How to buy Happiness? (and keep your wallet smiling)

Can money buy you happiness? I say yes, it can. Okay, I know happiness is not something you get in a wholesale shop at a discounted rate. But what if you have enough money to afford a day off from work, buy a gift for your loved ones, or go on that planned-but-not-happening-since-4-years friends trip? Wouldn't that count as happiness?

Now that we agree that money can— ultimately— buy happiness, do you know how to handle your finances for that? Managing finances can be tricky for those who don't know how and where their money goes.

We earn, spend, and save money according to how we perceive the world. I understand if you wouldn't believe some random writer on the internet (me) but take Morgan Housel's word for it. He has explored this complex relationship between money and human behavior. You can read it in his book 'The Psychology of Money.'

The book challenges conventional notions of money by highlighting the impact of individual psychology on financial success. Housel emphasizes that personal finance is not just about numbers and formulas but is deeply rooted in our emotions, values, and beliefs. He explores common behavioral biases such as overconfidence, loss aversion, and the tendency to compare ourselves with others, often leading to irrational financial choices. By examining the experiences of both ordinary individuals and prominent investors, Housel illustrates the importance of long-term thinking, patience, and the ability to withstand adversity in building wealth. He emphasizes the significance of embracing uncertainty and developing a healthy relationship with risk, as these factors greatly influence our financial outcomes.

Here are the key takeaways from the book:

1. Emotions and Behavior: Money decisions are deeply influenced by emotions, beliefs, and behavior, not just rational calculations.

2. Long-Term Thinking: Successful financial outcomes require a focus on long-term goals and the ability to delay gratification.

3. Patience and Resilience: The book emphasizes the importance of patience and resilience in navigating the ups and downs of the financial journey.

4. Embracing Uncertainty: Recognizing the unpredictable nature of markets and embracing uncertainty helps us make better financial choices.

5. Sustainable Financial Success: Instead of chasing quick gains, the book advocates for sustainable financial success based on steady growth and wealth preservation.

6. Biases and Decision-Making: Understanding our biases, such as overconfidence and loss aversion, enables us to overcome irrational financial decision-making.

7. Humility and Perspective: Cultivating humility and recognizing the role of luck in our financial outcomes helps us maintain a balanced perspective.

8. Resisting Comparison: Comparing ourselves to others' financial achievements often leads to dissatisfaction and poor decision-making. Focusing on our own goals and values is more productive.

9. Mindset and Balance: Developing a healthy mindset towards money involves balancing enjoying today and planning for the future.

I needed to read this book because I was a you-only-live-once person, and something dangerous usually happens to you and your wallet if you're saying that before doing anything. By internalizing these lessons, not everyone will become the next millionaire, but they will become financially independent. Also, who knows, maybe you'll buy happiness one day!

-Sneha Patole