Sterling Terrell

smart ideas from books

Money And Happiness

Money And Happiness

I guess the first thing we need to remember about money and happiness is that the former does not cause the latter.

Sure it can bring short-term delight. But that feeling will not last.

This is easily seen by thinking of a few of your friends who might not be rich but are always content and at peace. Now think of all the billionaires and celebrities who have committed suicide over the years.

If we can get past this fact that so many struggle to swallow, the finer point is this:

The direction of money in your life matters more than the state of money in your life.

A billionaire whose income is going down by 7% per year is an anxious wreck. And my income going up by 7% per year makes me elated.

Why is this the case?

Because direction always matters more than state.

It’s relative, you see.

Samuel Butler wrote, “Happiness and misery consist in a progression towards better or worse; it does not matter how high up or low down you are, it depends not on this, but on the direction in which you are tending.” This seems the key to understanding the relationship between money and happiness.

-Gretchen Rubin, The Happiness Project

Avoiding Bad Financial Situations

Avoiding Bad Financial Situations

No one wants to hear this, but 99 percent of the time, avoiding bad financial situations boils down to spending.

See, true wealth is having – and being content with – more than you need.

A small apartment, an old car, and economical meals that cost $35,000 per year can make someone who earns $40,000 per year feel like a king or queen.

And conversely, how secure is $700,000 per year if you are spending $715,000 per year?

Your financial situation is relative, of course, but always be thinking of ways to make yourself a little bit more resilient.

After keeping my spending below my income, I am constantly looking for opportunities to decrease my overall debt and increase my cash and savings.

The more this is done, the less likely you – or I – will find ourselves in fiscal difficulty.

Here’s to avoiding unpleasant choices that follow financial difficulty.

The wealthy possess the contentment that comes from having enough, whether it is $ 100,000, $ 1 million, $ 100 million, or more. The rich person, whatever he or she does, is going to struggle often with balance and could end up in financial situations that force unpleasant choices.

-Paul Sullivan, The Thin Green Line