A new theory of economic decision-making from Mina Mahmoudi, a lecturer in the Department of Economics at Rensselaer Polytechnic Institute, offers an explanation as to why humans, in general, make decisions that are simply adequate, not optimal. In research published in the Review of Behavioral Economics, Dr. Mahmoudi theorizes an aspect of relative thinking explaining people may use ratios in their decision-making when they should only use absolute differences. The inverse is also possible.

Relative Differences And Absolute Differences

“Effectively solving some economic problems requires one to think in terms of differences while others require one to think in terms of ratios,” Dr. Mahmoudi said.“Because both types of thinking are necessary, it is reasonable to think people develop and apply both types. However, it is also reasonable to expect that people misapply the two types of thinking, especially when less experienced with the context.”

Application And Misapplication

Past studies have shown that when given the opportunity to save, for example, $5 on a $25 item or a $500 item, people in general would put in more effort to save the money on the lower-cost product than the more expensive item.They believe they are getting a better deal because the ratio of cost to savings is higher. In fact, the $5 saved is the same for both items and the perfect, or optimal choice, would be to look at the absolute savings and work equally hard to save each $5.

 The $5 Test

“Understanding how the cognitive and motivational characteristics of human beings and the operating procedures of organizations influence the working of economic systems is of critical importance,” Dr. Mahmoudi said.“Many economic behaviors such as imitation occur and many economic institutions like inventories exist because people cannot maximize or because markets are not in equilibrium. Our model provides an example of a behavior that occurs because people cannot maximize.”

Α Case Against The Logic Of Maximizing Behaviour

People consider relative differences and not only absolute differences when making various economics decisions, even in those cases where the rational model dictates that people should consider only absolute differences. A new theory seeks to explain why. 

A new theory of decision-making helps explain why humans often make decisions that are simply adequate, not optimal. According to the theory, people often use relative thinking when they should use absolutes, and vice-versa.

Understand yourself and those around you.

psychology

Psychology

Discover the world of business and economics.

economics

Economics

personaldevelopment

Personal Development

moneyandinvestments

Money & Investments

problemsolving

Problem Solving

New Theory of Decision-Making Seeks to Explain Why Humans Don’t Make Optimal Choices

<ol><li>Trusted hardware isn’t so trustworthy</li><li>Security tooling is still too difficult to use : Or “you can lead a horse to water, but you can’t make it run <code>./configure && make && make install </code>.”</li><li>Side channels everywhere : When God closes a door, he opens a side channel.</li><li>LANGSEC in cryptographic contexts : Figuring out which protocol you’re speaking is the third hard problem in computer science.</li></ol>

By William Woodruff Last week, over 500 cryptographers from around the world gathered in Amsterdam for Real World Crypto 2022, meeting in person for the first time in over two years. As in previous years, we dispatched a handful of our researchers and engineers to attend the conference, listen to talks, and schmooze observe the…

crypto

Cryptocurrency

technologyandthefuture

Technology & The Future

cybersecurity

Cybersecurity

computerscience

Computer Science

Themes from Real World Crypto 2022

<a href="https://thedefiant.io/olympusdao-uniswap-defi-2-0-liquidity-mining/">DeFi 2.0 </a>was expected to provide an alternative for paying out tokens in exchange for deposits. <a href="https://thedefiant.io/what-is-compound-crypto/">Compound Finance </a>may <a href="https://thedefiant.io/compound-incentive-overhaul/">cut rewards </a>. In other parts of DeFi, the money is still flowing.

Ava Labs is the primary company developing the Avalanche blockchain’s ecosystem. Lending protocol Aave launched its V3 last month on both Avalanche and Fantom. the AVAX rewards were part of Avalanche Rush, a $180M incentive program launched <a href="https://thedefiant.io/avalanche-incentives-aave-curve/">last August </a>. The rewards aren’t eye-popping by DeFi standards — as of April 20, the highest APY offered is 9.94% for people who deposit AVAX (and earn AVAX rewards on top of that). Among stablecoins USDT provides the best APY with 6.44% with over half of that coming from the AVAX incentives.

Avalanche and Fantom

Of course those yields are highly variable and have been diluted in the past day as more users supply liquidity to Aave’s V3 deployment on Avalanche — a <a href="https://twitter.com/stableyields/status/1516588586988097546">tweet </a>by Stablecoin Yields on Apr. 19 shows yields of 61% for USDT, above 38% for DAI, and over 17% for USDC.Indeed, data provider DeFi Llama shows an jump in deposits into Aave V3 deployment on Avalanche — total value locked jumped from $6.39M on Apr. 19 to $1.01B. That’s well over a hundred fold increase in a day, which shows how responsive the market is to incentives (and how quickly the resulting yields get diluted).

Jump in Deposits

Now at $4.21B, Aave V3 stands as the No. 1 ranking DeFi protocol in TVL terms on Avalanche, according to DeFiLlama. Despite the near-50% drop, Aave’s V2 on the chain ranks second at the $2.65B mark.  <a href="https://thedefiant.io/avalanche-benqi-defi/">Benqi </a>, another lending protocol native to Avalanche, sits in third on the blockchain in TVL terms at $1.61B.

Affinity for Avalanche

Token rewards for in-app deposits are in a state of flux. 

startup

Startups

Aave V3 Depositors Can Pocket Avalanche Token Rewards - The Defiant

<ul><li>Layer 2 networks are spending more gas than ever settling transactions on Ethereum mainnet. </li><li>The Wednesday following Optimism's token launch saw Layer 2 networks use a record-breaking 3.95% of the daily gas consumption on Ethereum. </li><li>Polygon's co-founder Sandeep Nailwal suggested on Twitter today that Ethereum might eventually evolve into a network where Layer 2 transactions occupy the majority of its blockspace. </li> </ul>

Weekly Ethereum gas spent by Layer 2 networks: Source: <a href="https://dune.com/funnyking/L2-Gas-Consumption">@funnyking/Dune </a> When Ethereum traffic increases it accrues value to all ETH holders. This is because the base gas fees on Ethereum are burned, reducing the overall ETH supply and thus increasing the value of all remaining tokens. In this way Ethereum “profits” as Layer 2 networks use its blockspace to settle transactions more efficiently than can be done directly on mainnet.

Ethereum Profits From Layer 2 Expansion

Ethereum is generating more and more revenue by renting its security to the steadily growing ecosystem of Layer 2 networks.

Ethereum Is Making More Money Than Ever From Layer 2 Networks

<ul><li>30' of meditation</li><li>30' cardio</li><li>shower with cold ending</li></ul>Doing exercises in the first morning hours is most beneficial for your brain.

Wendy Suzuky's morning routine:

Giving your hippocampus a boost by growing new cells.Giving your brain a bath of good chemicals and growth factors: dopamine, serotonin, adrenaline.Even a 10 minute walk will improve your mood.Repetition is important: exercising daily improves neuro plasticity.The more you exercise, the more you're motivated to exercise.

What happens in your brain when you exercise?

Interesting talk about how regular morning cardio exercises can improve your brain. It all starts with that one hour in the morning. Doing early work-outs is the most beneficial to your brain: brings clarity, better mood and resilience when problem solving.

marketingandsales

Marketing & Sales

health

Health

communication

Communication

Huberman Lab | Podcast on Spotify

The idea that we have certain destructive beliefs about money is certainly true.The most obvious destructive beliefs are “money is evil” or “I’m not good with money.” We all get that. Money is good if you use it to do well. And everyone can learn to get better with money.

Toxic Money Beliefs

When you live in the future, you’re always waiting for the moment to start living your life. You live in this empty space in between goals. And it’s not a good place to be in because you’re always anxious.Here’s a little secret: You can be happy now.

1. “I can start being happy only when I’m making more money”

Some people want to retire by a certain age. A lot of people like the number 40 for some reason.People have done the math. If you want to retire by 40 and want to spend $4K a month, you need at least $2.5 million in retirement savings.That’s why many motivational speakers advocate for being a business owner. Because “very few people can become millionaires by being an employee.”But while it’s great to have a profitable business, you really don’t need to be a full-time entrepreneur. Financial freedom is all about having options like an online business, rental income etc.

2. “You need a business to achieve financial freedom”

You act like mortals in all that you fear, and like immortals in all that you desire.

Prioritizing money over time is tough because it’s ingrained in our behaviour.The adage, “being cheap is expensive,” is cliche but true. Everything we do has an <a href="https://dariusforoux.com/opportunity-cost/">opportunity cost</a>.The catch is to not throw money at your problems. It’s common when we’re stressed or unfulfilled. Instead, try to be <a href="https://dariusforoux.com/awareness/">self-aware</a> and find the root cause of these issues. That’s a better way to spend one’s time.

3. “Money is more important than my time”

That’s true but also not true.The problem with this platitude is that it puts us in a scarcity mindset. But building sustainable wealth isn’t about holding on tightly to the small amount of money you make. It’s a matter of creating value.That’s the beauty of building a <a href="https://members.dariusforoux.com/digitalbusiness-school">profitable digital business</a>. You create value in the digital world. And ultimately, that translates to the “real” world.

4. “Money doesn’t grow on trees”

You will get all you want in life if you help enough other people get what they want.

The goal of financial freedom, like many other things, is balance. It’s not about more, more, more. We don’t want to be too cheap or too lavish. We can be ambitious and grow. But at the same time, we also don’t want to overspend and live beyond our means.

Keep Challenging Your Beliefs

Live according to your income.

There are deeper, less-explored toxic money beliefs. These keep us from financial freedom. The first step is to become self-aware of them.

4 Toxic Money Beliefs That Keep You From Financial Freedom

The main understanding we have of filters is that it is different sorting methods that we use for a computer when searching things up It can apply to real life as well when making a decision we can automically cancel the options that don’t fit in our filter For example when thinking of a company to work for we can cancel all the companies that don't treat their employees fair. This mental model can also apply to investing as well

Filters  

The fat pitch strategy is mostly used in investing but can be used in other ways as well it states the value in deliberating waiting and thinking of things before you make a decision For instance imagine if you had only 20 investments in your whole lifetime you would think about every single investment you made to make sure it was right?

The Fat Pitch Strategy 

Dont just want things deserve things. If you want money don’t just want to be rich deserve to be rich.This is a mental model that will help you put in the work needed to succeed it will make sure you deserve the things you get. To deserve something you must meet the opportunity while being prepared

Because You Are Worth It 

For most of your decisions you can follow a probability mindset everything has a probability of success and a probability of failure make sure you are deliberating your decisions making sure you have the best option of success

Probablity Mindset 

They are 7 parts of this series make sure you follow my profile so you don’t miss any of these mental model it helped me get a new job in this recession that I love

Follow Me For The Rest Of The Mental Models 

These mental models have been improving my life drastically 

Charlie Munger, the vice chairman of Berkshire Hathaway and one of the most successful investors ever, is said to have the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you can even finish the sentence. How does he do it? Through observing reality and running it against his mental models. In this series of videos, you’ll learn some of the most important models which Charlie Munger uses, which he has talked about publicly. These mental models have helped Munger to conquer the stock market, but they are so diverse that they have applications within many other areas too. For example, they have allowed Munger to be a successful Chairman at a large hospital, and they have allowed him to overcome devastating personal losses. The series will cover a total of 35 of Charlie’s mental models. He says he has some 100 models in his head at all times, but he also says that a few of them carry most of the freight. I think that we’ll cover the most important ones in this series, which will be divided into 7 parts, will 5 models in each one. The models will primarily be related to investing, but also to associated subjects such as economics, entrepreneurship & career. Hope you enjoy. Part 5: https://youtu.be/InCSo-A033Q The mental models covered in this episode are: 00:00 Intro 01:02 Filters 04:34 The Fat-Pitch Strategy 07:30 Because You are Worth it 09:35 Probability Mindset 12:55 The Bell Curve The mental models that were covered in part 1 (https://youtu.be/ywyQ_eNNCJU ): - The Swiss Army Knife Approach - Make Friends With the Eminent Dead - Invert, Always Invert - Compounding - Crush Your Cherished Beliefs Part 2 (https://youtu.be/cgfuEEnsuAc ): - Opportunity Costs - Parimutuel Betting - Survival of the Fittest - Margin of Safety - The Superpower of Incentives Part 3 (https://youtu.be/p8VK5iajWyw ): - Independent Thinking - Simplicity - Technology as a Problem - The World’s Most Intelligent Question - Circle of Competence My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

Charlie Munger, the vice chairman of Berkshire Hathaway and one of the most successful investors ever, is said to have the best 30-second mind in the world. He goes from A to Z in one move. He sees the essence of everything before you can even finish the sentence.

How does he do it? Through observing reality and running it against his mental models. In this series of videos, you’ll learn some of the most important models which Charlie Munger uses, which he has talked about publicly. These mental models have helped Munger to conquer the stock market, but they are so diverse that they have applications within many other areas too. For example, they have allowed Munger to be a successful Chairman at a large hospital, and they have allowed him to overcome devastating personal losses.

The series will cover a total of 35 of Charlie’s mental models. He says he has some 100 models in his head at all times, but he also says that a few of them carry most of the freight. I think that we’ll cover the most important ones in this series, which will be divided into 7 parts, will 5 models in each one. The models will primarily be related to investing, but also to associated subjects such as economics, entrepreneurship & career. Hope you enjoy.

Part 5: https://youtu.be/InCSo-A033Q 

The mental models covered in this episode are:
00:00 Intro
01:02 Filters
04:34 The Fat-Pitch Strategy
07:30 Because You are Worth it
09:35 Probability Mindset
12:55 The Bell Curve

The mental models that were covered in part 1 (https://youtu.be/ywyQ_eNNCJU ):
- The Swiss Army Knife Approach
- Make Friends With the Eminent Dead
- Invert, Always Invert
- Compounding
- Crush Your Cherished Beliefs

Part 2 (https://youtu.be/cgfuEEnsuAc ):
- Opportunity Costs
- Parimutuel Betting
- Survival of the Fittest 
- Margin of Safety
- The Superpower of Incentives

Part 3 (https://youtu.be/p8VK5iajWyw ):
- Independent Thinking
- Simplicity
- Technology as a Problem
- The World’s Most Intelligent Question
- Circle of Competence

My goal with this channel is to help you make more money and improve your personal finances. How to become a millionaire? There are many ways to get there – investing in the stock market, becoming a stock trader, doing real estate investing, or why not becoming an entrepreneur? But whether you are interested in how to invest in stocks or investing strategies for creating passive income with rental properties – I hope to be able to provide you with a solution (or at least an idea) here. Warren Buffett - the greatest investor of our time - says that you should fill your mind with competing ideas and then see what makes sense to you. This channel is about filling your mind with those ideas. And in the process – upgrading your money-making toolbox.

Thank you for checking out The Swedish Investor. My name is Erik Abrahamsson, and on this channel, I will share with you the most successful strategies for taking your personal finances to the next level, in (well, hopefully) a simple and enjoyable way. Here, you will find time-tested investing advice from the most successful money managers and investors of our time.

About me:
-- Been investing in the stock market since 08/06/2013, and since then, I've beaten the S&P 500 by a fair margin
-- My CAGR on invested stock market capital is 19.5% as of July 2023 (after taxes and brokerage fees)
-- Read about 100 books on the topic of personal finance and investing

For my private stock portfolio & revealing insights into my investment strategy: https://www.patreon.com/TheSwedishInvestor 

I wish you all good fortune in your stock market investing!

Feel free to contact me on: theswedishinvestoryt@gmail.com

The Swedish Investor

Charlie Munger: Mental Models for the Rest of Your Life (PART 4)

Truly thoughts are things and powerful things when they are mixed with definiteness of purpose, persistence, and a Burning Desire for their translation into riches, or other material objectives.

The Power of Thought

One of the most common causes of failure is the habit of quitting when one is overtaken by temporary defeat. Every person is guilty of this mistake at one time or another. More than five hundred of the most successful men this country has ever known told the author their greatest success came just one step beyond the point at which defeat had overtaken them.

Three Feet From Gold

Failure is a trickster with a keen sense of irony and cunning.

One sound idea is all that one needs to achieve success.When riches begin to come they come so quickly, in such great abundance, that one wonders where they have been hiding during all those lean years.One of the main weaknesses of mankind is the average man's familiarity with the word "impossible." He knows all the rules which will not work. He knows all the things which cannot be done.

Lesson In Persistence

<ul><li>Success comes to those who become Success Conscious.</li><li>Failure comes to those who indifferently allow themselves to become Failure Conscious.</li></ul>

Success-Failure

Desire: Knowing what one wants. We can accumulate riches in great abundance, we must magnetize our minds with an intense desire for riches, and we must become "money conscious" until the Desire for money drives us to create definite plans for acquiring it.

Desire

You are "the master of your fate, the captain of your soul."

The money-making secret book Think & Grow Rich learnings in one place (Chapter 1)

Offers the secrets of super achievers, such as Henry Ford, Andrew Carnegie, and John Rockefeller, and explains how to use their secrets for success.

writing

Reading & Writing

books

Books

Ever wondered how life would be if we could condition our minds to Think and Grow Rich? Author Napoleon Hill claims to have based this book on twenty years of rigorous research on the lives of those who had amassed great wealth and made a fortune. Observing their habits, their ways of working and the principles they followed, Hill put together laws and philosophies that can be practiced in everyday life to achieve all-round success. The narrative is rich with stories and anecdotes, which not only inspire, but also show a way forward to take action. After all, riches are not just material, but also pertaining to the mind, body and spirit.  Having sold more than fifteen million copies across the world, this book remains the most read self-improvement book of all times!

Oliver Napoleon Hill was an American self-help author. He is best known for his book Think and Grow Rich, which is among the best-selling self-help books of all time. Hill's works insisted that fervid expectations are essential to improving one's life.

Napoleon Hill

Think and Grow Rich

<ul><li>The American dream the middle class keeps chasing is dead.</li><li>You have to make yourself the only person who controls your dreams.</li><li>Choosing yourself begins with a daily practice of good habits in 4 areas:</li></ul><ol><li>Mental health</li><li>Physical health</li><li>Emotional health</li><li>Spiritual health</li></ol>

Some Key Points From This Unusual Book

In 2008 the American dream bubble abruptly burst. The world’s biggest financial crisis lead to companies ruthlessly cutting costs – mostly in the form of people.Almost everything can now either be outsourced or done by technology, which is why thousands of college graduates now find themselves unemployed or underpaid – the end of jobs is here.But what should you do if your fancy college degree now only gets you a job at McDonalds? Is it all bad? No. Here’s what to do.

The American Dream Is Dead

Remember this: You have to make yourself the only person who controls your dreams.If financial freedom is your dream, then you have to control your income, which means creating products, freelancing, making passive income from affiliate marketing, selling books, courses, teaching seminars – do any one, or even better, all of these.Why aren’t you the only one who controls your dreams already? Because you’re afraid.<ul><li>Afraid of what our family will think if we leave our “stable job”.</li><li>Afraid of what friends might say.</li><li>Afraid of our customers rejecting us.</li></ul>

The Only Person Who Controls Your Dreams

Rejection—and the fear of rejection—is the biggest impediment we face to choosing ourselves.Avoiding rejection is a powerful motivator. But it makes us miserable.As long as you choose to live with that fear, instead of acting in spite of it, you are giving others the power to make your choices for you.

We Usually Avoid Conflict And Rejection

There’s a saying, ‘The learned man aims for more. But the wise man decreases. And then decreases again’.This is about a new phase in history where art, science, business, and spirit will join together, both externally and internally, in the pursuit of true wealth.What you need to do is build the house you will live in. You build that house by laying a solid foundation: by building physical, emotional, mental, and spiritual health

A New Way Of Living

I have to count the things that are abundant in my life. Literally count them. If I don’t they will begin to disappear.

Only think about the people you enjoy. Only read the books you enjoy, that make you happy to be human. Only go to the events that actually make you laugh or fall in love. Only deal with the people who love you back, who are winners and want you to win too.The only skills you need to be an entrepreneur are the ability to fail, to have ideas, to sell those ideas, to execute on them, and to be persistent so even as you fail you learn and move onto the next adventure.

The Focus On The Joyful LIfe

Pretend everyone was sent to this planet to teach you.

The only truly safe thing you can do is to try over and over again. To go for it, to get rejected, to repeat, to strive, to wish. Without rejection there is no frontier, there is no passion, and there is no magic.Every time you say yes to something you don’t want to do, this will happen: you will resent people, you will do a bad job, you will have less energy for the things you were doing a good job on, you will make less money, and yet another small percentage of your life will be used up, burned up, a smoke signal to the future saying, “I did it again

Do What You Love To Do Even If You Get Rejected

Success comes from continually expanding your frontiers in every direction—creatively, financially, spiritually, and physically. Always ask yourself, what can I improve? Who else can I talk to? Where else can I look?Every time you say yes to something you don’t want to do, this will happen: you will resent people, you will do a bad job, you will have less energy for the things you were doing a good job on, you will make less money, and yet another small percentage of your life will be used up, burned up, a smoke signal to the future saying, “I did it again’.

Keep Digging

I don’t like the word purpose. It implies that somewhere in the future I will find something that will make me happy, and that until then, I will be unhappy

<ul><li>Rodney Dangerfield didn’t succeed in comedy until his forties.</li><li>Ray Kroc was a milkshake salesman into his fifties. Then he stumbled onto a clean restaurant that served a good hamburger run by two brothers with the last name McDonald. He bought McDonald’s when he was fifty-two.</li><li>Raymond Chandler, the most successful noir novelist of all time, wrote his first novel at age fifty-two.</li></ul>

Stories: Success Has No Age

Think of two people in your network who don’t know each other but you think can add value to each other’s lives. Introduce them. Do this every day. Get better and better at it. The more value you bring to the people in your network (even if it doesn’t directly bring value to you in an immediate way), the greater the value of your network. And then the greater value you will have

Be A Connector

<ul><li>If you have an idea, don’t focus on the money. Don’t focus on how you will make a living. Do this: Build your product. Sell it to a customer. Start shipping. Then quit your job.</li><li>Often the real reason someone buys from you is not for your product, but for you</li><li>If you want to be successful, you need to study success, not hate it or be envious of it. If you are envious, then you will distance yourself from success and make it that much harder to get there.</li><li>As yourself: What’s the lifetime value of the customer? What are the ancillary benefits of having this customer?</li></ul>

Success And Your Customers

What to do when struggling with idea topics:Search phrases on social media like: ‘I wish I had’, ‘I just paid someone to’, ‘is the worst product’, ‘is a horrible company’, ‘has a terrible website’, ‘is my favourite website’, ‘does anyone know how...' This will expand your thinking and provide you with puzzle pieces to connect.

Finding New Ideas: Mental LEGO

Honesty is the only way to make money in today’s world.

A holistic book on improving every part of your life.

The world is changing. Markets have crashed. Jobs have disappeared. Industries have been disrupted and are being remade before our eyes. Everything we aspired to for “security,” everything we thought was “safe,” no longer is: College. Employment. Retirement. Government. It's all crumbling down. In every part of society, the middlemen are being pushed out of the picture. No longer is someone coming to hire you, to invest in your company, to sign you, to pick you. It's on you to make the most important decision in your life: Choose Yourself. New tools and economic forces have emerged to make it possible for individuals to create art, make millions of dollars and change the world without “help.” More and more opportunities are rising out of the ashes of the broken system to generate real inward success (personal happiness and health) and outward success (fulfilling work and wealth). This book will teach you to do just that. With dozens of case studies, interviews and examples–including the author, investor and entrepreneur James Altucher's own heartbreaking and inspiring story–Choose Yourself illuminates your personal path to building a bright, new world out of the wreckage of the old.

The world is changing. Markets have crashed. Jobs have disappeared. Industries have been disrupted and are being remade before our eyes. Everything we aspired to for "security," everything we thought was "safe," no longer is: College. Employment. Retirement. Government. It's all crumbling down. In every part of society, the middlemen are being pushed out of the picture. No longer is someone coming to hire you, to invest in your company, to sign you, to pick you. It's on you to make the most important decision in your life: Choose Yourself. New tools and economic forces have emerged to make it possible for individuals to create art, make millions of dollars and change the world without "help." More and more opportunities are rising out of the ashes of the broken system to generate real inward success (personal happiness and health) and outward success (fulfilling work and wealth). This book will teach you to do just that. With dozens of case studies, interviews and examples-including the author, investor and entrepreneur James Altucher's own heartbreaking and inspiring story-Choose Yourself illuminates your personal path to building a bright, new world out of the wreckage of the old.

James Altucher

Choose Yourself

Choose Yourself!

Science increasingly shows that there is a right amount of money for happiness, but that countless variables make the amount change for little reason. The problem must be approached another way.Philosophers have asked the same question. Every thinker who has tried to answer the question of how to live has had to wonder how much money was right to have. Here, we have the ideas on how money affects happiness from ten philosophers that might help you decide how much money is enough.

The Right Amount Of Riches

In Aristotelian philosophy, virtue is the key requirement for a life well lived. But while his stoic contemporaries thought virtue alone would assure a good life, Aristotle knew that a few other things would be needed. Among them are <a href="https://bigthink.com/scotty-hendricks/do-you-have-true-friendships-why-aristotle-thinks-you-dont">friendship</a>, good luck, and money.While he saw money as merely a tool to promote other goals, he is open about the fact that the good life requires that you have a fair amount of it. One of the items on his list of virtues needed to live a full life is magnificence, which involves the donation of large sums to charity.

Aristotle

The life of money-making is one undertaken under compulsion, and wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.

Henry David Thoreau is famous for retreating to a cabin near Walden pound and writing a book about his experiment of living a simple, self-sufficient life in the wilderness. While his experiment is often presented as more than it was, <a href="https://www.newyorker.com/magazine/2015/10/19/pond-scum">his cabin wasn’t that far from a town and his mother usually cooked and cleaned for him</a>, his ideas on the simple life are still worth considering.His time in the woods showed him the benefits of living simply; such as how much humanity can gain by spending more time in nature and how getting away from material pleasures can help us live a fuller life.

Thoreau

To have done anything by which you earned money merely is to have been truly idle or worse

Epicurus was a philosopher with some bold ideas on how to make people happy. He lived in the countryside in a large house with a dozen other people where they all lived communally. He argued that the path to happiness was moderation, strong friendships, and philosophy.Rather than accumulating wealth, one should try and live a simple life and find joy in things like friends, the pleasures of work, and philosophy. The moderate life, however, didn’t require much money at all.

Epicurus

If you wish to make Pythocles wealthy, don’t give him more money; rather, reduce his desires.

Nietzsche argued that the morality of the gospels was a slave morality which was based on a sort of sour grapes approach to things. Since the authors of the gospels didn’t have money or power they declared those things to be evil and the poverty and weakness they had to be good. Nietzsche sees this reactionary morality to be unbecoming of great people.This doesn’t mean that he thought hoarding cash was good, but he does warn us to be wary of the poor man who derides money as evil and useless to our happiness.

Nietzsche

Kierkegaard strikes out against how people are increasingly dispassionate, conforming, and detached. He blames, among other things, money for causing some of this. As the abstraction of real value, it tends to make us desire of it rather than the things it can buy or represents.Kierkegaard implores us to dive headfirst into life and live it fully and desiring too much money is a symptom of not doing so.

Kierkegaard

Schopenhauer was a pessimistic thinker who felt that most people were doomed to rather unpleasant lives. He was so convinced of this that he was one of the first prominent anti-natalists and wrote that most people were better off not being born. His advice on how to be happy is fittingly strange.Schopenhauer’s great solution to the endless miseries of life is to withdraw from them and live ascetically. Money then, that cause of infinite desire, labor, and strife, is to be avoided. The worst part of his solution is his understanding of how few people could hope to carry it out.

Schopenhauer

Wealth is like sea-water: The more we drink the thirstier we become; and the same is true of fame.

Franklin was independently wealthy. After a lifetime of wise investments, hard work, and a fair share of luck, Franklin was able to turn his attention to his social projects and not have to worry about money again.His ideas on wealth were similar to Aristotle’s in many ways. He wrote a book on <a href="http://www.swarthmore.edu/SocSci/bdorsey1/41docs/52-fra.html">how to earn and save money</a> and associated having wealth with having a least a few virtues. He also agrees that, while good to have, money is at best a tool for getting other things. Unlike Aristotle, however, <a href="https://bigthink.com/scotty-hendricks/ben-franklins-13-guidelines-for-living-a-good-life">his list of virtues</a> does not require wealth to live life to the fullest.

Ben Franklin

The use of money is all the advantage there is in having money

Marx reminds us that money, for all the bad things philosophers often say about it, is extremely useful. It drives history, grants the ability to accomplish great things, and often consumes too much of our time. His philosophy of communism isn’t so much against wealth as it is an attempt to tame it and make it the servant of humanity rather than the problem it frequently can be. The results have been mixed at best.

Karl Marx

His life story and later dedication to intellectual pleasures speak against a life of chasing money as the path to Nirvana. However, extreme poverty is no solution either. While many Buddhist monks are supposed to avoid even touching money, the rest of us are encouraged to have the “right livelihood” and earn it virtuously. This also includes not having more than we need.We are warned that there is too much of a good thing and that we should not suppose that more money is the solution to suffering. Having nothing isn’t too much fun either though.

The Buddha

Faith is the best wealth for a man in this world. Righteousness when well practiced brings happiness.

Needleman has spent decades <a href="https://www.fastcompany.com/28699/money-and-meaning-life">helping people navigate life</a>. He is often sought out as a consultant on how to handle money at the conceptual level and has a lifetime of advice on how money affects us to give out.One of his realizations is that money doesn’t solve problems or provide answers. While it might assure that we have access to necessities, it won’t cure us of worrying about having them. He reminds us that there are things that money can’t buy, like happiness, that we must never lose sight of; even if it is nice to be able to buy that trip to Hawaii without saving for it.

Jacob Needleman

Those who criticize the wealthy don’t realize that money is needed to do good things.

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Motivation & Inspiration

10 philosophers on whether money can make you happy

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