Book review- The Laws of Wealth by Daniel Crosby

The pathways to knowledge are always through the books we become acquainted with and take us on a journey to the ideas we already know. In the process, we learn something new, a sense of satisfaction. After reading the book Morgan Housel’s, “The Psychology of Money”, a suggested read was the book Daniel Crosby’s “The Laws of Wealth”. Delving into further understanding from Housel’s perspective, I gave my shot at reading the book. It is far more insightful and practical for people who earn their livelihood and want to be sure their investments earn significantly- keeping their future safe and secure.

In deep dive…

The book has lucid language, making it easier to understand the simple laws of investments and the patterns of behaviours that people have taken making errors in judgment in terms of investment choices. In simple terms, Crosby has brought in a simple rule book- in his words -RBI-rule-based behavioural investment, in 4Cs. To name them- Clarity, Conviction, Consistency and Courageousness. Most of these can be synonymous with our need to stay sharp as an individual- in this case, more in line to be a good investor. The key here is to show future investors and people on the investing spree a new perspective. The author here helps convey the important idea of going by the facts while making an investment plan, and not taking a path of fright mode thinking of the possibilities of things going sideways. Highlight here is the use of a contrarian viewpoint, basically to “think with our brains “and not with our ‘hearts’. It will help in boosting one’s confidence in making good investment plans. This inline goes in making continuous and consistent efforts to make our decisions and help our investments more fruitful.

With the use of behavioural psychology and insights Crosby, has helped in giving simple yet effective rules to invest. A simple breakdown of ways to invest, in simple language- a must-read book for all readers out there. Despite the fact that there may be a hundred podcasts and videos of investing mindfully- this book is one of the best books I came across, for helping me understand the nuances and steps to take for effective investments.

Final Thoughts….

I would recommend the book- for its simple use of language, and strong framework in understanding how one should go about investing. One cannot get away from the fact that we have multiple confusions in terms of our investment plans when we start out earning after our studies. The highlights of the mistakes we make and end up paying a price for it, are an interesting read and more thought-provoking. This book is more of an unusual approach to behavioural finance, and helps in disproving the “modern portfolio theories”.

Overall, this book is an amazing read and recommended to those who are new to investment plans and who are already into investing for their own/family’s future to pick up a copy and be enriched by what it has to offer.