Psychology of Money remains one of my favourite books I have read in the last 3 years. Recently, I started a reading task. The aim is to read a minimum of 5 pages in a book daily. It is a baby step to start for people who are extremely busy with work. I believe the secrets to everything are hidden in books. Thus, we have to search for them and make the best use of those secrets.
Morgan Housel shared his experience when he was working in a hotel and a young tech CEO lodged in to have fun. According to him, the guy was spending like he owned a money tree. One scenario was when he gave stacks of cash to his assistant to get gold coins worth $1,000 each and they went to the Pacific Ocean and tossed the coins like rocks in the water. After some time, he went completely broke.
Making money is easy, but maintaining money needs a good behavioural skill. How you react to your environment determines how you will end. You can have the degrees and the education, but if you lack the right attitudes toward money management and practice proper frugality, you will always see yourself at the Botton no matter how you climb in finance.
There was a janitor, gas station attendant, and investor, and he ended up as a philanthropist. The question is how can a janitor end up as a philanthropist? Ronald Read was born in a rural environment. There was nothing serious to say about his early life. He finished high school and worked as a janitor for 17 years and fixed cars for 25 years. At 38, he managed to buy a 2 bedroom, and he lived there with his wife. He lost his wife when he was 50 and never remarried. He died in 2014 at the age of 92, but it was surprising to everyone that he had cash assets worth over $8 million. He gave $2m to his stepchild and $6m to charity. His life does not look like it, but that is what he left. Ronald invested in stock and everything went well and handed him the millions.
Richard Fuscone was the opposite of Ronald. He had a great education. Cool degrees and everything you can think of. He was a CEO of a prestigious company and he retired at the age of 40 to be a philanthropist. He built a mansion with 2 elevators, 11 bathrooms, 2 pools and several expensive features that made him spend over $90,000 a month to maintain. The 2008 global financial hit everyone and Richard was not exempted. He went bankrupt after some years and ran into serious debt that his assets could not pay.
The aim of this is not to be just one of them but to understand that finance is more of how you behave and not what you know. You may have the study and degree and still not practice. Your behaviour determines how you will end.
There is no how a trained doctor can do better than a pilot in the aeroplane. There is no how a trained civil engineer can do better than a doctor in the hospital. There is no how a software developer can do better than a chemist in a laboratory, but it can happen in investment and finance. Your behaviour is more important than your education. Among the factors to consider are the Diderot effect and keeping up with the Joneses.
Build what will last.
I am tykee, I code and write
