I’ve only ever read 2 finance books: Dave Ramsey’s Total Money Makeover and Robert Kiyasaki’s Rich Dad Poor Dad. So I’m not sure what I can bring to the discussion when it comes to reviewing my third finance book: The Psychology of Money by Morgan Housel. I am a Dave Ramsey acolyte. He got me out of a rough period post college (read: student loans). I believe it’s not just fiscally responsible to live debt free, it’s almost a moral obligation as well. In the same way you should return a shopping cart, you shouldn’t have consumer debt.

In The Psychology Of Money, Housel’s general point he wants to get across is that money is less about what you know, and more about how you act. Each chapter is told through a series of short stories that illustrate not the math, but the behavior of the topic. Most of the topics Housel covers falls in line with the general financial consensus as I understand it. Save money, live within your means, debt is generally bad, time is your biggest wealth building tool when investing. If you spend any amount of time in the personal finance space you’ll hear these ideas. For example people who save money, by definition, have a lifestyle that fits below their means. This allows a level of risk tolerance for when shit happens, as it inevitably will.

What made this book really enjoyable to me was the handful of new ideas that I had never heard of.

One that stood out to me was the concept of “tails.” That most people who get rich do so on only one or two big successes. Most ventures don’t pan out. That makes sense to me. Lately, I’ve been thinking about this concept I saw online. Entrepreneurs from the middle class get to try once or twice before they run out of funds starting businesses. Occasionally an Average Joe strikes it big and the American Dream continues. But the vast majority of times it doesn’t work out. Most startups fail. But the math changes if you’re wealthy. If you’ve got the funds, you can try again and again, continuously until you hit the right “tail.”