Soft skills in investing

The most interesting takeaways from Morgan Housel’s book ‘The Psychology of Money’

- ANAND TANDON

A by-product of a booming equity market is the rush of how-to books that get published, each attempting to assure its reader that the elusive pot of investment gold is there for the taking for anyone who survives reading the next 250 pages of the author’s tome. In that cacophony, it is rare indeed to find a true gem that will likely outlast the current bull run and make it to the list of investment classics you would want on your bookshelf for a long time to come. I refer to Morgan Housel’s ‘The Psychology of Money’. Writer, columnist and partner of Collaborative Fund, Morgan Housel has written a book that displays maturity well beyond his years.

Housel writes about an approach to personal finance that stresses that ‘personal’ is more important than ‘finance’. “Financial success is not a hard science. It’s a soft skill, where how you behave is more important that what you know.” For people who are intimidated with the jargon of investing, this should be music to the ears. Housel calls this “the psychology of money”.

Your personal experience determines your approach to investment