“This is the money you need to be happy”

Morgan Housel is an American financial expert famous for his bestselling book The psychology of moneywhich has sold more than eight million copies worldwide.

This advisor has granted an interview for the Daily Mail in which he talks about his new book, The art of spending money: Simple decisions for a fuller lifewhere he answers questions like whether money brings happiness and where he reveals that financial success has less to do with spreadsheets than with psychology.

To the first question, Housel answers: “Spending money can bring happiness, but it is usually an indirect path. Money in itself does not bring happiness, but it can help you find independence and a purpose, two key ingredients for a happier life if you cultivate them.

“A big, nice house can make you happier, but above all because it makes it easier to invite friends and family. And, actually, It’s friends and family who make you happy“says the American expert.

According to Housel, the main thing is to have basic needs covered (food, housing and adequate medical care). But what after? “If you ask people: ‘How much money would you need to be happy?‘The answer is usually about double what you currently earn,” he explains.

“If you were on a desert island with just my family, and no one could see how we lived—no one could see your house, your car, your clothes, your jewelry—how would you live? For me, and I think for most people, you immediately tend to move away from status and to look for utility,” he continues.

Housel’s idea is not that we should never buy any whim, but that we should reflect on why we want it.

“What you want is to get to a point where you can wake up every morning and say: ‘Today I can do whatever I want’even if what you really want is to go to work,” says the expert.

“You need a certain degree of independence and also a purpose to live for, to strive for, to work towards every day,” he adds.

How to achieve it? Its fundamental principle is simple: regardless of your income, live below your means. “Who wins 50,000 dollars but you only need 40,000 to be happy he is richer than someone who earns 150,000 but needs 151,000 to be happy.

In addition, Housel keeps unforeseen events in mind, especially after the pandemic: “I do everything possible to prepare for the worst. But you can’t live preparing for apocalyptic catastrophes. It’s not sensible and I’m not going to let that keep me up at night!” says Housel. “What you can do is live in a way that give you a certain margin of safetysome flexibility, so that when life takes a turn, you can deal with it,” he says.

“Don’t let anyone tell you what you should or shouldn’t spend your money on. There is no right way. You have to discover what makes you happy and fulfills you. Each person is different. “My desire to live a relatively simple life is not because I don’t enjoy good things,” he continues.

Housel himself affirms that he cannot resist a whim from time to time: “I just bought the new Apple iPhone. The appeal is so tempting, the siren song that tells you: ‘This is going to change my life.’ And the next day, you realize that it’s not that big of a deal“The lesson is not to completely resist that dose of dopamine, but to remember how fleeting it is, he says.