June 28, 2023
We cover a fair bit of ground here on this blog.
But today, I want to take a step back and bring us full circle with a zoomed-out overview of what we’re really trying to achieve here.
As different as we all are, almost everyone reading this is after two things: to be rich, and to be happy.
So I thought it would be refreshing to discuss how we go about building rich and happy lives (and why we bother in the first place!). I’ll also flesh out the real reasons we want these things and explain how achieving one helps us accomplish the other.
Just to be clear, this is not a declaration of success – I’m still working on both of these things. But thankfully, I do seem to get a little further ahead each year.
And so you know, I’m using the term rich and wealthy interchangeably. Yes, there are different classifications and meanings, but for our purposes they’re the same.
There are very few people to whom the idea of being rich isn’t appealing.
But most folks – even those who have the opportunity – do absolutely nothing about it.
Why? For multiple reasons; fear of failure, fear of being criticised, lack of knowledge, or a flat out refusal to believe what’s possible.
Those of you reading this blog are already awakened to the possibility in front of you. You realise you don’t have to settle for the standard path. Your ambition is ignited and you’re taking action to make it happen.
Being rich, wealthy, or whatever word you’d like to choose, has major advantages in the modern world.
Lower stress. Having wealth means not having to worry about incoming bills and ongoing expenses. It also shelters us from fear of job loss, a possible recession, leading to a greater sense of wellbeing.
Time Freedom. In a supposedly time-starved world, being rich removes the need to work, which lets you control exactly what you spend your time on, and how much. This helps you focus on (or find) things that matter to you most.
Choice. Greater options open up in all areas of life. Where to live. How to live. Where to travel. What to work on, including who with and for how long. It also means being able to make a greater impact through philanthropic causes or investing cash into small purpose-driven startups to help them succeed.
Quality. Related to choice, having substantial resources at our disposal means we’re able to focus on quality when we buy anything. With no wealth, we essentially have no choice but to go with cheaper options. Whether it’s food, clothes, healthcare, services, and so on.
Happiness. Rightly or wrongly, most of us connect the idea of being rich with being happy. Not because money creates happiness, but because the above factors make life easier while freeing us to build a life with greater peace, satisfaction and meaning.
Ultimately, having money allows you to make life decisions independently of money. You can operate almost as if money isn’t real. Instead, you focus on what are truly worthwhile things to spend your time and energy on.
In practice, this can include meaningful work, helping others, family time, an appreciation of music and art, enjoying nature, health, spirituality, the list goes on.
Money is largely irrelevant to these things. Yet without money, these things often don’t get the attention they deserve, as our available energy goes toward earning income to pay bills.
The measurement of wealth, in my mind, is simply this: how much money and assets you have, relative to your needs.
Even if the details and intricacies could be discussed for years on end, thankfully, the basic methods for becoming wealthy are straightforward.
It starts with building and fiercely maintaining a cashflow surplus at all times.
We can do that through…
Maximising our income. We can do this through working hard, putting in more hours, climbing the ladder, gaining higher-paid qualifications, developing side income streams and starting businesses.
Being smarter with our spending. This means reducing waste in all areas of our life, to maximise what we’re getting for each dollar. In practice, means prioritising and separating our wants from needs, to maximise the amount of money available for investing.
Continually buying assets. All surplus cashflow gets invested aggressively into a portfolio of quality assets that produce income and increase in value over time. This can include using debt to expand the portfolio even further.
Consistent compounding. We follow the above recipe year after year… after year. All investment returns are reinvested, and compounding takes hold as the portfolio growth takes on a life of its own.
The ongoing effect of having a strong cashflow surplus, continually buying more assets, and the returns from this growing pool of investments, sees your net worth and passive income multiply over time.
Once the income from your assets exceeds your spending, you have freedom.
See, freedom is the real benefit of being rich. If you have a lot of money and lead a luxurious lifestyle, but no freedom, you’re essentially just a fancy slave.
A truly rich life is one that’s built on freedom.
The more you want to spend, the wealthier you need to be in order to have freedom. The less you need, the faster you can be free.
From couch surfing and living on noodles, all the way up to hotel-hopping around the globe and burning up the streets in a Bugatti. It’s a design-your-own-adventure type of deal.
Regular readers are no doubt nodding along like “Ah yep, thanks Captain Obvious, that’s what we’re doing!”
In which case, fuck yeah! You’re going to be rich!
But what’s all this money for? If you really think about this question, and the benefits we listed above, we want money because we want to be happy.
This is an unusual question. Most people are wondering “how can I be happy?” rather than why.
Happiness is a loaded term which means different things to all of us. It’s also a daunting word. We tend to equate it with ultimate or peak happiness. But our moments of peak happiness are, by definition, just moments. They aren’t sustainable. If we think carefully, these moments are probably best described as joy or bliss.
A much better way to frame happiness is using the word contentment. This is where you’re in a peaceful state, feeling fulfilled and at peace with your life. Where nothing is missing. In my view, that’s a more meaningful and realistic version of happiness.
Even though there’s no single prescription of what makes someone happy, there are common ingredients which we’ll discuss in the next section.
Think about your life for a moment. Imagine you’re towards the end of your days after a long and fruitful adventure here on Planet Earth. What emotion do you want to feel?
You want to feel happy and content with the life you’ve lived.
You don’t want there to be regrets of things you shoulda, coulda, woulda done.
So in the big picture, the reason we want to be happy is because we equate that with a life well lived. If we only get one ride on this rollercoaster, then we want to enjoy it. Imagine looking back on your life later and realise it’s been filled with a mixture of boredom, anxiety, worry, and unfulfillment.
That seems like the worst form of regret. Thinking about it, our desire for a happy life seems to be related to regret minimisation. That’s the philosophical side of happiness. But there’s a practical side too.
In addition to the above, being happy just feels good. It lights us up and gives us energy. We’re more motivated, friendly, and focused. We’re more optimistic and deal with stress better.
The emotions of happiness, joy, and contentment are also healthy for us and create positive feedback loops within our body and brain.
Happiness looks a little different for everyone. But there are plenty of commonalities among most people, whether you’re living in Perth or Peru.
Here’s a brief list of things that make for a happier existence and deliver improved life satisfaction:
Appreciate how good you already have it. While your life probably isn’t perfect, there are lots of things you can choose to be grateful for. It only takes a few moments to make a LONG list of ways your life could be worse. Remember how many global citizens yearn for the basics we take for granted; clean water, abundant food, peace and safety, access to healthcare, and so much more.
Do things you’re good at. When we spend time doing activities we enjoy and are good at, it gives us a sense of pride and confidence. And perhaps not surprisingly, we tend to most enjoy the things we’re good at! Practicing and refining a skill makes us feel like valuable and competent individuals, improving our self esteem. Especially so if that skill provides value to other people.
Build positive and uplifting relationships. Humans are social creatures. And while some are more social than others, we all crave connection in one way or another. Whether it’s a hobby club, a family gathering, or nerding out about personal finance with your best friend, having positive relationships is a big driver of health, wellbeing and happiness.
Challenge yourself and grow. This sounds like a contradiction to “do what you’re good at” but it’s not. It’s in addition. We can experience personal growth and fulfilment from reaching goals we’ve set for ourselves, expanding what we thought we were capable of. Having things to look forward to, improve on, and work towards, also gives us greater purpose and a more positive outlook.
Help other people or a cause you care about. The Strong Money blog is a great example of this. After attaining my ultimate goal of financial independence, I started this blog as a way to help others by sharing what I’d learned, and hopefully make a positive impact. It has definitely improved my life satisfaction far more than I could’ve predicted. The same goes for volunteering and giving energy to things outside of yourself. When I’m out planting trees or helping turtles, it’s an incredibly rewarding feeling that makes life more meaningful.
Prioritise your physical and mental health. It’s hard to be happy if you’re sick, tired, and feeling depressed all the time. There’s simply no substitute for physical and mental health. Get plenty of quality sleep, eat nutritious food, challenge your body physically with some form of resistance training and/or lots of bike riding and walking. On the mental side, limit screen time, passive entertainment, and spend more hours outside getting sunshine, fresh air and taking in nature. Make time for reflection and/or meditation to calm and clear your mind.
Fun, play, and wonder. Being sure to make time for fun is an obvious yet underutilised way of boosting happiness. As adults we tend to fall into serious-mode far too often, due to obligations, responsibilities and in pursuit of goals. I’m guilty of this myself. Taking time to be playful, whether it’s laughing and being silly with friends, or playing with your kids or pets. Taking life less seriously is a great circuit-breaker in an otherwise serious life. It can also mean exploration and adventure, like camping trips and visiting new places. Having a sense of wonder for the wider world helps us realise how small our problems really are, and to appreciate the time we have here.
Manage stress and time effectively. The great thing about the modern world is also the worst: having an unlimited amount of things we can choose to do at any one time. This leads to FOMO and trying to do everything, which obviously doesn’t work. Having more space in your days and weeks leaves you feeling less rushed, less anxious and more at peace. Create that freedom by simplifying your schedule down to your most important things, and making more of your workdays optional by becoming wealthy enough to do so!
It’s also worth noting that despite this list, happiness is not a series of check-boxes. If we approach happiness like a series of tasks to complete, and a goal to desperately strive for, we’re missing the point.
Happiness is not about striving or a to-do list. It’s a state of mind we find ourselves in, which coincides with our lives revolving around a bunch of healthy and fruitful things that help a human thrive.
It’s often suggested that being rich and being happy have absolutely nothing to do with each other.
That’s a pretty decent assumption to work off. But it doesn’t mean these two things don’t overlap in meaningful ways. And that’s an important distinction.
Being rich can help you become happy, because you can…
— Be far more selective around what work you do, and how much.
— Control how you spend your time, allocating more to your highest priorities.
— Operate from a mental position of abundance rather than scarcity.
— Invest more time and effort into building happy relationships
— Give back and use your wealth to make a positive difference in the world.
— Attain greater health, have more unique experiences including travel.
— Design your entire life from the ground up with life satisfaction in mind.
All this makes for a higher quality life with greater wellbeing, less frustration and fewer regrets. If you doubt for a second that making work optional gives you the ability to live a better life, remember this: nobody dies wishing they worked more.
Being rich helps us fill in those gaps in our life that might be missing.
As you can see, most of the benefits of being rich revolve around one thing: TIME. Having a lot of money removes the need for us to give up the one resource we can’t get back.
This one might seem like more of a stretch, but hear me out.
By starting from a state of peace and happiness, this can actually help us build wealth to amplify the things in life that money can amplify.
I’m not saying you can just sit under a tree with a dopey grin and have money fall from the sky. No. Becoming rich is an ACTION oriented activity.
What I’m saying is that the action required and the results achieved are much easier if we operate from a state of relative happiness. That’s because…
— You’re starting from a happy place, so you need much less to feel rich. ‘Rich’ is always relative to your desires.
— You’ll find it easier to save and build investments since your spending desires will be limited by your contentment.
— Your positive mindset will help you brush off small problems, daily annoyances, or thinking about the ways others are luckier.
— You’ll have greater mental and physical energy due to better health and not being consumed with stress and anxiety.
— You’ll have the courage to invest aggressively and start businesses due to your optimistic attitude, confidence, and big-picture thinking.
— Making fruitful relationships and networking will be much easier as a happy person, which can help you learn, connect, and grow faster.
— When you operate in abundance mode, you can take action with very little fear, knowing you’ll be completely fine whatever happens.
As with wealth, most of the benefits accrued from being happy also revolve around one thing: MINDSET. A life with all of those happiness factors in place puts us in a much better position to amass wealth.
Being happy gives us a great foundation to become rich, which acts as an amplifier for our life. And being rich allows us to double down on those areas which drive happiness.
There’s another important overlap which needs mentioning: Health.
Without health, you can’t really be happy. And without health, you can’t really be considered rich in the grand scheme of things.
A focus on health not only contributes strongly to our happiness, it’s also beneficial to our wealth goals for several reasons…
We won’t be out eating, drinking and partying all the time, because we’ll prioritise sleep, nutrition and wellbeing. We’ll have better focus, more productive energy and a clearer mind. More time spent on health also means less time consuming, shopping and wasting cash.
Health underpins both of these major life goals. It cannot be neglected for too long without destroying our chances for both happiness and wealth.
Looking at all of this laid out, we can approach these goals in multiple ways.
First, build a happy life and then focus on becoming rich. Or, become rich first and then build a happy life.
Maybe you focus on happiness first, maybe you focus on wealth. You can, of course, work on both at the same time.
I’m not gonna lie. I focused on wealth first, and didn’t care so much about happiness. My thinking was “OK, let me get the money, then I’ll build a happy life from there.”
Frankly, I was simply too disgusted by the idea of being a cog in the machine for another 40 years that I couldn’t possibly imagine being happy with a regular life. That might sound harsh, but I don’t think I’m alone in having that feeling.
Putting it all together, we finally get to the crux of what it means to be a rich and happy individual…
Complete physical and mental freedom. Abundance in time, and abundance in mind.
As we wrap up, let’s remind ourselves of an obvious truth:
You can be very rich without becoming happy. And you can be very happy without becoming rich.
Clearly, being rich can help you become happy, and being happy can help you become rich. But notice I’m saying help… it’s far from a given!
Fortunately, in modern day Australia, we don’t have to choose between the two. We truly can have both.
Having said that, one thing is certain. It isn’t going to be easy.
Why do I say that? Well, if becoming a rich and happy individual was easy, we’d see a lot more of them around!
It takes time and effort, and is a lifelong journey. Like I said, I still consider myself a student in both areas. But as time goes on, I’m hopefully getting a little bit wiser about each.
To everyone reading this, I wish you BOTH wealth and happiness, whatever that looks like for you.
Thanks for following my scribblings on the Strong Money blog, I sincerely appreciate it! 💗