The Psychology of Money by Morgan Housel

I was expecting a boring normal finance book: invest every paycheck, save as much as you can, early retirement etc. After all that is what finance books contain. 

However, this is a book that deserves judging by its title - it really talks about the psychology of money. Let the author convince you:

 The premise of this book is that doing well with money has a little to do with how smart you are and a lot to do with how you behave. And behavior is hard to teach, even to really smart people.

 Intelligence and behaviour are two separate things:

A genius who loses control of their emotions can be a financial disaster. The opposite is also true. Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.

The role of luck in investment as per a Nobel Laurate:

Years ago I asked economist Robert Shiller, who won the Nobel Prize in economics, "What do you want to know about investing that we can't know?" "The exact role of luck in successful outcomes," he answered. I love that response, because no one actually thinks luck doesn't play a role in financial success. But since it's hard to quantify luck and rude to suggest people's success is owed to it, the default stance is often to implicitly ignore luck as a factor of success.

When all our circumstances are unique, judging others is useless.

Be careful who you praise and admire. Be careful who you lock down upon and wish to avoid becoming. Or, just be careful when assuming that 100% of outcomes can be attributed to effort and decisions. After my son was born, I wrote him a letter that said, in part: Some people are born into families that encourage education; others are against it. Some are born into flourishing economies encouraging of entrepreneurship; others are born into war and destitution. I want you to be successful, and I want you to earn it. But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.

"Enough"

John Bogle, the Vanguard founder who passed away in 2019, once told a story about money that highlights something we don't think about enough: At a party given by a billionaire on Shelter Island, Kurt Vonnegut inforis his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, "Yes, but I have something he will never have ... enough."
Enough. I was stunned by the simple eloquence of that word stunned for two reasons: first, because I have been given so much in my own life and, second, because Joseph Heller couldn't have been more accurate. For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails.

As one of my friends once said, reputation is a temporary thing.

After he was released from prison Rajat Gupta told The New York
Times he had learned a lesson:
Don't get too attached to anything your reputation, your accomplishments or any of it. I think about it now, what does it matter? O.K., this thing unjustly destroyed my reputation.
That's only troubling if I am so attached to my reputation.

Compounding is surely easy to miss.

The counterintuitive nature of compounding leads even the smartest of us to overlook its power. In 2004 Bill Gates criticized the new Gmail, wondering why anyone would need a gigabyte of storage. Author Steven Levy wrote, "Despite his currency with cutting-edge technologies, his mentality was anchored in the old paradigm of storage being a commodity that must be conserved." You never get accustomed to how quickly things can grow.
The danger here is that when compounding isn't intuitive we often ignore its potential and focus on solving problems through other means. Not because we're overthinking, but because we rarely stop to consider compounding potential.

The highest form of wealth

The highest form of wealth is the ability to wake up every morning and say, "I can do whatever I want today."
People want to become wealthier to make them happier.
Happiness is a complicated subject because everyone's different.
But if there's a common denominator in happiness a universal fuel of joy it's that people want to control their lives.
The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.

Money is time... indeed.

Money's greatest intrinsic value and this can't be overstated-is its ability to give you control over your time. To obtain, bit by bit, a level of independence and autonomy that comes from unspent assets that give you greater control over what you can do and when you can do it.
A small amount of wealth means the ability to take a few days off work when you're sick without breaking the bank. Gaining that ability is huge if you don't have it.
A bit more means waiting for a good job to come around after you get laid off, rather than having to take the first one you find.
That can be life changing.
Six months' emergency expenses means not being terrified of your boss, because you know you won't be ruined if you have to take some time off to find a new job.
More still means the ability to take a job with lower pay but flexible hours. Maybe one with a shorter commute. Or being able to deal with a medical emergency without the added burden of worrying about how you'll pay for it.
Then there's retiring when you want to, instead of when you need to.

"..what sits below your ego."

Past a certain level of income, what you need is just what sits below your ego.
Everyone needs the basics. Once they're covered there's another level of comfortable basics, and past that there's basics that are both comfortable, entertaining, and enlightening.
But spending beyond a pretty low level of materialism is mostly a reflection of ego approaching income, a way to spend money to show people that you have (or had) money.
Think of it like this, and one of the most powerful ways to increase your savings isn't to raise your income. It's to raise your humility.
When you define savings as the gap between your ego and your income you realize why many people with decent incomes save so little. It's a daily struggle against instincts to extend your peacock feathers to their outermost limits and keep up with others doing
the same.
People with enduring personal finance success not necessarily those with high incomes- tend to have a propensity to not give a damn what others think about them.

Consistency does not exist.

Jack Bogle, the late founder of Vanguard, spent his career on a crusade to promote low-cost passive index investing. Many thought it interesting that his son found a career as an active, high-fee hedge fund and mutual fund manager. Bogle the man who said high-fee funds violate "the humble rules of arithmetic"-invested some of his own money in his son's funds. What's the explanation?
"We do some things for family reasons," Bogle told The Wall Street Journal. "If it's not consistent, well, life isn't always consistent. "
Indeed, it rarely is.

This confirms the belief of being conservative with money and resources.

Bill Gates understood this well. When Microsoft was a young company, he said he "came up with this incredibly conservative approach that I wanted to have enough money in the bank to pay a year's worth of payroll even if we didn't get any payments coming in."Warren Buffett expressed a similar idea when he told Berkshire Hathaway shareholders in 2008: "I have pledged to you, the rating agencies and myself -to always run Berkshire with more than ample cash ... When forced to choose, I will not trade even a night's sleep for the chance of extra profits."

Avoiding single points of failure.

If there's one way to guard against their damage, it's avoiding single points of failure.
A good rule of thumb for a lot of things in life is that everything that can break will eventually break. So if many things rely on one thing working, and that thing breaks, you are counting the days to catastrophe. That's a single point of failure.
Some people are remarkably good at avoiding single points of failure. Most critical systems on airplanes have backups, and the backups often have backups. Modern jets have four redundant electrical systems. You can fly with one engine and technically land with none, as every jet must be capable of stopping on a runway with its brakes alone, without thrust reverse from its engines. Suspension bridges can similarly lose many of their cables without falling.
The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.
The trick that often goes overlooked even by the wealthiest is what we saw in chapter to: realizing that you don't need a specific reason to save. It's fine to save for a car, or a home, or for retirement.
But it's equally important to save for things you can't possibly predict or even comprehend- the financial equivalent of field mice.

Comparison is the thief of joy.

But while we can see how much money other people spend on cars, homes, clothes, and vacations, we don't get to see their goals, worries, and aspirations. A young lawyer aiming to be a partner at a prestigious law firm might need to maintain an appearance that I, a writer who can work in sweatpants, have no need for.
But when his purchases set my own expectations, I'm wandering down a path of potential disappointment because I'm spending the money without the career boost he's getting. We might not even have different styles. We're just playing a different game. It took me years to figure this out.