The Psychology Of Money by Morgan Housel is widely considered as one of the most influential financial books of our age.

Rather than talking about raw numbers and formulas, the book focuses on habits and personality, arguing that most of our money decisions are driven by the stories we hear, not facts.

The book is over 253 pages long, and the audio summary, listed on YouTube, is about 1 hour and 43 minutes.

Full book: https://hostnezt.com/cssfiles/general/the-psychology-of-money-by-morgan-housel.pdf

While I didn’t finish the entire book, I listened to the audiobook summary a few times and found it very helpful. Unfortunately, it has been removed on YouTube.

This won’t help you get rich quick, but will teach you something more powerful—how to building a lasting relationship with money.

It will completely change the way you think about saving, spending, risk, success, and even happiness, because managing money well isn’t about knowing everything, but mastering a few key habits and sticking to them.

Allow me to share a few things I learned from the first ten chapters.

Chapter 1: No One’s Crazy.

Have you ever looked at the way someone spends money and thought, what are they thinking?

How could they:

• Earn RM2k salary and still buy a Honda Civic

• Buy lottery tickets every week

• Spend their entire RM6,000 income without saving a single cent?

It seems crazy, right?

But here’s the thing. They’re not crazy.

In their world, based on their life experiences, what they’re doing probably feels like the smartest move they’re making right now.

Once you understand this, you’ll stop judging others and look to your own financial habits.

The truth is, people don’t make decisions based on facts, they make them based on:

• Feelings

• Experiences

• And the world they grew up in.

Here’s an example. Imagine two kids born in a different time.

Michael (the first kid) was born into a rich family, where his dad’s monthly paycheck was 2-3x the annual income of average Malaysians. He lives in a 5,000 sq ft mansion, drives a Tesla at 23, and has 7 different credit cards.

Samantha (the next kid) was brought up during a recession, where her childhood was filled with whispers of their home getting repossessed by the bank, their parents struggling to put food on the table, and dad working multiple jobs just to send her to college.

Fast forward 20 years. Do you think these two people will:

• See money in the same way?

• View risk in the same way?

• Invest in the same way?

Of course not. They lived through completely different realities.

The first kid grew up from abundance and is probably more driven to take bold risks, while the second learned to protect every ringgit in her bank.

So, it’s no surprise that a money habit may seem smart to one, but completely insane to the other.

Because here’s a another hard truth Morgan tells us: You can read all the finance books in the world, but if you’ve never felt the panic of not having enough to pay rent, then you’ll never fully understand what money stress feels like.

Takeaway of Chapter 1:

No one’s crazy. We’re all just telling ourselves different stories about money, based on our surroundings and how we were brought up.

These stories come from experience, not logic.

Everyone’s financial decision makes sense to them, even if it doesn’t make sense to others.

So the next time you see someone making a “bad” financial decision, instead of asking: “Why are they so irresponsible?”, try asking: “What stories are they telling themselves?”

And when you make a mistake, rather kicking yourself in the foot, ask yourself: “What story was I believing at that time?”

Chapter 2: Luck And Risk.

Picture this.

Two people with the exact same drive and talent. They both had visionary ideas of changing the world and worked tirelessly.

One becomes a billionaire, while the other files for bankruptcy.

Why? What makes one person’s decision seem brilliant, while the other a huge mistake?

Here’s something that people hate to admit: success is never just a skill, and failure is never just a mistake.

There are two invisible forces always at work: Luck and Risk, which have a much bigger influence in our success and failure.

A powerful example of this truth comes from outside the world of money. In the book, When Breath Becomes Air, neurosurgeon Paul Kalanithi spent years training for one of the most demanding careers imaginable. 

He had:

• intellect

• work ethic

• and the compassion to become one of the best in his field.

By all measures, he was on the path to a remarkable life.

And then, at just 36, he was diagnosed with stage IV lung cancer.

Paul’s world crashed upside down almost overnight. The man who had spent his life studying how to save others now had to save himself.

No amount of discipline or brilliance could change what luck—or in this case, unluck—dealt him.

Paul poured what little time he had left into writing When Breath Becomes Air, a diary about facing death and searching for meaning in life.

But he never got to finish the final chapter.

The book was published after his death, with his wife Lucy writing the ending.

It’s one of the most moving reminders that the world is inherently unfair.

Takeaway of Chapter 2:

You can do everything right, yet still fail because of a small (or big) misfortune.

Skill and hard work matter, but they’re never always the full story.

This is the same with money.

We love to believe that success comes purely from smart decisions and hustle. But luck and risk are always in the background, quietly shaping outcomes in ways we can’t fully control.

Chapter 3: Never Enough

Bernie Madoff is remembered as the man behind the largest Ponzi scheme in history. But what many forget is that before the fraud, he was already one of the most successful men on Wall Street.

Madoff founded his investment firm in 1960, and for decades, it was completely legitimate. He was a pioneer in electronic trading, chaired the NASDAQ stock exchange, and built enormous wealth for himself and his family. By the 1980s, he was already rich, respected, and admired in financial circles.

And yet, that wasn’t enough.

At some point, Madoff…

Want to read the rest of Chapter 3 and my full summary of the first 10 chapters?

I’ve shared them exclusively with my WhatsApp members: