Book Review — The Psychology of Money

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Cross-posted from Goodreads

The book presents a collection of simple and neat ideas around how to think about managing your money. Notice my emphasis on “how to think about managing” rather than “how to manage.” I guess the title itself makes it abundantly clear that rather than discussing “proven” formulae for increasing your wealth it will talk about the psychological or emotional part of wealth management.

It’s much like how the book Never Split the Difference: Negotiating As If Your Life Depended On It discusses the various tactics of negotiating in the light of human behavior and emotions. So, rather than giving you step-by-step techniques to increase money, it tries to convince you to change your mindset and lifestyle in order to be wealthy. The author nicely backs his arguments up with some good real-world stories and examples. I found it thought-provoking enough to take away a lot of ideas for my own good, and note them down in my personal diary.

If I were to reduce the book to one or two lines, it would be this — the only way to get rich is to save more, be consistent and patient with your investments, believe in the power of compounding, and the ideal financial goal is to be able to do whatever the fish you want to do in life.

The postscript chapter on how the American economy became the biggest in the world through self-sustenance and internal growth is an interesting read. Not to be skipped!

Book Review — Never Split the Difference

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Cross-posted from Goodreads

Practical, on-the-ground tips from a long-time FBI hostage negotiator. While some tips from hostage crises may not translate 1:1 to business or personal negotiations, most of them do (you’ll instinctively feel so).

The author does an excellent job in pushing across two major takeaways — (a) you cannot separate out emotion from negotiation (rationality is intrinsically based on emotions or worldviews) and (b) do not run/shy away from difficult conversations even when you feel uncomfortable (conflict, however small or big, is part of human interactions and not such a bad thing – it requires collaboration to resolve it).

Tips shared in the book certainly feel more modern than the techniques presented in You Can Negotiate Anything: The World’s Best Negotiator Tells You How To Get What You Want (Voss even explicitly points that out somewhere in the middle of the book). Still, a lot of stuff in Cohen’s book feels still relevant, at least from a confidence-boosting perspective. I’d take good parts from both the books to test my newly learned skills in the real world.