Introduction

The most valuable part of this book is that it explicitly links personal finance with psychology.

Saving, investment strategies, decision-making—these have all been known as key parts of personal finance, but the psychological side is rarely explored, and that's what this book is all about. ( that’s one of the key reason why I choose this book. Because, I felt like the psychological part of money )

Key Takeaways

• Financial success is far more about how you behave than what you know.
• Luck and risk play a role in almost all outcomes. Individual effort can only get you so far. ( being lone crusader won’t make you Financially stable )
• Be careful about looking at specific examples of outcomes, and look for general patterns. ( just following a few Finance Gurus might won’t make any difference, but it’s upto you and your circumstances )
• The hardest financial skill is getting the goalpost to stop moving. ( 😅) And to do that, you have to stop comparing yourself to others, and start determining what is "enough" for yourself.

Alright this is something real Fuckin important and an area where I’m struggling mentally. As of now, all my friends have a new car. I can’t stop emphasizing how crucial it is to get the right car at the right time of your Career. Literelly, getting the right car is the second step in Iman Gadzhi Finance Youtube Video.

Buying a new car costs around $700 EMI in a month ( Canada )> that’s two weeks paycheck > you’ll get mobility. But you’ll be trapped in that loop. I’ve seen few people who are smart and still in a loop to pay their Car loans. I don’t want to be that guy. I can ride a used Honda Civic and think I’M THE KING 😁 The real issue here is constant comparison with others. LIKE, I’m not good enough without a new car, oh, I’m walking a lot.

Oh, wait for this, ones your Friends got cars they’ll go for trips and sometimes they intentionally avoid you. ( Personally I don’t care, that’s some good productive hours to work on myself ) Still some part of my Brain catchup with -ve patterns and start comparing myself to others. What to do about it ?

• One of the single most important things you can do as an investor is wait, means extend your time horizon.
• Staying wealthy requires some combination of paranoia and frugality.
• Always plan for something to go wrong, and for some large, unexpected expense.
• Controlling your time is the highest dividend money pays.
• No one is impressed by your possessions as much as you are. ( I FELT LIKE GETTING A SLAP )
• Building wealth has little to do with your income or investment returns, and lots to do with your savings rate.
• Past a certain level of income, what you need depends only on your ego.
• Aim to be reasonable with your finances, not completely rational. This will be more realistic long-term.
• We can't predict future outlier events. That's what makes them outliers. So factor it into your plan.
• You need to add room for error, and avoid financial ruin. Leverage—going into debt—pushes routine risk into potential for ruin.