“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.”
I am once again reading this fantastic book, its honestly got to be one of my favourite books to read. In this book he gives you 18 psychological lessons around money. These lessons really made me think about me conscious money spending and opened my mind up to how someone else may perceive my money habits or conduct their money habits.
In the first lesson its called No one's crazy.
This chapter talks about how one person's decision with their money may seem crazy to you, but to them it makes complete sense, “Every decision people make with money is justified by taking the information they have at the moment and plugging it into their unique mental model of how the world works.”
Everyone comes from different backgrounds with different experiences. Over the years and especially the younger years of an adult's life, their psychology around money evolves and is moulded to suit the environment. For some people, they grow up in a area or household with little spare money at the end of the month, compare this to a person who grows up in a wealthy neighbourhood with plenty of opportunity and with a family with surplus cash at the end of the month, each of these people will have a psychology of money on the two broad ends of the spectrum.
Taking this example, for the person who grew up with little surplus cash at the end of the month, being frugal and saving every penny would be attributed to the environment they grew up in. Comparing this to the person with ample opportunities and much surplus cash, they would generally be more inclined to invest their money, not just in the traditional sense of the stock market but also on experiences, knowledge and for fun.
“Their view of money was formed in different worlds. And when that’s the case, a view about money that one group of people think is outrageous can make perfect sense to another.”
The other 18 lessons are just as good, this book is definitely up in my top 5 books.