The Greatest Show on Earth

At the beginning of this chapter, the book tells a story. There was a clever man who owned some key components in WiFi routers. He made a lot of money from these components. But even though he was so clever, he had a poor relationship with money. He didn’t know how to manage money properly. He only knew how to waste it. And you know what? He went broke years later.

The premise of this book is that doing well with money has little to do with how smart you are and a lot to do with how you behave. And behavior is hard to teach, even to really smart people.

Losing control of emotions can be disastrous for financial success. Ordinary folks with no financial education can become wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence.

Next, this chapter tells a story about Ronald Read. He was just a humble rural janitor. But when he died in 2014, he had more than $8 million. Why?

There’s no secret under the sun. The secret is saving and investing. That’s it—from janitor to philanthropist.

The other story this chapter tells is about Richard Fuscone, who had a Harvard education and was very successful in business. However, he carried high debt. When the financial crisis hit, he went bankrupt. This was all because he bought many luxury items, such as luxury cars and a big house.

What these two stories tell us is not only to be more like Ronald and less like Richard, but more importantly, the fascinating thing about these two stories is how unique they are in the world of finance.

Then, this chapter raises an important point: financial success is a soft skill, where how you behave is more important than what you know. The author calls this the psychology of money.

Finance is different. It’s guided by people’s behaviors. And how I behave might make sense to me but look crazy to you.