nenos 25/06/2023
Follow the money to see where it goes
Mr. Morgan is a former columnist as the Wall Street Journal, an investor at a venture capital firm Collaborative fund and have great insights into how psychology shape our relationship with money, emphasizes the importance of maintaining a good relationship with finances by adopting long-term value approaches, with empirical facts he proceeds by telling us about the dangers of overconfidence, the role of luck which plays a big part in our life and how to avoid a wide range of psychological traps which led so many to demise.
Most of the lessons we’ve been led to believe about money over the course of our lives can be imperiling to our own survival and the medicine is often too demoralizing to accept. What the author proposes is to look at money with the emotions and nuance optics rather than only physics and strict laws. Think about the investment atmosphere: When stakes are high and your investments are reduced to pennies, it’s natural to feel agony first because twice as much effort will be necessary to rebuild, then at last, you consider math.
If we have the least chance to hold a tangible dream which you have taken for granted so long ago, we pay the price even if the chances of winning are one in a million like lottery tickets. Why most Americans keep spending a huge percentage of their paycheck on a car, why we fiercely hope for a good global economy whilst disseminate envy to those who are so high in the ceiling of social comparison and ironically enough, we set high expectations to hit the ceiling ourselves?
The media plays a big part in how we behave and keeps on feeding poor money decisions. Can we blame them? Marketing matters because it works, the worthwhile tradeoff of fees become obvious only when it’s clear you’re paying one. Are they acting as morally presumptuous or just relying on ignorance? The main point is: they bend reasonable doubt at their will and every day, your long-term strategy holds hands with your fading intelligence and walk away further and further.
After consumed by frivolous things, we dive into a seduction which sounds smarter and more plausible: pessimism. Pessimism seems to have peoples undivided attention, it’s sounds intellectually captivating and oblivious to risk, but this chauvinism really stands? We made so much progress from economical growth to medical breakthroughs and social equality still, we know what gains more attention: The worst-case scenarios. This odyssey derives from imagination to avoid serious risks, and the financial forecasting usually doesn’t look highly upon single points of failure (Hence, the margin of safety).
Wealthy and rich are very separated words beyond semantics. Mr. Warren Buffett have been proving for so long his skill to staying wealthy and the main ingredients are: Behavior and books. We all want recipes, but what makes sense to one person don’t always make sense to another. Translating to investing strategies: Besides from basic principles of greed, it varies from what your goals are, the time horizon and the range of your flexibility for you to sleep well at night.
As the old saying goes: Happiness, as it’s said, is just results minus expectations. Aiming to be more reasonable than rational seems to be a more humble and sustainable approach for the “all too human” experience. Myself, I preach the jack of all trades approach, I recognize my own frugality, I keep trying to swallow inconvenient truths, I try my best to flee from seductive captured momentum, and to complacency: I won’t ever reach the person I am meant to be for the rest of my life.
Link to my highlights: https://drive.google.com/file/d/1nztpmSy0g6YRhqeBpd1RcoTndTyCxkzY/view?usp=share_link