Lessons Learned From Studying Money for 10 Years

Master money, and you’ll be able to do more work you enjoy and less work of the bill-paying variety. I started learning about money more than 10 years ago because I didn’t understand it and kept losing and trying to play catch up in the game of money. The process of learning about money started with reading the following books:

Lessons Learned From Studying Money for 10 Years
  • One Up on Wall Street
  • Beating the Street
  • Rich Dad Poor Dad
  • Money Master the Game
  • I Will Teach You to Be Rich
  • Think and Grow Rich

Completing high school and studying sound engineering taught me nothing about money. My parents didn’t teach me good money habits either. I learned the hard way and it’s my goal to ensure you don’t have to (seek your own financial advice obviously). In 2011, my study of money led me to 

Here are the simple lessons I’ve learned from studying money for 10 years.

Understanding money is mastering psychology

Studying money has nothing to do with being rich and famous. As soon as I understood money, it became obvious it was all about psychology.

Stock markets trade on sentiment. Humans buy assets and sell them too. You’ll be terrible with money if you don’t understand your own psychology. My psychology works best when I aim for the long term and take away most of the decision-making ability.

I quickly realized when I began trading, that my short-term results were entirely driven by temptation and shiny object syndrome.

Learn about psychology and you can master your mind when it comes to money and the right strategy for you.

You can give all your money away and use it for good

Money is pointless if it’s not put towards something good.

The people who have the most money — like Warren Buffett and Bill Gates —  They understand that leaving money to their family is a burden if they weren’t the ones who earnt it.

Give your money away. Help those who are in dire situations. Objects bought with money don’t make you feel good: people do.

You will be tempted by bad investments

It doesn’t matter how smart you are. You will make bad investment decisions.

You’ll buy a company that turns to dust and had no signs of going south (like WeWork). You’ll get into high-risk investments when the returns are low, like Startups, and think you can spot winners. The philosophy of 500 Startups, an investment fund, is based on the idea that you can’t pick winners.

The companies that should make money don’t. And the companies run by pot-smoking millennial’s who lied about their Harvard Education can go on to make millions. The facts, when it comes to investing, are easily distorted and unrelated to investment returns.

You know nothing; therefore, you have a chance when you act on that idea.

The news and Youtube give terrible financial advice

The media industry gives terrible financial advice. They chase headlines that lead to views, not information that will help you make money.

Who you are before money, matters

If you’re an asshole before you have money, that won’t change when you have money. Money amplifies who you are. If you won’t give a dollar when you have fifty, you definitely won’t give a dollar when you have millions.

Start early by giving a portion of your money away, therefore, telling your mind that you have enough and you are enough.

Money can devalue

This is a huge lesson: money can be printed out of thin air. Inflation can eat away at your savings. Look at the value of the USD over the last few decades on Google. You’ll be somewhat surprised.

You protect against money devaluing by investing in assets that retain their value over time: gold, stocks, property.

Be fearful when others are greedy and greedy when others are fearful

This one is a quote from Warren Buffett.

Right now, everybody is being greedy and we’re at the end of a very long bull market. It’s nothing to be scared of. Don’t sell up everything. Just understand that investing money is based on cycles.

If everything is going up and the value is not there, be slightly more fearful and adjust the way you invest accordingly. Here’s how it works in simple terms:

When the market is going up like mad, sit in cash or liquid assets that can be easily sold if required.

When the market goes down by 30% or 40% and fear is everywhere, it’s time to get a discount. You deserve it.

Money is best put to work

When you have money there are two options: invest or save.

Investing is putting your money to work. Put your money to work in the following ways:

  • Invest in yourself by learning new skills that generate money
  • Invest in businesses through a stock market index fund
  • Invest in books about finance so you understand money
  • Invest in humanity by giving a little to worthy causes

Money can blow up your ego

There are a lot of douche bags with money. Money can cause your ego to blow up and make you think everything you touch turns to gold. I was that dude in my 20s so that’s how I know. Watch your ego as you make money. Here’s how to audit your ego:

Do you think too highly of yourself?
Do you talk down to people because of your money?
Is your confidence slightly too high?
Do you preach or teach?
Do you use money to buy material possessions that prove you have money?

An out of control ego is the default outcome of having money. If you do nothing, your ego will get big and that won’t be good for you.

How you treat others is how people treat you.

You’ll feel better about life when you attract good people into your life, not repel them with your money and end up a lonely old man/woman.

Money can be lost

Money is a fantastic teacher. You learn the best lessons when you lose money  thanks to a car.

You can make a million-dollars, but you can also lose it too. And faster than you think.

You can make money from your art

I have been told my entire life that writers can’t make money from their art.

When I joined the blogging world in 2014, everybody told me it was a noisy corner of the internet and the money I’d get from ads (the main source of income at the time) scattered through my writing wouldn’t even be enough to buy one latte a day. I didn’t listen and proved them wrong 

I don’t tell you that to be a smart ass. I tell you because when you put your heart and soul into an art form and commit for long enough (five years is a good amount of time), you can do anything.

The way you make money online doesn’t matter and it’s forever changing. When you release enough work online and commit for long enough, opportunities to make money will find their way to your inbox and surprise you. You can make money from your art.

You can make money while you sleep

It sounds like a fantasy. It’s not.

Set up systems and you can make money while you sleep. A business is a system; a blog is a system; a social media channel, like LinkedIn, is a system; an investment in the stock market is a system. Systems make you income and automate money creation.

You can never have enough money

The ultimate lie, when it comes to money, is that you’ll one day have enough — you won’t.

No amount of money is ever enough until you make one decision: you decide you are enough. When you are enough, your desire to have more money and endlessly work for money disappears.

Money is a reflection of value and when you value yourself, your view about money changes. That’s the biggest lesson learning about money has taught me. Money is just an extension of yourself.


By: Tim Denning
Source: Medium.com

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