KEY POINTS:
So money's not the source of happiness? Why not?
As Aristotle said, "Money is a means to an end, not an end in itself". So whether it leads to happiness or not depends on what you do with it. The greatest potential that modern-day affluence offers is to live life on our own term.
But wouldn't you prefer to be sad and rich, rather than sad and poor?
Yes, but why settle for second best when you can actually be richer and happier? What is stopping us is the way we think - much of which is mired in our evolutionary past. The brain evolved in an environment where the focus was short-term survival. Hardwired into our brains are reflex thoughts that helped achieve this. But we aren't always great judges of what will make us happy in a world of choices, and where daily survival is less of an issue. It also means we are not very good investors. To make the most of the 21st century, we need to train our minds to escape from the shackles of the past 200,000 years.
What is this hedonic treadmill, and what can we do about it?
Evolution leads us to be vulnerable to the power of the herd or tribe, to the "call of the Joneses". On the savannah, being one of the tribe was essential to survival. Today the unquestioning following of the herd can cause damage. In the modern world it translates into behaviour such as compulsive shopping. Hopping on to the same treadmill as the Joneses and ignoring the fact they are also stuck in the thinking traps of the past leads to a dead end, rather than being a short cut to happiness. We need to build emotional resilience to avoid following others. Take time out to understand your values and inner strengths, and build your life around nourishing these.
What insights does the new science of happiness have to offer?
Happiness researchers distinguish between the pleasures, which are nice yet transient, and activities that give us a greater sense of engagement, so-called gratifications. Gratifications are powerful. They draw on our personal strengths and engage us in activities that are challenging, requiring skill and concentration. We feel a sense of flow, of time standing still and of being energised.
What is the explanation behind happy people tending to make better investors?
Everyone knows the rules for successful investment - purchase sound companies, don't pay too much, diversify and be patient. In practice though, hardly anyone does it. Short-term investment markets are uncertain and there are distracting headlines, such as those about American sub-prime mortgages. Understanding what makes us truly happy is critical in giving us the inner confidence to resist peer pressure. This is the key to being richer and happier.
Does helping others increase happiness? You make it all sound easy. Is it?
Research shows that generosity of spirit, giving with a sense of appreciation, produces the greatest increase in wellbeing. It explains why people such as dedicated teachers, nurses and artists, although poorly paid, typically rank much higher in well-being research than highly paid lawyers and merchant bankers. We spend more time planning for the weekend than we do for the rest of our lives. So make it your New Year's resolution to take some time out to look inwards, identify what is important to you, what will give you a greater sense of meaning and purpose and how you can build your life around it. How Much Is Enough is published by A&B Publishers, rrp $34.95.
