Over 500,000 people visited Farnam Street last month to expand their knowledge and improve their thinking. Work smarter, not harder with our free weekly newsletter that's full of time-tested knowledge you can add to your mental toolbox.

How To Be Happy

Warren Buffett and Charlie Munger on the key to happiness

If I were to ask you if you wanted to be happy, 100% of you would say yes. But how many us live our lives in a way that makes us happy?

“The days are long, but the years are short. Time is passing, and I'm not focusing enough on the things that really matter.” — Gretchen Rubin, author of The Happiness Project.

At the Berkshire Hathaway shareholders meeting in Omaha this past weekend, a 30-year old asked what advice the 82-year-old Warren Buffett and his 89-year-old business partner, Charlie Munger, would give if they could communicate with their 30-year-old selves.

Their response might surprise you.

First let's recap a little be about what we think we know about happiness.

Happiness refers to two different phenomena:

The problem begins with language. We use the word happiness, Kahneman says, to refer to two very different and often mutually contradictory phenomena: the mood of the moment and our overall life-satisfaction. The former is an evanescent and notoriously unreliable gauge of the latter. Example: the joy of buying a new car vs. the subsequent, ongoing annoyance of paying the monthly bills.

A lot of people think happiness is about money. But according to Daniel Kahneman:

millions of dollars won’t buy you happiness, but a job that pays $60,000 a year might help. Happiness levels increase up to the $60K mark.

Other people think that if you live a long time you'll be happy. But Alan Watts offers this tidbit of wisdom:

What would you do if money were no object? You do that, and forget the money. Because if you say that getting the money is the most important part then you will spend your life completely wasting your time. You will be doing things you don’t like doing in order to go on living, that is to go on doing things you don’t like doing. Which is stupid. Better to have a short life that is full of what you like doing than a long life spent in a miserable way.

To some extent experts feel that happiness involves being busy, but not rushed.

We know that moving to California won't make you happy. Kahneman explains:

Kahneman’s decades of cognitive research, much of it done in collaboration with longtime colleague Amos Tversky, has shown that humans are subject to what he calls a “focusing illusion.” We focus on the moment, overestimating the importance of certain factors in determining our future happiness and ignoring the factors that really matter.

For this reason, people commonly assume that moving to a warmer climate will make them significantly happier.

Steve Jobs, never one to follow the path, says often what we get told should make us happy results in a very limited life.

When you grow up, you tend to get told that the world is the way it is and your life is just to live your life inside the world, try not to bash into the walls too much, try to have a nice family life, have fun, save a little money.

That’s a very limited life. Life can be much broader, once you discover one simple fact, and that is that everything around you that you call life was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. Once you learn that, you’ll never be the same again.

Maybe we'd have more luck if instead of trying to be happy we inverted the problem and avoided the things that make us unhappy.

That brings us back to Buffett and Munger. What they say about life is equally important as what they say about investing.

MUNGER: We're basically so old-fashioned that we're boringly trite. We think you ought to keep plugging along, and stay rational, and stay energetic. Just all the old virtues still work.

BUFFETT: But find what turns you on.

MUNGER: Yeah, you have to work where you're turned on. I don't know about Warren, but I've never succeeded to any great extent in something I didn't like doing.