Reading Library · Economics & Markets Tier 2: Supporting Reading

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

by Morgan Housel (2020)

★★★★★ 5/5

Behavioral insights on how people actually think about money and wealth

"The first rule of compounding: Never interrupt it unnecessarily."

— Morgan Housel

My Review

Housel's behavioral finance insights connect directly to survival strategies. His emphasis on survival over optimization, compounding, and tail-event thinking maps to biological concepts of hibernation reserves and long-term strategy.

Why It Matters

Housel connects financial behavior to deeper psychological patterns that have biological roots. His emphasis on survival, reserves, and long-term thinking aligns with biological survival strategies.

Key Ideas

  • Survival is the prerequisite for compounding
  • Tail events drive most outcomes
  • Enough: knowing when to stop
  • Room for error is essential

How It Connects to This Framework

Book 2's hibernation and reserve strategies draw on Housel's survival-first thinking. The emphasis on tail events connects to Black Swan concepts.

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