Summary of The Wisdom of Finance

Looking for the book?
We have the summary! Get the key insights in just 10 minutes.

The Wisdom of Finance book summary

Editorial Rating



  • Applicable
  • Eye Opening
  • Engaging


Finance keeps the wheels of the economy turning, but it gets a bad rap in the popular imagination. The 2008 crisis only magnified that perception. But finance is a double-edged sword in professor Mihir A. Desai’s nuanced perspective of the field’s socially useful functions. He illustrates the concepts of finance and applies them to everyday situations, drawing on literary and historical examples as well as his own experiences, to show how people can use financial tenets to improve their lives. In this sweeping and thought-provoking look at money and human endeavor, he invites readers to open their minds and draw new insights from “the wisdom of finance.”

About the Author

Mihir A. Desai is a political economist and professor at Harvard Business School and Harvard Law School.


Finance is rooted in human nature, and it facilitates life for people in all segments of society.

In spite of all the ways in which people apply its basic principles to their daily lives, the subject of finance draws consistently negative reactions around the world. Stories abound in literature and the arts about short-sighted, callous and grasping characters in the financial world. For instance, Leo Tolstoy’s tale about Pakhom the peasant’s effective use of financing to secure real estate and enrich himself shows how greed – goaded by the devil – made Pakhom’s desire for even more land the cause of his death. The infamous banker Gordon Gekko in the film Wall Street is also cast as a modern-day villain, extolling the virtues of avarice. 

But rather than being evil, finance is in fact rooted in human nature, and it facilitates life for individuals across all segments of society. Finance provides a way for people to deal with a risk-filled environment, especially when they face choices requiring trade-offs between enjoyments today and gains in the future. The modern topics of asset pricing, risk management, options, diversification, ...

Comment on this summary

More on this topic

One Hour Investor
Getting Back to Business
Too Smart for Our Own Good
Financial Freedom
The Index Card
Between Debt and the Devil

Related Channels