The Psychology of Money by Morgan Housel stands out in the realm of personal finance books because of the stories it shares and the easy to remember crisp writing. The Psychology of Money quotes are now all over the internet even if people don’t realize it’s a quote from Morgan’s writing.
Why does The Psychology of Money stand out as so memorable?
After you’ve read a few personal finance books it can feel like you’ve read them all. Most repeat the same concepts about frugal habits, paying off debt, and investing.
The Psychology of Money stands out among these books because it dives into deeper themes not typically covered in financial books.
It also shares the real life messy experience of making financial decisions.
Through 19 short stories exploring the way people think about money the book teaches you how behavior and thought patterns influence financial decisions.
The math of handling money is easy, but the emotions and thought patterns we all encounter in our own minds is much harder.
Haven’t read it yet? Get The Psychology of Money here.
Best Quotes From The Psychology of Money
In this post I share the quotes from The Psychology of Money that resonated with me.
I’ve broken down these quotes into topics like wealth, financial risk, and emotions and money. Hopefully these quotes help you think through some of the topics the drive all of our money decisions.
Quotes About Money
- “Money is everywhere, it affects all of us, and confuses most of us.”
- “Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.”
- “Saving is the gap between your ego and your income.”
- “Getting money is one thing. Keeping it is another.”
- “Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast.
- “Spending money to show people how much money you have is the fastest way to have less money.
- “People do some crazy things with money. But no one is crazy.
- “Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That’s when compounding runs wild.”
- “Good investing is not necessarily about making good decisions. It’s about consistently not screwing up.”
Handling Emotions, Behavior & Money
- “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.”
- “Doing well with money has a little to do with how smart you are and a lot to do with how you behave.”
- “I love Voltaire’s observation that “History never repeats itself; man always does.” It applies so well to how we behave with money.”
- “Aiming to be mostly reasonable works better than trying to be coldly rational.”
- “We all do crazy stuff with money, because we’re all relatively new to this game and what looks crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.”
- “To grasp why people bury themselves in debt you don’t need to study interest rates; you need to study the history of greed, insecurity, and optimism.”
Luck & Financial Risk Quotes
- “Luck and risk are siblings. They are both the reality that every outcome in life is guided by forces other than individual effort.”
- “If you give luck and risk their proper respect, you realize that when judging people’s financial success—both your own and others’—it’s never as good or as bad as it seems.”
- “When things are going extremely well, realize it’s not as good as you think. You are not invincible, and if you acknowledge that luck brought you success then you have to believe in luck’s cousin, risk, which can turn your story around just as quickly.”
- “There are many things never worth risking, no matter the potential gain.”
- “There is no reason to risk what you have and need for what you don’t have and don’t need.”
- “Things that have never happened before happen all the time.”
- “Risk is what’s left over when you think you’ve thought of everything.”
- “The trick when dealing with failure is arranging your financial life in a way that a bad investment here and a missed financial goal there won’t wipe you out so you can keep playing until the odds fall in your favor.”
- “Planning is important, but the most important part of every plan is to plan on the plan not going according to plan.”
- “Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes.”
Quotes About Wealth
- “There are a million ways to get wealthy, and plenty of books on how to do so. But there’s only one way to stay wealthy: some combination of frugality and paranoia.”
- “You can be wrong half the time and still make a fortune.”
- “Controlling your time is the highest dividend money pays.”
- “The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.”
- “Use money to gain control over your time, because not having control of your time is such a powerful and universal drag on happiness. The ability to do what you want, when you want, with who you want, for as long as you want to, pays the highest dividend that exists in finance.”
- “No one is impressed with your possessions as much as you are.”
- “Beware taking financial cues from people playing a different game than you are.”
- “Everything has a price, but not all prices appear on labels.”
More Great The Psychology of Money Quotes
- “If expectations rise with results there is no logic in striving for more because you’ll feel the same after putting in extra effort.”
- “Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.”
- “We all think we know how the world works. But we’ve all only experienced a tiny sliver of it.”
- “Modern capitalism is a pro at two things: generating wealth and generating envy. Perhaps they go hand in hand; wanting to surpass your peers can be the fuel of hard work. But life isn’t any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.”
- “Progress happens too slowly to notice, but setbacks happen too quickly to ignore.”
Morgan Housel covers a lot of topics other personal finance books ignore or just briefly touch on the surface. Diving deep into greed, happiness, and ego will cause a lot of self-reflection while you read.
Which quote from The Psychology of Money by Morgan Housel made you pause to reconsider something?
Looking for more financial inspiration? Check out these posts:
- 45+ Money Affirmations For Financial Abundance
- 111 Quotes To Motivate Your Debt Free Journey
- 10 Ways To Take Control Of Your Finances
Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.
Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.