This recent read of mine is an exceptional book. Unlike typical financial literature that provides investment tips, quantitative trading, and technical analysis, this book delves into how we perceive money, our behavior around it, and why we chase it. It also discusses what constitutes a healthy relationship with money. The discussions are profound and prompt deep thinking about the ironies presented.
One idea that resonated with me is the notion that becoming rich may require more than we initially presume. We often fantasize about wealth without considering the inherent risks. For instance, a trader must embrace significant risks in his strategy to make substantial gains. Once successful, their risk appetite increases, potentially leading to a total loss. The author suggests that recognizing when enough is enough is an essential skill. This reminded me of Elon Musk's comment in the Lex Fridman interview, that many people wanted to be him, but he didn’t believe that was happy to live his life. Similarly, Jack Ma once expressed that his happiest time was when he was a teacher earning just enough money, not when he was a billionaire.
The book also argues that when people chase money, they're actually seeking admiration and respect. This rings true in today's world where people frequently post on social media in search of attention, love, and respect from their peers. The author suggests that understanding this dynamic might lead us to stop chasing money and instead spend more time helping others, which could garner more respect than merely showing off wealth.
Risk is another key theme in the book. Regardless of one's skills, predicting the future with certainty is impossible. Even the most confident predictions have a margin of error. The author highlights the importance of managing this uncertainty. Your financial plan may work 99% of the time, but if the 1% event occurs, it could devastate your wealth and freedom. The book doesn't discourage risks but reminds us that adverse events can occur, no matter how unlikely they seem.
The first chapter, "No one's crazy," is also noteworthy. People's views on money can vary significantly depending on their location or generation. There is no universal right or wrong. For instance, I always believed in working hard, earning more, and spending wisely. However, those who don't follow this approach aren't necessarily wrong. Their attitudes towards money could be shaped by their unstable environment. If the future is uncertain, it makes sense to spend money as soon as it's available.
In conclusion, this book offers valuable insights into our attitudes towards money. It reminds us to maintain an objective understanding of money—it can improve our quality of life and help us achieve our goals, but we should also avoid getting lost in it.