It's that time of the year when we all make a variety of resolutions. If you intend to get serious about investing money in 2021, Morgan Housel's highly acclaimed book the Psychology of Money is an excellent starting point. In 20 short and crisp chapters, the author left me reconsidering my financial choices and priorities.

The quick read covers important issues around money, ranging from reasons for bubbles, the role of risk and luck to the author's investment strategies. The storytelling and examples the author shares makes the book unputdownable.

Five of my favourite lessons from the book are:

1. No one's crazy. Quoting an impressive paragraph from the book. People from different generations, raised by different parents who earned different incomes and held different values, in different parts of the world, born into different economies, experiencing different job markets with different incentives and different degrees of luck, learn very different lessons. No one is crazy; everyone invests money basis their life experiences. A corollary of the same — the right investment for someone else is not necessarily suitable for you. Take the buy/sell advise by experts with a grain of salt.
2. Luck and risk are doppelgangers. A lot of success and failures in life are courtesy luck and the role of chance. It isn't straightforward to estimate the proportion of luck and skill that leads to success. Not all success is due to hard work, and not all poverty is due to laziness.
3. One must aim for getting the goalpost of lifestyle desires to stop moving. The savings generated by personal frugality and living below your means can equip you to handle the curveballs life throws.
4. Compounding is powerful — the first rule of compounding: Never interrupt it unnecessarily (Charlie Munger).
5. The most significant value of money is control over one's time. The ability to do what you want, when you want, with who you want, for as long as you want, is priceless. It is the highest dividend money pays.

Morgan Housel is a former columnist at the Wall Street Journal and Motley Fool. He is a partner at the Collaborative fund — the idea of the book germinated from a wildly popular blog article by Morgan. (Link: author.https://www.collaborativefund.com/blog/the-psychology-of-money/)

If you are interested in making better financial choices in 2021, the Psychology of Money is a must-read. If you happen to read the book, do share your ideas, comments and feedback. I would love to hear your takeaways.