5 Lessons I Learned From The Psychology of Money By Morgan Housel


During my morning runs this summer, I was able to take advantage of this time to enjoy the audiobook The Psychology of Money by Morgan Housel. This book provides readers with a deep dive into their behaviour with money while highlighting lessons on wealth, greed, and happiness. Housel explores 19 short stories about strange ways people behave with money, along with the best ways to rethink these behaviours and focus on what aspects are the most important in our lives. I will share five of the top lessons that I learned while listening to this book, and I hope that some of these lessons will resonate with you.

Never stop saving

The first lesson is the fact that we should never stop saving. Even when one thinks that the amount is small, it adds up and allows you to be financially independent in the long run. It also allows you to free yourself from some financial debt and focus on your wants. Financial independence is equated with your saving rate as this is something you can control. Therefore, concentrating on having lower expenses will allow you to keep saving and to build wealth. Think of saving as flexibility. If you can choose when you have to save and spend on your own terms, this is a powerful ability.


Let’s face it; we are all different. When you equate money to a certain level of happiness, the amount allocated to achieve financial freedom is subjective for everyone. People want to control their lives, and money is one of the tools that help control what you can do and when you can do it. Financial independence and autonomy are the real sources of joy that derive from the freedom that money provides you when you are cautious about saving and spending.

Wealth is hidden

We often associate wealth as the materialistic objects that one possesses, such as homes, cars, jewelry, clothing etc., but in reality, it’s everything that we don’t see. We tend not to classify wealth that is hidden because we can’t conceptualize it. However, it is all about the work behind the scenes that are the most significant contributing factor to wealth. This lesson goes back to the earlier concept of saving; you are accumulating wealth rather than spending the money you have. This offers you flexibility and growth, two options that we often long for, and we need to start enacting this in our everyday lives.

The World Is Full Of Surprises

 If we have learned one thing this year, it is that the world is full of surprises and that changes can happen at any moment without notice. With the Coronavirus, our financial and investing industry had many ups and downs, and it just proved that we had to adapt to the world’s current context. The type of change we have seen is unprecedented. With culture and generational shifts, changes are bound to happen and will.

There’s a Price Tag for Everything

Wouldn’t it be nice if everything in life was free? However, we all know that this would be impossible. Often, the price tag of something may not be apparent. It only becomes evident when the bill is overdue. Then you realize that the experience does not associate with the price tag you were willing to pay. People are eager to spend money on trivial items but are less inclined to spend on investing. This is due to the lack of immediate reward or gratification and increased risk perception and involvement. A reminder that nothing worthwhile is free. Always be ready to define your cost of success and be prepared to foot the bill. Have these five lessons resonated with you, or were you able to learn something new? I was happy to share some of the lessons that stuck most with me, and I hope these can apply in some of your own lives. If you want to learn more and take a deep dive into this book, go pick up your copy at your local bookstore!

Written by Duane Francis, Portfolio Manager

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