The psychology of wealth and happiness, 30 zero-effort ways to fill your life with joy
3 new ideas on smarter living
Hello everyone,
Postanly Weekly is a reader-supported smarter living newsletter. To maximise impact, all issues in the future will be FREE. To support my work, you can upgrade to a paid subscription for $6 per month or $40 for an entire year. Bonus courses for supporters: an invite to Thinking Toolbox (mental models for life) and Mental Wealth Toolbox (practical concepts for smarter decisions).
The psychology of wealth and happiness
Poverty is not an option. Wealth isn’t the key to happiness. More money doesn’t equal more happiness. So what exactly makes life worth living?
How happy are those who have more money than others? And how happy are those who have less money than others?
Most of us know that money isn’t the key to happiness.
But how do you reach true happiness? How do you build just enough wealth to stay happy? These are two of the most common questions that people ask.
But they are two different things.
Money can help you enjoy a more luxurious lifestyle. But it’s not the same as happiness. It’s not the same as being truly fulfilled.
Wealth has a lot to do with our social connections, sense of meaning and purpose, and opportunities to grow as human beings but it’s not enough for a meaningful, fulfilling, and happy life.
You can be wealthy and happy at the same time, but that requires a healthy dose of wisdom to understand the many factors that make life worth living outside of wealth.
If you want to be happy, wealthy, and fulfilled in life, you need to understand and follow the basic principles of positive psychology — not just the principles of economics.
In his book, Principles: Life and Work, Ray Dalio, an American billionaire investor, and hedge fund manager, shares his philosophy for investing, life lessons, thoughts on meaningful work, and principles for achieving wealth and happiness.
“It’s senseless to have making money as your goal as money has no intrinsicvalue — its value comes from what it can buy, and it can’t buy everything. It’s smarter to start with what you really want, which are your real goals, and then work back to what you need to attain them,” he writes.
You already know that money doesn’t buy happiness, but most of us don’t automatically behave in ways that make us happy.
The general rule of thumb is that if you want to be happy and wealthy, you need to do the opposite of what makes you unhappy and poor. To build a meaningful and happy life, you can start from what makes you miserable and work your way up. Get to the bottom of your misery and do more of what brings out the best in you.
Spend more time with the people who make you come alive. Pursue things you deeply care about: work or projects that guarantee flow (“a mental state in which a person performing some activity is fully immersed in a feeling of energized focus, full involvement, and enjoyment in the process of the activity”).
Adam Smith, considered the father of modern economics and famous for his 1776 book, “The Wealth of Nations, ” observed that the source of misery is the overestimation of desirable permanent states. “The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another, ” he said.
“The more money you have, the happier you’ll be” is flawed logic.
It’s also incredibly naive. Wealthy people, in particular, tend to be very focused on their possessions, which means they often have a very skewed view of the world.
They can’t say their wealth entirely makes them happy. Many wealthy people are miserable. So how does having a lot of money affect your outlook on the world? Who are the happiest people in the world?
How much of an impact does money have on our happiness?
Studies have shown that having more money doesn’t necessarily make us happier. Some research suggests that having a large amount of money can make us less happy.
There is a fine line between having money and being wealthy, as having too much can sometimes cause financial stress and make you focus on acquiring more instead of enjoying what you already have.
“Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life,” says Adam Smith.
How much money do you need to be happy?
The answer to this question depends on whom you ask.
Thoughts on the relationship between wealth and happiness vary from person to person, depending on their expectations, needs, and desires.
“Having the basics — a good bed to sleep in, good relationships, good food, and good sex — is most important, and those things don’t get much better when you have a lot of money or much worse when you have less. And the people one meets at the top aren’t necessarily more special than those one meets at the bottom or in between,” writes Dalio in Principles.
If you ask financial advisors, the consensus is that you need at least six-figure savings to be happy. If you ask researchers from Princeton University who studied the impact of income on happiness, they will tell you that you need to earn at least $75,000 a year to be happy.
If you ask the average person in the street, the consensus is that you need to have a house, a car, and a reliable phone signal to be happy.
The consensus is that you need to have friends and family who love you and value your company to be happy.
You also need to have a passion for your work to be happy — if you don’t find fulfilment at work, find something outside work that fills the happiness gap (a creative project or activity you enjoy or that relaxes you can help you find flow or creative pleasure).
So, where does this leave us?
The pursuit of meaningful work, happiness, and wealth is deeply personal. What makes you happy may not guarantee life satisfaction for another.
Some people value family, others friends, and others work. Some prioritize their faith, others their hobbies, and others their personal development.
For many, money is an essential aspect of their lives? Money is an important part of everyone’s life, whether you are wealthy or poor. But it’s not the end goal. It’s a means to an end that’s not even guaranteed.
You don’t need to earn six figures to be happy, but you need a decent income. What’s “decent” is up to you. It depends on your needs, not wants.
Happiness is within everyone’s grasp: if only we can get back to basics and focus on our real and practical values and goals.
“Remember that most people are happiest when they are improving and doing the things that suit them naturally and help them advance,” says Dalio.
We frequently worry about where our next paycheck is going to come from. However, for many people, finances aren’t the top priority in their lives. That doesn’t mean that you can’t work hard and have a happy life.
It’s just the opposite. If you have a positive outlook on life, you can make friends and find happiness in even difficult situations.
Happiness doesn’t mean that you are a ray of sunshine, but you can be content with your life if you don’t compare yourself to others.
You can be happy if you can accept your current situation and not dwell on what you don’t have. “The real tragedy of the poor is the poverty of their aspirations,” Adam Smith said.
What are your present and future expectations, goals, objectives, and desires? Are they realistic? Are they based on your core values?
“All money is a matter of belief,” says Adam Smith.
Whatever you do, don’t pursue wealth for its own sake
Your happiness doesn’t depend solely on how much you accumulate. It helps but to a certain extent.
“So does money make us happier? Well, yes and no. We need enough to cover our basic needs, and a rising salary can impact our wellbeing, but we also need to remember the positive effects of generosity and building relationships,” writes Rin Hamburgh of The Guardian.
Find your income bar and commit to other things, activities, and experiences that bring out the best in you. And finally, here’s piece of advice from Ray Dalio to ponder: “Remember that the only purpose of money is to get you what you want, so think hard about what you value and put it above money.”
Food for thought
The vorfreude secret: 30 zero-effort ways to fill your life with joy [The Guardian]
“Looking forward to something can trigger joy in the present moment,” says Karen Neil, a health coach and the founder of Mindful Medicine. This can boost your mood, reduce your stress levels and help to avoid burnout. A 2017 study published in Frontiers of Psychology found that anticipating positive events activated the brain’s medial prefrontal cortex, which is associated with a higher level of wellbeing.”
Good Enough [ The Baffler]
“We need to remember,” Phillips concludes, “that giving up is a way of giving. And to wonder exactly what has been given up, to whom, and for what.” What might be important is knowing, or at least hoping, that the gift of giving up will arrive at its destination. As Winnicott said, “It is joy to be hidden, but disaster not to be found.”
How to use ‘possibility thinking’ [Psyche]
“An important note before we start: to engage in possibility thinking requires you to stay open to a wide range of options. That means not rejecting ideas even if they seem strange at first. But it also means not embracing a solution before the end of the process. Focusing too much on one outcome can result in tunnel vision – the opposite of possibility thinking. So try to keep an open mind until you reach the end of the process.”
Sometimes kids need a push. Here’s how to do it kindly. [Vox]
As they succeed at their task, give them space. You can prep dinner on one side of the kitchen while they tear lettuce for a salad on the other. Supervision is okay, but don’t overwhelm them with directions. In an interview with Vox, Lahey compared this method to teaching a kid to ride a bike. “First, you start with the training wheels all the way against the ground so that the kid can be like, ‘Oh, okay, I can do this.’” Then, you raise the wheels, little by little, until they’re cruising on their own.
3 ideas on smarter living
A piece of advice worth passing on
I don’t remember where I saw it, but I’ve been repeating to myself: ‘Any pace is a good pace.’ When there's an infinite amount of work – the feelings of urgency can amplify the feeling of always being behind. I’m working on letting go of that thought and any urge to rush, and this advice reminds me I’m right on time.
A quote worth repeating
Painter and art theorist Wassily Kandinsky said, “Everything starts from a dot.” I certainly take it out of context, but I couldn’t agree more with its sentiment: I’m a firm believer that if you want to connect the dots in magical, meaningful ways, it all starts with collecting a whole lot of dots.
A book worth reading
The Infinite Game by Simon Sinek takes the traditional (capitalist) approach to organisations and turns it on its head. He defines the idea of infinite games – in which players come and go, the rules are changeable, and there is no defined endpoint – and elaborates what it can mean to lead and build organisations from this different vantage point, focused not on winning but on creating value towards a greater purpose or cause.
Tools for life/career
Meco — Read all your awesome newsletters on a single app. Meco is a distraction-free space for reading and discovering newsletters, separate from the inbox. Add your newsletters in seconds and liberate your inbox. Move your newsletters to a space built for reading and declutter your inbox in seconds. Enjoy newsletters in a space designed for reading. Learn More
Morning Brew covers the latest news across business, finance, and tech in the most digestible way to save you time. The day's most important stories into a short, quick, and entertaining read. It’s read by over 4 million professionals. I read it every day. Try it, it’s free.
Masterworks — The first AI-powered startup unlocking the “billionaire economy” for your benefit. Masterworks’ unique investment platform enables savvy investors to invest in blue-chip art for a fraction of the cost. The best part? Everyday people are already benefiting. So far, it's been right on the money. Every one of their 16 exits has been profitable, with recent exits delivering +17.8%, +21.5%, and +35.0% net annualized returns. Intrigued? Postanly readers can skip the waitlist with this exclusive referral link. Skip the waitlist
Work with Postanly. Partner with us here.
Thanks for reading!
Until next week,
Thomas
Medium | Thinking Toolbox | The Write Life | How to Live: Lessons in Stoicism
Postanly Weekly is now a reader-supported publication. To support my work, you can upgrade to a paid subscription for $6 per month or $40 for an entire year. Bonus courses for supporters: an invite to Thinking Toolbox (mental models for life) and Mental Wealth Toolbox (practical concepts for smarter decisions).