Picking up the book Happy Money, written by Ken Honda
I recently picked up the book Happy Money, written by the Japanese Author Ken Honda about the Japanese art of making peace with your money. When I first picked this book up I was skeptical.
I thought it would be in the, ‘just think positive thoughts and you will manifest millions of dollars’ category of self help books. Simultaneously we are in a housing and cost of living crisis, so for many of us making peace with our money is not exactly easy at this time.
Luckily it quickly became clear that the author is very aware of the practical realities and importance of money, both in the book and throughout his own career.
He does however accurately identify one incredibly important truth about personal finances that is often overlooked, the fact that when it comes to our decisions about money, emotions play just as big if not a bigger role than our financial knowledge.
“Many money mistakes are related to emotions, you can be the smartest person in the world, if you don’t have a handle on your emotions and how they affect your behavior, it is impossible to make good, clear decisions around money.”
The core argument
And this brings us to the core argument of his book. We all have an emotional relationship with money, and unfortunately for a lot of people that relationship is negative and unhappy. In many ways his argument is similar to Morgan Housel’s arguments in the Psychology of Money. Which is a book I want to discuss in another video. But Honda adds a little bit more of Japanese zen philosophy.
‘Your money is a reflection of your beliefs about money, if you believe it is something that can be used for good, that is abundant and that it can be given and received freely, your outer life will begin to reflect that inner change, but if you hold on to negative mindsets and false beliefs about money, that it is the root of all evil, that it creates drama, that it is the cause of everything bad in your life your outer reality will soon start to reflect that inner reality.
Now again, Honda is very aware of the practical realities of money as he worked as a business and finance consultant for more than a decade. But he writes that during his years in financial consultancy he met and worked with people in every single income bracket, from the poverty line up to billionaires.
And one thing that he kept encountering was that he found deeply unhappy people with a miserable relationship with money in every one of the income brackets. Millionaires who were constantly worried that they didn’t have enough, or terrified about losing what they had.
On the flipside he also found a lot of people from much more modest income brackets who lived simple lives, who were very happy with the money they made and had a healthy relationship with their finances.
More money does not equal more happiness
We often scoff at these kinds of stories but we also all know about all the lottery winners who lose all the millions they won within a couple years, or professional athletes and celebrities who make 10s if not 100s of millions of dollars but still manage to lose it all at an incredibly fast pace.
And of course your perceived level of wealth is also determined by how you relate to those around you.. Most of us are aware of the concept of keeping up with the joneses. You might have 10 million dollars in the bank but suddenly you might find yourself in social circles where your entire, 10 million dollar net worth is just one art piece hanging in their 300 million dollar yacht.
Because of this Ken Honda argues that it is important to, instead of believing more money will solve all our problems, fix our relationship with money.
“We live in the delusion that becoming rich will make us happy, solve all our problems, and put our worries to rest. The truth is the opposite, the more money we earn, the larger our work or business grows. When companies get bigger, expenses, payrolls and responsibilities get bigger as well, it gets harder to keep things running with the same amount of effort as before and so our troubles and stress increase along with the growth. There is no winning or satisfaction to be found in the game of continually wanting more.”
So is wanting money bad?
This does not mean however that Honda discourages anyone from trying to make more money. But he proposes that it is important to cultivate a certain mindfulness around money. To have a happy emotional relationship with money both on the earning and spending side of things.
Firstly he identifies emotions and beliefs that people often either consciously or unconsciously hold around money. Among the negative ones he identifies, anxiety & fear, anger & resentment, sadness & sorrow, hatred, and desperation, superiority and inferiority, guilt and shame and finally numbness, where you are are so emotionally exhausted by these negative emotions around your financial health that you just don’t bother anymore
He identifies that none of these emotions are necessarily connected to having a lack or excess of money. All of us have felt anxiety and fear around money. It can be about the fear of feeding yourself next month, losing your job, or if you will ever get that salary raise, if your pension will be enough, or it can be fear your multi-million dollar investment will go up in smoke. If you let it, anxiety and fear will be present no matter what stage of wealth building you are in.
The same goes for the other negative emotions we can feel around money. Including guilt and shame, hatred and desperation and of course, superiority and inferiority.
So much of what we do is to quote Fight Club:
To buy stuff we don’t need to impress people we don’t like.
Money in our culture is so intimately tied up with status, prestige and feelings of superiority or maybe even more so, avoiding feelings of inferiority. Of course this game can never be won because there will always be people that have more.
Developing a positive relationship with money
Luckily there are also a lot of positive emotions we can feel around money, such as excitement, joy, appreciation, love, and of course happiness. What Ken Honda then advocates for is to increase our awareness of the emotions we feel around money both when it comes in and goes out.
He argues that many of us hold negative beliefs around money consciously or unconsciously formed by negative experiences in the past. Believes like money is evil or amoral, there is never enough money, money creates trouble and jealousy. Money destroys relationships.
It is better to replace these with positive beliefs around money such as money supports people, it makes people happy, money can help people realize their dreams, money can create bonds between people and money can warm people’s hearts. Even with very small non-expensive purchases. Never underestimate the power of giving or receiving a small token of appreciation, buying a friend a beer or some flowers for a loved one. (insert good boy charlie).
Why do bad, selfish people often get a lot of money?
Now, of course we can hold positive beliefs about money as much as we like, but we also are all aware how often it seems to be bad, narcissistic, corrupt immoral people that attract it. People who are perfectly willing to lie, cheat, steal and screw over others in order to get it. While kind, honest and good hearted people often struggle with it.
Ken Honda is aware of this. His argument is that money is not God, money is not moral or immoral it is just neutral energy that flows to what Honda calls money magnets.
On the immoral side these money magnets are often people that are a combination of narcissists/sociopaths and or pathological liars who have a deep dark hole inside them and they believe that money will fill that hole.
When money is your only value, the only answer to all your problems, it is natural you become good at attracting it and you are willing to cross moral and legal boundaries to get it.
"It’s like playing cards with the devil in a way."
He argues there is always an eb and flow to money and people like this are extremely afraid of losing what they have.
Simultaneously because money alone can actually never fill the hole that exists in them, they chase it forever always thinking they don’t have quite enough. It is because of this they keep chasing it and keep crossing boundaries until it eventually comes back to haunt them, eventually destroying their relationships and often their lives, leaving countless victims in their wake.
The danger of seeing these kinds of people is that we can start to believe there are only 2 options regarding money, be evil or be poor. And when we internalize that belief, we run into trouble.
“people who have a negative view of money always seem to repel it, to struggle with it. ‘They wish there was no such thing as money, so with regards to their own lives, they get what they wish.”
For this reason, even if in our modern media landscape we see a lot of evidence to the contrary, we have to keep operating under the belief that kind, moral positive people can also attract plenty of money.
“Loving what you do and exhibiting a grateful happy energy exerts an incredible pull over the flow of money.”
Honda does not focus so much on the specifics of how much money to make and spend, because of course the reality is that personal finance is just that personal. In most parts of the world making a 100.000 USD will set you up for total financial freedom but in some cities like Palo Alto or Singapore it is actually not so much. Instead he focuses more on the overarching principles of creating a healthy stock and flow of money.
“The Joy of money is in the flow of money.”
and according to him having a good relationship with money comes down to having a healthy stock and flow.
Basically this means that we feel that we have enough of a reserve to weather any financial storm in our lives while simultaneously having a healthy flow of money coming in doing work we find meaningful and money going out on purchases and experiences we find meaningful.
Should you read it?
Of course he goes into this with more depth in the book so I would invite you to read it yourself. I really enjoyed it. It is not a perfect book, sometimes it is overly optimistic and blissfully unaware of the unfair macroeconomic realities a lot of people live in.
Nevertheless on a personal level I do think he makes a good point on trying to have a mindful, positive relationship with money, instead of getting stuck in the rat race of always wanting more.
Let me know what you think in the comments, and which book I should dive into for the next Financial Corgi bookclub!