Ch-3 Never Enough | The Psychology of Money by Morgan Housel #thepsychologyofmoney

Hey RRs, I am Preeti Saraf and today I will discuss the 3rd chapter, ‘Never Enough' of the book ‘The Psychology of Money’ by Morgan Housel.

Morgan in this chapter shares about people like Rajat Gupta and Bernie Madoff, people who had everything, unimaginable wealth, prestige, power, and freedom and yet they threw it all because they wanted more.
They brought ruin upon themselves because they were greedy and didn’t know when to stop.

To make money they didn’t have and didn’t need, they risked what they did have and did need. And that’s foolish. It is just plain foolish. If you risk something that is important to you for something that is unimportant to you, is just does not make any sense.

Through his experiences, Housel draws out few points to remember if you reach a certain level of financial success:

1. The hardest financial skill is getting the goalpost to stop moving.
If your expectations rise in tandem with your performance, there’s no point of pushing more because you’ll feel the same even after putting in more effort. Without a sense of sufficiency, life isn’t much pleasure.

As the saying goes, happiness is defined as “results minus expectations”.

2. Social comparison is the major issue.
The ceiling of social comparison is so high that virtually no one will ever hit it. This means that it’s a battle that can never be won, or that the only way to win is to not fight to begin with—to accept that you might have enough, even if it’s less than those around you.

3. “Enough” is not too little.
Enough doesn’t mean that you have to go without. Enough implies that you are aware of when you should refrain from doing something you will come to regret.
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4. Many things are invaluable and not worth the risk, regardless of the gains. Those are reputation, freedom, friends and family, love, and happiness.
And your best shot at keeping these things is to know when it’s time to stop taking risks that might harm them. Knowing when you’ve had enough is crucial.

The good news is that the most powerful tool for building enough is remarkably simple, and doesn’t require taking risks that could damage any of these things which we are going to talk about in the next chapter.

Key takeaways from the chapter are:
1. If you risk something that is important to you for something that is unimportant to you, it just does not make any sense.
2. The hardest financial skill is getting the goalpost to stop moving.
3. Social comparison is the major issue.
4. “Enough” is not too little.
5. Things like reputation, family, happiness etc. are never worth risking, no matter the potential gain.
6. Knowing when you’ve had enough is crucial.

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