The Psychology of Money

What this book is, and who it's for

Morgan Housel's 2020 book is the rare personal-finance book whose argument is mostly psychological. Twenty short essays make a single case: financial outcomes are determined less by intelligence and more by behavior — and behavior is determined by the stories you carry about money from childhood, peer groups, and the specific decade you happened to come of age in. Housel's framing of 'reasonable beats rational' (because reasonable strategies are the ones you actually keep) explains more about why smart people make terrible money decisions than any of the textbook risk-tolerance frameworks. Read this if your investment strategy is sound on paper but you keep deviating from it.