The World's Best Book Summaries
What’s the quickest way to become wealthy? How can you create passive income? MJ DeMarco, multimillionaire entrepreneur and investor, argues that the traditional path to wealth—working for a salary and investing in stocks—is too slow and unreliable. Instead, he says that the fastest way to become wealthy is to create passive income and increase your net worth. Here’s how to become wealthy by leveraging time.
What is the endowment effect? Why does it occur? The endowment effect is the tendency to assign a higher value to an item because it belongs to you. The endowment effect stems from loss aversion. Once something is in your possession, you fear losing it, which makes you value the item more. Keep reading to learn about the psychology behind the endowment effect.
What is self-selection bias? How does self-selection bias influence research findings? Sample selection bias is a common issue in psychological studies that involve statistical analysis. Specifically, people only join studies they’re comfortable responding to, which alters your data. Those who might provide embarrassing or somehow “undesirable” responses simply won’t take part, narrowing your study’s scope and skewing the results. Here’s how sample selection bias skews research results and how to work around it.
Why is group membership so important? Where does the human need to belong stem from? One of the evolutionary traits that most influences you is the desire to be in a group. For early humans, group membership was necessary for survival. Those who left the group died, while those who stuck to the status quo survived and reproduced. Thus, your brain is genetically wired to fit in. Although the human need to belong has evolutionary value, it causes some fallacies in the way we interpret other people’s behavior. Let’s explore some fallacies resulting from our need to belong.
What is Rolf Dobelli’s The Art of Thinking Clearly about? What is the key message to take away from the book? In The Art of Thinking Clearly, Rolf Dobelli breaks down the most common logical fallacies that plague humanity. Logical fallacies affect everyone, are extremely difficult to avoid, and can hinder our decision-making ability. Dobelli encourages readers to improve their decisions by learning how to recognize these fallacies and how to work around them. Here’s our review of The Art of Thinking Clearly by Rolf Dobelli.
How do you tell if someone is trying to emotionally manipulate you? What are the signs of emotional manipulation you should watch out for? In his book Games People Play, psychiatrist Eric Berne explains how to identify when a mind game is being played on you. He provides three steps for spotting mind games and discusses how you can break that game. Here’s how to identify emotional manipulation, according to Berne.
Do you want to know how to increase your income? What kinds of businesses will make you rich? In his book, The Millionaire Fastlane, entrepreneur and millionaire MJ DeMarco says that the fastest way to become rich is by creating a business that generates passive income—and then compounding that income. However, not all businesses will make you rich. Here are DeMarco’s seven methods for dramatically increasing your income.
Have your life goals changed over the years? Do you have the same goals you did 10 or 20 years ago? A fact of life is that goals change over time. However, people often deny this fact and try to plan for the future as if nothing will change. That’s why Morgan Housel, the author of The Psychology of Money, says that you should make a financial plan that is flexible. Here’s why you should have finances that can change with your life.
What is the contrast effect? Why do people fall for the contrast effect? The contrast effect is a cognitive heuristic: It helps you make judgments faster while expending less energy. Your brain lessens energy usage whenever possible, and the contrast effect helps it conserve cognitive resources. Learn about the psychology of the contrast effect.
What is exponential growth? What are some real-world examples of exponential growth? Exponential growth is a complex math concept that many people don’t instinctively understand. Yet, the idea is pretty simple: Exponential growth simply means that a number doubles at regular intervals. Let’s take a closer look at the meaning of exponential growth and a few examples.