“There is no path to happiness. Happiness is the path.” – Buddha
My daughter suggested recently that I listen to a podcast in which Steve Bartlett, who has a podcast series “The Diary of A CEO with Steve Bartlett”, interviewed Morgan Housel (podcast here, 1 hr, 57 mins). Mr Housel is the rather well-known author of “The Psychology of Money” (summary here), released in 2020. Admittedly, I have not read the book, but I did find the discussion on the podcast interesting as far as lifestyle and simple investment strategies.
Not surprisingly in that my youngest daughter recommended it, I found the podcast especially relevant for Generation Z. It reminded me of many of the messages I have tried to instil into my now-grown children for years. Having said this, the messages resonate beyond Gen Z. I have plenty of contemporaries that fancy their knowledge of financial markets and wealth accumulation, but as experienced as they are, they find managing their own money challenging and stressful. Beyond this – and as I am sure you know because the world is littered with examples – money and wealth do not guarantee happiness. In fact, it is sadly often the contrary.
I have made plenty of mistakes in my life, but have fortunately managed to navigate choppy waters at times through a combination of skill and luck (and never underestimate the latter). I learnt from my mistakes, many of which were painful at the moment but have made me a better person and have contributed to my current “happiness level” today. No one is infallible, and humility is very important as I discuss towards the end of this article.
I would like to quickly share a few thoughts that I have tried to instil in my children, many of which overlap with Mr Housel’s comments in his podcast interview.
Your job: I believe the minute that you wake up dreading going to work is the day you should change jobs. More broadly, it might even mean changing careers. Whatever you wish to do to make a living, make sure you are passionate about it. The surest way to being unhappy is:
working with colleagues that are unpleasant to work alongside, or
reporting to an overbearing or incompetent manager, or
engaging with clients you do not like, or
selling a product or service you do not believe in, or
working at a company that is going nowhere fast.
Don’t whittle away your well-being and happiness by working 40+ hours/week doing something that you do not enjoy, because it will gradually but surely wear you down over time.
Your “burn rate”: This one is simple on the surface but can be difficult to execute: calibrate your expenses (i.e. “run rate”) to align with your income and desired standard of living, making absolutely sure that you set aside as much as you can afford for savings on a regular basis. To work excessively in order to have the latest branded product, go to the most expensive restaurants, or to join the most popular club, is hardly worth it in the long run. “I wished I had worked harder” is not something a person mentions on their deathbed.
Your savings: The principals are:
Make savings systemic, something that is done regularly and automatically
Start early in life, no matter how little the amount is you can set aside
Take advantage of employer matching plans, especially maxing out employer-sponsored retirement schemes like 401k’s (US) and pension plans (UK)
Have some “rainy day” cash set aside for unexpected expenditures
Invest in stocks whether markets are up or down (known as “dollar-cost averaging”), and use low-cost index funds to do so
Reinvest dividends from stocks, ETFs and/or mutual funds into the same shares, also a form of dollar-cost averaging.
Minimise debt: Debt is a claim on your future. It can be incredibly tempting because credit is so readily available to nearly everyone. Credit can plug the gap between your income and desired lifestyle, but this almost always ends in tears. The exception to this is when debt is incurred to finance a long-term asset (rather than consumption). The principal example of this is borrowing through a mortgage to buy a house, although one might argue that an asset like a car with five year+ expected life can make sense, too. Debt is expensive and addictive, so use it sparingly.
Look after your physical and mental well-being: Although I am mentioning this next-to-last, in reality it is the most important thing on which a person should focus. Find a physical activity that you enjoy, prioritise it and make it a daily habit. Change the routine around to keep from getting bored, but make physical well-being your top priority. Possibly the most neglected part of a person’s life is their mental well-being. Mental health issues are no longer taboo, and most issues can be addressed once an issue is recognised. In a nutshell, “mind & body” should be a major priority for everyone in their quest to maximise happiness.
Humility: No matter how smart you might think you are, or how rich or successful you might be, practice humility (and kindness) in abundance. We all make mistakes, and the most important thing is to learn from your mistakes and forgive yourself, so you are not weighed down by guilt. I have never been big on regrets because the past is the past. But the past is invaluable in that the lessons learnt can make you a better person in the future. Remember – “no rain, no flowers.” Navigate the ups and downs, and always remain focused on the prize which is happiness.
“The most important thing is to enjoy your life – to be happy. It’s all that matters.” – Audrey Hepburn