Of those that do invest, most invest in funds, not individual stocks.  And many of those who invest in stocks buy whatever is "hot" at the moment (that generally ain't Berskshire).  So even someone who just buys a few "B" shares of Berkshire really is not among the "crowd."

2Birds1Stone

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Re: Psychology of Money Article
« Reply #10 on: June 10, 2018, 05:30:46 AM »
Good article.

Leisured

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Re: Psychology of Money Article
« Reply #11 on: June 11, 2018, 01:57:37 AM »
Thank you for the link, NorCal. I must remember Morgan Housel. I like these two quotes:

When most people say they want to be a millionaire, what they really mean is ďI want to spend a million dollars,Ē which is literally the opposite of being a millionaire. This is especially true for young people.

It helps, Iíve found, when making money decisions to constantly remind yourself that the purpose of investing is to maximize returns, not minimize boredom. Boring is perfectly fine. Boring is good. If you want to frame this as a strategy, remind yourself: opportunity lives where others arenít, and others tend to stay away from whatís boring.






rosarugosa

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Re: Psychology of Money Article
« Reply #12 on: June 11, 2018, 03:54:32 AM »
I really enjoyed this article.  Thanks for sharing.

itchyfeet

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Re: Psychology of Money Article
« Reply #13 on: June 11, 2018, 07:21:22 AM »
+1. Just quoted some of this verbatim to DW, who was pushing to spend more.

pigpen

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Re: Psychology of Money Article
« Reply #14 on: June 12, 2018, 11:48:24 AM »
Very interesting. Thanks for posting.