The Psychology of Money: Unlocking the Secrets

The psychology of money is a deeper look at how we deal with money.

In fact, there is a big gap between knowing a story and doing it the way we know it. It’s like spending weeks watching training videos to learn self-defense techniques. In this situation, we know how to behave in times of danger. but does this knowledge make us react the same way at the moment of action?

This story is also about money and how to work with it.

Most of us, especially those who are active in the world of investment or have a significant income now, think that they know how to deal with money.

But in fact, the measure of knowing them is their ability to invest, manage money and be profitable. In this episode, we go to the book “The Psychology of Money” by “Morgan Housel” and look for a new window to look at money alongside his talks. If you feel that your way of dealing with money has not matured and there is still a lot to learn, stay with us until the end of this story.

Why Do People Have Different Attitudes Towards Money?

It may seem at first glance that some ambidextrous people are destroying wonderful situations in their lives.

This is despite the fact that they don’t feel that way at all, and maybe in their hearts they say a big “well done” to themselves.

What’s more interesting is that they have the same opinion in front of people who make different financial decisions and think to themselves that others must have gone crazy when they made those decisions.

The reason for these behaviors and judgments is nothing but the influence of the place of birth and growth of people on their mind and behavior. Let us explain more.

When a person who has never faced financial challenges in his life enters the capital market. he considers the risks very small and even considers them as investment salt and something exciting. Because concepts like “poverty”, “nonexistence” and “lack” are not defined in his inner vocabulary.

On the other hand, someone who grew up in poverty looks at the risks of the capital market and does not want to deal with them. Because he knows very well that if he makes a mistake in his predictions, he will have to pay for it with his valuable capital. This incident causes a difference in people’s behavior with money, which is completely understandable.

Psychology of Money: Unveiling the Two Sides of Victory and Defeat

The line between victory and defeat is much narrower than a hair. But the results it shows are much different than expected. The thing to know about victory and defeat is that these two always move side by side.

Knowing this helps us not to judge too quickly and superficially about the reason for the success or failure of others. Because all successes do not happen due to hard and exhausting efforts or all failures due to laziness and lack of responsibility.

In the meantime, there are many factors that go hand in hand, and their influence should not be ignored. This issue gives us a good reason not to be complacent about our victories and not to count defeat as the end of the line. Our task is to try smartly, learn from mistakes and take new steps. As long as we remember this, we are on the right track.

Beware of the Hidden Risks You’re Taking

An interesting part that we cover in the psychology of money is “learning to stop”. Man’s greed for having more can lead him to the success he dreamed of; But if this flaming fire is not controlled, when it reaches success, it will catch fire like a fire that reaches a fuel warehouse and destroy everything.

The pages of investment history are full of rich people who blew away all their wealth and credibility overnight with their wrong decisions. To control greed and even use it usefully, you must have limits for yourself. It’s good to always be moving forward, but you shouldn’t let the madness of greed cloud your logic and lead you to decisions you would never normally have considered.

How Simple Formulas Yield Unexpected Outcomes

Most of us read the success stories of very rich people and think to ourselves that they must have known some complicated secret.

But in reality, the story is much simpler than these words.

Maybe going up and down the charts, doing fine and big analysis or even getting help from robots will make us have a profitable investment. but this does not mean that we can definitely get rich in the near future.

Because it’s the retention of the gains that produces amazing results, not just the acquisition of them.

In fact, the story is tied to the psychology of money. Simply put, if you have the gift of patience, you can hope that combining this trait with your investments will make you rich.

Waiting is a method that great investors like Warren Buffett and his teacher Benjamin Graham used to achieve great wealth. Undoubtedly,

other factors such as mastering the investment story were also involved in this story, but the main secret is to wait. If you are focused on short-term goals in your investments and don’t like to wait, you are walking in the opposite direction of the flow of wealth.

At least try to make part of your investment with long-term goals. This story can make a big difference in your financial future.

Psychology of Money: From Wealth Creation to Wealth Preservation

The problem is this!
There is no secret to getting rich anymore. You can find thousands of ways to get rich by going through different books and doing a little research; From turning your passion into a source of income to partnering in other people’s businesses, there are direct or indirect ways to earn wealth. In the meantime, what remains hidden from our view is the method of “preservation of wealth”.

There are many people in every corner of the world who have staggering current income. This shows that they have learned the method of acquiring wealth well. But again, in the same corners, we see people who have become full-fledged poor due to their inability to preserve their wealth. It can be concluded that earning money is only half of the road to wealth. The continuation of the path goes back to the story of our efforts to preserve that money.

How To Protect Our Money?

Perhaps one of the most straightforward ways to protect our hard-earned money is pessimism.

There is a famous saying in the psychology of money that says: “Be optimistic in life and pessimistic in work.”

Because optimism in work and adventures related to money leads us to make strange and illogical decisions; For example, we may think of an investment method as a magic version due to yesterday’s financial success and want to invest more and more on it.

This kind of optimism that leads us headlong into the pit of failure is one of the biggest causes of bankruptcy in the investment world.

Therefore, when investing, be as pessimistic as possible; In the way you use it, in the way you used to use it, in the advice you hear, in the highly successful contributions you see, and in the unplanned decisions you make in critical situations.

This pessimism like a guardian angel protects you, your capital and the blow you might inflict on your loved ones.

Losing In The Stock Market Is Normal

Part of the psychology of money points to the fact that in the capital market, the amount of mistakes is much more than victories.

This is the natural trend of the stock market. Because everything is not what it seems. This is the first lesson that successful investors learn. When you know that failure will be your companion in the capital game, you gain the ability to control your reaction to failure. Apart from this, the victories of this market also have a story for themselves.

The story of capital market victories reminds us of the “80-20 principle”.

Because a very large percentage of the financial success of investors owes to their smallest victories that have brought great returns.

You have to learn that there is no such thing as a “perfect” outsider in the world of investing. If you can keep yourself average, you are considered a genius!

Your Greatest Gain From Wealth Is To Gain Freedom

One of the hidden reasons behind the story of wealth and profit is freedom.

The most glorious kind of freedom is spiritual freedom. That you can do your favorite work whenever you want, be with your favorite people and do something you enjoy.

Most people are somehow slaves to their work and life. Money can buy their freedom. When we have enough money, we can go without worry to the kind of life we have always dreamed of.

Money gives us the feeling that we can take control of our lives and take them in any direction we want. This is an event that many people do not experience in their lifetime.

Instead of feeling free and in control of their lives, they feel enslaved and even victims. Following this issue, they always want to blame others and shirk their responsibilities. Having enough money invites happiness into people’s lives.

More Work, More Money, Less Joy! Psychology of Money

What was?! Wasn’t it supposed that by earning more money, we could have happiness in our lives? So why does the psychology of money show that people today experience less happiness even though they earn more? The secret of this story is not ending the working hours. Let us explain more.

In the past, when most of the work was physical, every employee would go to work at the beginning of an hour, he would finish his work at the end of a certain hour, and he could use the rest of his waking time for himself; But most of the works that exist in our age are intellectual.

The same thing makes the employee leave his office, but every minute and second he thinks about the work that he has not finished yet and the idea that his boss will ask for first thing in the morning! This means that the employee’s body goes home, but his mind is constantly working. In fact, his work is never finished.

In Search of the Elusive ‘Happy Killer

The problem that we can call as “happiness killer” is intellectual tasks and not finishing working hours.

Intellectual works cannot be seen, but they take energy from a person much more than imagined and stress him. When the mind is busy, there is no time left to spend it finding joy in life or doing things it likes. A tired mind will not find a way to spend more money and get happiness out of it.

If he spends the money, he will not find time to enjoy it! Previous generations had control over their time, but today’s generation of humans is always available thanks to the advancement of technology, the Internet, mobile phones and laptops, and this creates an unreasonable expectation in employers that they can always be ready to serve!

Shutting down the body and mind is a pure alchemy that you can restore with the wealth you have accumulated.

People Are Thirsty For Respect, Not Wealth

Dealing with the psychology of money shares some strange secrets with us. Normally we think that money is the ultimate thing we want; That car, that villa, that shop, that arcade, that beach and even that specific person, is our ultimate desire in life.

But in reality, we are thirsty for the attention and respect that riding in that car, living in that house or talking to that person grows in us. Unfortunately, the wrong way that most people take is tying this attention and respect to wealth that they don’t have.

They think to themselves that if one day they get such wealth and facilities, others will automatically pay more attention, respect and even love them based on an unwritten contract.

At the same time, attracting the attention of real people, the ones we want to have a special place in our lives, has nothing to do with money.

Whether we are rich or poor, those who are real stay by our side. The only art of money is that it makes life easier for us. But it does not have the power to buy us respect or affection. These things cannot be bought with money, you have to earn them with your heart and soul.

You Don’t Look Rich By Spending Money! Psychology of Money

The term “new to the era” is not so much a misnomer.

Usually, this term is applied to those who have recently risen from poverty to wealth during a financial leap. These people and many others who have reached wealth even slowly use every opportunity to show their wealth to others.

Because they themselves are not used to the new situation and the wealth they have and they don’t even believe it.

Their image of themselves is still that of a person who has a terrible financial situation and does not know how he is going to spend his day tomorrow.

If you look at the fate of lottery winners, you can fully understand this story.

Almost most of the lottery winners lost their happiness after winning, their loved ones left them, and even instead of getting rich, their work went to sleep. This story goes back to their poor minds.

A rich mind keeps you rich; A poor mind will destroy you!

That is why they say that you should first become rich in your mind and then find physical wealth.

Because then you don’t want to show off your wealth to others. You know that you are rich and this wealth is yours. So you don’t need to show it to yourself and others in different – often very expensive – ways.

To be rich and stay rich, you should not spend your money to show off your money!

Of course, there is worse than that, and that is when you spend yourself without money and go into debt with optimism about your financial future. The best advice we can give you is don’t look rich, be rich!

Save at any income level

Perhaps the biggest message in the book Psychology of Money is saving.

First of all, let’s clear up an important misunderstanding about wealth.

Wealth is not about your ability to invest, increase your income and earn returns. Wealth is the money you have and keep in the bank even with zero percent interest.

It is money that gives you the power to control your time, the ability to invest – albeit only a small part of it – and peace of mind.

The best thing to know about saving is to save without a specific goal and just to save.

Think of it as building steel walls around the peace of your life and protecting your happiness.

Remember that your income can make you rich if you keep your expenses steady and save the rest of your money.

If at the same time as your income grows and you meet the necessary expenses of your life and peace, if you still look for spending for the purpose of showing off or showing off, know that you are wasting your wealth. Protect your money from thieves, fraudsters and of course your own greed.

This is the main way to get rich.

Don’t look for excellence

Some people who work in the capital market, especially those who have just stepped on this path, want to show their high performance.

For this reason, they constantly jump from one branch to another, seek refuge from one strategy to another, and are always looking for a new way.

In a market where failure is considered one of its blood brothers and being a genius means moving in an average level, this is a pointless task and it can even be said that it is considered to be a step in the wrong direction.

We must remember that whether we like it or not, we are emotional beings. Therefore, if our logical method cannot bring our heart along with it, we will surprisingly engage in strange behavior and may throw ourselves down the slope of financial collapse.

Therefore, when formulating an investment strategy, do not seek to be perfect, but base it on getting a good feeling about your performance. Because then you will stick to the decision you make, the goal you set and your strategy.

Investing is a soft science

As you know, science has two faces, soft and hard. Things like medicine, geology, etc. are included in the category of hard sciences.

Because the structure of the human body and the earth has not changed from the past until now. But other things such as investment science are included in the category of soft sciences. Because they change as you wish.

The reason for this change is people’s feelings and they make decisions based on their feelings. With this account, we cannot say by studying the investment history that yes, because this happened in the past, therefore, it will happen in the future. Because the history of investment was formed by the same emotional people.

What was the main message of “Morgan Housel” in the book “The Psychology of Money”?

In the book “The Psychology of Money”, Morgan Housel sought to show our irrational behavior in dealing with money.

As a result of years of working with money and capital, he came to the conclusion that our financial behaviors are more emotional than having logical and principled roots.

Morgan Housel observed this story even in economic and stock market crises. Re-paying attention to decisions, examining them from several perspectives and even accepting the constant companionship of failure with investment were some of the messages that Morgan intended to convey to his readers in this book.

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