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1-Page Summary of Happy Money
Overview
The book Secrets of the Millionaire Mind explains how people develop rigid attitudes and behavioral patterns about money based on their upbringing. They unconsciously carry these beliefs with them into adulthood, which will determine whether or not they are wealthy. The book presents the guiding principles that millionaires live by to help anyone become rich if they adopt those principles as well.
In our modern world, money and happiness are linked in many ways. However, the relationship between them is not well understood. Research shows that how you spend your money can make you happier than how much of it you have. The author presents five key points to help people understand this important concept better: 1) Money doesn’t buy happiness; 2) Don’t spend on things; 3) Spend on experiences instead of things; 4) Give more to others and 5) Invest wisely in yourself.
In the following points, you will learn how to buy a robot that cleans your house and increases happiness. You will also discover why cutting up credit cards is good for you, as well as spending money on others rather than yourself.
Big Idea #1: People think that money, cars and houses will make them happy. However, it’s not the case.
Most people think that if they could win the lottery, their life would be perfect. They believe once they can buy a luxury car or a dream beachfront house, then they will truly be happy.
The connection between money and happiness is well-established. In fact, thousands of studies have been done to prove this connection, so it’s a widely accepted notion that people with more money are happier than those who don’t have as much.
However, it isn’t true that a linear connection exists between money and happiness. Statistics show that if your income were to double from $25,000 to $55,000 per year you’d only be 9 percent happier.
So, why is it that having more money doesn’t make us as happy as we think it would? It’s because our income has little influence on how often we smile or laugh. In fact, research has shown that thinking about wealth can suppress behaviors which would actually make us happier. For example, when people were shown pictures of money they were more likely to choose solitary activities like cooking classes rather than social ones like dinner with friends.
While money won’t make you happy, having it isn’t a bad thing. If you’re unhappy with your finances, take a look at how you spend your money. These next five tips will help you spend in ways that will make you happier.
Big Idea #2: Things don’t make you happy, but experiences do. And the memories you create using those things keep you happy in the long run.
Food, clothes and taxes are necessary expenses. Unless you live in a cabin on a farm with no electricity or internet access, you can’t avoid spending money to live. So instead of seeing it as an obligation, how can we spend our money so that we’ll be happier?
The solution to this problem is to buy fewer material things, like cars and electronics, and use the money you save for experiences.
This is backed by data. One survey found that 57% of Americans felt happier after spending money on a vacation rather than jewelry, while only 34% thought the opposite way.
A study showed that adults in America who consider themselves generally happy tend to spend their money on leisure activities, such as going to the movies and sporting events. Another study showed that experiences make people happier than material things. Memories are created from experiences, which influence our happiness. Friends or family members participating in an experience with us help create a memory and increase our sense of belongingness. Objects don’t have this effect because they aren’t able to stimulate our senses like experiences do; nor can objects create memories for us, which makes them less valuable than experiences are when it comes to happiness. Experiences need not be expensive or grandiose; even something as simple as listening to a new song is more enjoyable when purchased with cash rather than bought using credit card debt.
