The Psychology of Wealth And Happiness: Lessons From Adam Smith And Ray Dalio

It’s senseless to have money as your goal as money has no intrinsic value — 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.

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.

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.

“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.

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.

•  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).

• 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.

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.

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.

If you have a positive outlook on life, you can make friends and find happiness in even difficult situations.

• Your happiness doesn’t depend solely on how much you accumulate. It helps but to a certain extent.
• 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.
• Find your income bar and commit to other things, activities, and experiences that bring out the best in you.