Ankur Warikoo

Ankur Warikoo



"Psychology of Money" by @morganhousel is one of the simplest yet most powerful books ever written. It has been a great teacher for me & influenced my life in a meaningful manner. Here are my 10 learnings of life from this book 👇

1. Being rich vs being wealthy Whenever you go to someone's lavish house, you will always think: "Wow! What a magnificent & spacious house" But you'll never think: "Wow! What a massive loan they must have on their head."

We tend to play on a simple equation, being rich = things people have that we can see. However, being wealthy is extremely different. Being wealthy means you earn without spending your time. Your money works for you, not the other way around.

2. Controlling your time is the biggest wealth If you are earning money just for the sake of earning money & spending it on lavish things, then you're running on a lifelong treadmill.

There will always be a new thing that you would want to buy. I can guarantee that there is no end to this cycle. But if you start earning money with the motivation of buying more time from your money, THAT will be the true value of money.

3. Staying wealthy vs getting wealthy Earning money is much easier than growing that money (relatively).

Most people can become rich, but only a few can stay rich for their lives. If you don't find a way to beat inflation every year, you're losing your wealth. #FDisNOTanInvestment

4. Compounding: 8th wonder of the world By investing regularly in instruments that give you quality returns, you are bound to get multiplied returns. If you keep investing your time in learning new skills, it will multiply & it will make you a person who is irreplaceable.

If you understand compounding you realize the most important question is not “How can I earn the highest returns?” It’s, “What are the best returns I can sustain for the longest period of time?” @morganhousel

Small changes in one direction make a huge difference over a long period of time. This concept not only applies to our finances, but also to our organizations, relationships, and personal abilities.

5. Luck is very important I agree that hard work is the key to success. But you cannot dismiss luck. You need to generate luck as a discipline in your life. You need to put in so much effort every day, that you increase the odds of you getting lucky.

Let's say you write 100 cold emails per day, asking for an internship. Now let's assume, that you get 5 replies out of 100. So every day, you're increasing your odds of luck working in your favor. Because one day there will be a reply which will change your life.

6. Nothing’s Free Everything has a price, but not all prices appear on labels. Either you pay the price by spending money or by spending your time. And you will feel bad for the one, which is less valuable to you.

7. Live below your means This is a lesson that every 20-something needs to learn. No one expects you to be rich in your 20s & yet you show off the most in your 20s, as you think that's how you earn respect. But that's not true.

If you're able to live with less than you earn, you'll be able to make a lot more of your life. But that does not mean, you're chasing the future happiness illusion. You have to live in the moment happily, but you continue to do that, living below your means.

8. Room for error The most important part of life is to plan for this one question - "What will you do if things do not work out as you thought?" Always have a buffer. Or be prepared for the worst case scenario.

9. Save as much as you can Most of us think that saving is income minus expenses. But that's wrong. Saving = Needs minus Ego. Confused? Let me explain.

Your needs are - rent, groceries, electricity, and every other day-to-day bill. And then there is your ego - the new iPhone that you want, a Starbucks coffee you have every day to look cool, etc.

So when you take out your ego expenses from what you're left with after your needs, that's saving. The more you can do it, the more it will be beneficial for you.

10. Money is not important if you can't sleep at night What's even the point of having crores in your bank, if you are not able to sleep? Or what's even the point of investing in risky instruments, that do not let you sleep? No amount of money is worth more than your sleep.

I love this book so much that I would love more of you to read it as well. Like & Retweet the first tweet below and I will select 10 people randomly and gift them this book. For those who wish to buy it: Follow me @warikoo for more.

Wonderful summary by @SachinRamje

Here is a chat I had with @morganhousel around money and of course the book

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