From the shelf · 102 money books
Does The Psychology of Money hold up?
The Psychology of Money by Morgan Housel is one of the 102 money books on The Money Shelf. The shelf links it to 2 of the 22 claims that the book tests against official records from the United States, the United Kingdom and Australia. Each verdict below comes from that test.
Claim 1 · The book makes this claimCompound interest: start early
HoldsIn every case above the 40-year saver ends with more than the 30-year saver for the same monthly sum, by a factor that depends only on the return and the number of years, and the first ten years of deposits supply 41 to 54 per cent of the final balance.
Read the full test →Claim 13 · The book argues against this claimMarket timing: time the market and cut losses early
Not establishedThe Schwab arithmetic shows that perfect timing finished $15,522 ahead of investing immediately (9.1 per cent more) and that bad timing still beat cash, but the study assumes foresight.
Read the full test →The Psychology of Money raised the question. The records take it further: every figure dated, every source named, and the arithmetic worked through for three countries.
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