How to saving more reasonable than ever

I’ve always claimed to be a little financially savvy. But the emotional side to money is something most of us, myself included, struggle with.

Morgan Housel’s book “The Psychology of Money” helped me realize some mental aspects of money management that I was not able to handle.  And this is what I learned after reading this book.

No.1. There is no single “right way” to access money

Everyone has their own opinion about money. Some seem to be diligently saving and investing for the future, while others are “living for the moment”, working and playing with no financial game plan at all.

Personally, I fall into the savings and investment category. But I’m also often tempted to see other people get something good that I really want. However, with the help of this book, I realized that there is no right or wrong way to manage your money. You just need to do what aligns with your values.

For me, the value I’m after here is saving a large portion of my income with the goal of achieving financial freedom at some point in the future.

But, everyone has to find for themselves what is right for them. Not everyone wants to pursue FIRE (financial independence/early retirement). Likewise, not everyone wants to spend most of their income on material expenses.

The “right” way of spending is different for each person. Don’t just because you see a trend is booming that you want to be the same, the important thing here is to calm down and make the best decisions possible for yourself. And with that’s the decision, you will never regret.

Read More: Cach nhan 500k tu Momo

No.2. “Rational money choice” is better than “rational money choice”

As you delve into effective money management, you may find yourself torn between looking at the matter from a financial perspective or from a peace of mind.

Accordingly, a question will arise in your mind whether you should invest more (financial perspective) or pay off your mortgage early (for peace of mind). Personally, I’ve always been a bit conflicted about this.

My mind told me I could go a long way in the long run if I prioritized investing over paying off my mortgage with the low interest rate attached. But my heart tells me I’ll sleep better if I get rid of my mortgage.

Chapter 11 of the book, titled “Rational > Rational”, helped me clarify this “internal” debate. I realized that paying off my mortgage early was a sensible option because it helped me sleep better. Either way, I’m making a smart decision with my money given my situation.

No.3. Take the time to learn what “enough money” is for yourself

Why do some people even dare to do very crazy things, such as tax evasion, Ponzi… to earn more money? Personally, I used to find it very difficult to understand why there are people who risk everything for a little cash.

In the book, author Housel explains why rich people do these greedy acts, because they never determine how much money is “enough” for them.

I personally then took some time to discover what was “enough” for me. As someone who is pursuing financial independence, I decided to set a reasonable and “enough” number to support the whole family.

No matter how much money you have, it will never be enough unless you decide that you already have enough. If you never have enough, you will never be able to stop chasing the next coin.

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