In 'The Psychology of Money,' Morgan Housel delves into the psychological and emotional aspects of financial decisions. The book consists of 19 short stories that illustrate how personal history, worldview, emotions, and biases influence financial outcomes. Housel emphasizes the importance of behavior over knowledge in managing money, highlighting the power of compounding, the dangers of greed, and the pursuit of happiness beyond mere wealth accumulation. He advocates for a frugal lifestyle, long-term perspective, and a balanced approach to investing, stressing that financial success is more about mindset and discipline than about technical financial knowledge[2][3][4].
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Episode 3054:
Barney of TheEscapeArtist.me explains how to calculate your runway, why an emergency fund is essential, and how financial independence shifts your options and decision-making. More runway means more freedom, but the benefits plateau after a certain point, making it crucial to define what "enough" means for you.
Read along with the original article(s) here: https://theescapeartist.me/2021/10/19/the-more-runway-you-have-the-safer-you-are/
Quotes to ponder:
"The moral of this story is that the more runway you have, the safer you are."
"You need to have a margin of safety in your life. Some redundancy in your personal finances in case of redundancy in your career."
"It is HUGE to go from having no runway to having the ability to take a year off. But just going from 25x to 26x shouldn’t really change your life much."
Episode references:
The Psychology of Money by Morgan Housel: https://www.amazon.com/Psychology-Money-Timeless-lessons-happiness/dp/0857197681
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