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How To Live A Happy and Contented Life, Why Wealth Is Nothing To Do With Money & Why Hacks Don’t Work with Morgan Housel #430

Feb 28, 2024 1h 10m 37 insights
When John D Rockefeller was asked how much money was enough, he famously replied, “Just a little bit more.” This quote is often used to illustrate our hard-to-shake view that money will solve all life’s problems. But as today’s guest is keen to point out, it probably won’t. Because life’s true riches don’t have a £-sign in front of them.   Today’s guest is the multi award-winning financial writer and bestselling author Morgan Housel. Morgan is a partner at The Collaborative Fund and a former columnist at The Wall Street Journal.   In his first book, The Psychology of Money, Morgan explains how doing well with finance is less about what you know and more about how you behave. This is an idea that I believe applies equally to health. That book became a global sensation and to date has sold over 4 million copies. And his second book, Same as Ever:Timeless Lessons on Risk, Opportunity and Living a Good Life has just come out.   Morgan explains that in finance, as in health, we generally don’t want to put in the hard work over the long term. We want shortcuts, secret hacks, silver bullets. Yet, he says, basic truths and principles remain the same as ever.   We also talk about the relationship between money and happiness, the relationship between our finances and our health, the real meaning of wealth and the importance of having a sense of control.   We discuss the problems with black and white thinking, the dangers of social comparison, the difference between success and happiness, and why we need to be careful about who we look up to.   At its core, this is a conversation about what it really means to live a happy and contented life.   There’s a quote from Lao Tzu, that I really like: “He who knows he has enough is rich.” It’s such simple yet profound advice. And it chimes with Morgan’s ultimate message, that whatever your current financial situation, what’s going to make you happy is probably not what you think.   This is a thought provoking conversation that I’m pretty sure will have you thinking deeply about your life. Support the podcast and enjoy Ad-Free episodes. Try FREE for 7 days on Apple Podcasts https://apple.co/feelbetterlivemore. For other podcast platforms go to https://fblm.supercast.com. Find out more about my NEW Journal here https://drchatterjee.com/journal Thanks to our
Actionable Insights

1. Prioritize Relationships & Forgiveness

Focus your life’s efforts on spending more time with your children, being kinder to others, and practicing forgiveness, as these are universal regrets of the elderly, not earning more money or working harder.

2. Prioritize Behavior Over Knowledge

Recognize that success in finance and health is primarily driven by consistent positive behaviors, not merely by what you know; therefore, focus on implementing good habits.

3. Master Health Fundamentals

Achieve 80-90% of your health goals by consistently practicing basic habits: don’t eat too much sugar, eat mostly real foods, walk for 45 minutes a day, and sleep seven to eight hours a night.

4. Invest in Quality Relationships

Prioritize and actively invest in cultivating good quality relationships, as they are one of the best predictors not only of happiness but also of your longevity and overall health.

5. Define Your Legacy (Reverse Obituary)

Engage in the ‘reverse obituary’ exercise: imagine you are on your deathbed and reflect on what you would want your obituary to say (e.g., good father, good spouse, helped community) to clarify your life’s true priorities and guide your efforts.

6. Implement Happiness Habits

Based on your defined legacy, identify and commit to three specific ‘happiness habits’ each week (e.g., undistracted family meals, pursuing passions) to ensure your daily actions align with your long-term vision for a happy life.

7. Focus on Intrinsic Well-being

Prioritize intrinsic sources of contentment and happiness in your life, including health, family, regular exercise, adequate sleep, and mental clarity, over the pursuit of material goods.

8. Cultivate Control & Hope

Prioritize gaining a sense of control and hope about your future, as these psychological traits are fundamental to lifetime well-being and people are willing to do nearly anything to achieve them.

9. Practice Radical Empathy

Reduce judgment of others by deeply understanding their psychology, childhood, and experiences, recognizing that if you were in their exact situation, you would likely behave in the same manner.

10. Stick to the Basics

Avoid the temptation to neglect fundamental, proven strategies in favor of shortcuts, secret hacks, or silver bullets, as these often lead to poorer outcomes in the long run.

11. Invest for the Long Term

Build wealth by consistently investing (dollar-cost averaging) into basic index funds and holding them for a long duration, such as 30 years, rather than seeking quick financial hacks.

12. Financial Independence is a Spectrum

Recognize that financial independence is not binary but a spectrum, where every dollar saved provides a slice of future ownership and a nugget of independence, allowing for more choices and flexibility.

13. Value Small Savings

Understand that saving even small amounts of money, like a few thousand dollars, makes a significant difference by providing a crucial sense of independence and flexibility, such as the ability to seek a better job.

14. Personalize Financial Decisions

Take an individual approach to your finances by introspectively determining what is truly best for your family and what will make you happy, as there is no universal financial formula.

15. Set Incremental Goals

Avoid disillusionment by setting realistic, incremental goals that are just ‘one notch higher’ than your current state, as achieving these smaller milestones provides momentum and motivation.

16. Choose Realistic Role Models

Be careful about who you choose as role models; if you are of lower financial means, select someone who is just one notch higher than you to maintain motivation and achieve attainable goals.

17. Break Tasks into Small Steps

Break down your goals and tasks into smaller, achievable steps, similar to short book chapters, to foster a sense of accomplishment and maintain momentum as you progress.

18. Re-evaluate Admiration Criteria

Be careful who you admire; prioritize qualities like happy marriages and good parenting over career success or income, as these ‘unseen’ aspects are what truly make the biggest difference in a person’s life.

19. Wealth Isn’t a Problem Solver

Understand that being rich and famous is not the solution to personal problems or a guarantee of happiness, encouraging a focus on internal well-being rather than external achievements.

20. Family is Key to Happiness

To achieve happiness in life, focus your efforts and attention on your family and loved ones, as these relationships are the true source of contentment, not career success or making more money.

21. Prioritize Health for Happiness

Focus on fundamental health practices such as sleeping well, eating better, and exercising more, as these are what will truly keep you happy and healthy, rather than external achievements.

22. Personality is Changeable

Believe that much of your personality, often seen as fixed, is actually an adaptation to your childhood experiences and can be changed, opening the door to personal growth and self-improvement.

23. Believe in Personal Transformation

Cultivate the belief that it is possible to change certain elements of your personality, rather than assuming you must remain who you are, and actively investigate ways to achieve that personal transformation.

24. Prioritize Time Over Career

Consciously quantify the hidden costs of career opportunities against your personal priorities, such as spending quality time with family, and make decisions that align with your true values, even if it means declining certain engagements.

25. Confront Immediate Regrets

Clarify your priorities by regularly asking yourself what regrets you would have if you were on your deathbed tomorrow, prompting you to take immediate action on things like reconnecting, forgiving, or showing more grace.

26. Frugal Saving for Family Security

Practice frugal saving throughout your life, as the financial security it provides for your family will be a source of profound pleasure and eliminate regrets about their well-being on your deathbed.

27. Earn Respect Intrinsically

Seek respect and admiration through intrinsic qualities such as intelligence, wisdom, humor, and the ability to love and help others, rather than relying on material possessions to fill that need.

28. Invest in Loved Ones (Time & Kindness)

Prioritize spending more time with your loved ones, being kinder to them, and helping them, as these actions will cultivate their love and appreciation more effectively than acquiring material possessions.

29. Model Behaviors for Children

Understand that children primarily learn by observing your actions, so model the behaviors you wish them to adopt, such as being present, kind, and respectful, rather than just instructing them.

30. Acknowledge Luck & Circumstance

When evaluating yourself and others, remember that not all success is solely due to hard work, nor is all poverty due to laziness; acknowledge the significant role of luck and circumstance in life outcomes.

31. Recognize Life’s Luck

Consciously acknowledge and appreciate the ‘forces of luck’ – good things that happen outside your control – in your life, rather than solely obsessing over risks and downsides.

32. Question Happiness Assumptions

Challenge your preconceived notions about what will bring you happiness, as it is often not the material possessions or external achievements you initially believe it to be.

33. Define ‘Enough’ for True Wealth

Cultivate true wealth and contentment by constantly asking yourself ‘what is enough?’ in your life, rather than continuously striving for more material possessions or external achievements.

34. Practice Thought Awareness

Approach practices like meditation with the goal of identifying and becoming aware of your thoughts, rather than trying to fix them, to foster greater self-understanding.

35. Examine Incentive Bias

To gain clarity, regularly ask yourself, ‘Which of my current views would change if my incentives were different?’ to uncover potential biases influencing your perspectives.

36. Reflect on External Contributions

Foster humility and a balanced perspective by regularly asking yourself, ‘How many things outside my control contributed to things I take credit for?’

37. Question Role Models’ Happiness

Critically evaluate your role models by asking, ‘Who do I look up to that is secretly miserable?’ to ensure you are not idealizing external success without understanding their true well-being.