Sublime

According to psychologist Brad Klontz, a pioneer in the field of financial therapy, most of us operate according to one of four key ‘money scripts’: money avoidance,

People with enduring personal finance success—not necessarily those with high incomes—tend to have a propensity to not give a damn what others think about them.

I believe, is that we think about and are taught about money in ways that are too much like physics (with rules and laws) and not enough like psychology (with emotions and nuance).

In 2018, I wrote a report outlining 20 of the most important flaws, biases, and causes of bad behavior I’ve seen affect people when dealing with money. It was called The Psychology of Money, and over one million people have read it. This book is a deeper dive into the topic. Some short passages from the report appear unaltered in this book.

Researchers at Princeton found financial woes dominate our mental bandwidth, crowding out other thoughts and leaving less room for solving important problems. The net effect is that people in financial trouble temporarily lose the equivalent of 13 IQ points, which is huge—like losing an entire night of sleep.