My Favorite Lessons from The Algebra of Happiness

5 min read

I don’t remember where I first discovered NYU Stern professor Scott Galloway, but I do recall what he said that first caught my attention:

“I teach business at NYU Stern to students who don’t know what they want to do in life. After all, if you were certain what you wanted to do, you wouldn’t be back in business school.”

He’s blunt. He says what’s on his mind and doesn’t care what people think. This is partially what drew me to check out his book titled The Algebra of Happiness: Notes on the Pursuit of Success, Love, and Meaning.

It’s a book about life lessons that Galloway has accumulated through the years and some practical advice he has for finding happiness.

Here are my favorite lessons from the book.

1. Sweating vs. Watching

One of my favorite lessons from the book is the idea of “sweating vs. watching”:

The ratio of time you spend sweating to watching others sweat is a forward-looking indicator of your success.

 

Show me a guy who watches ESPN every night, spends all day Sunday watching football, and doesn’t work out, and I’ll show you a future of anger and failed relationships.

 

Show me someone who sweats every day and spends as much time playing sports as watching them on TV, and I’ll show you someone who is good at life.

This reminds me of one of my favorite life maxims:

Easy choices = hard life.

 

Hard choices = easy life.

The more time you spend sweating, the more freedom you’re likely to have in the future. The more time you spend watching others sweat, the less freedom you’re likely to have in the future.

2. Choose the right partner

Having a spouse, or life partner, whom you not only care for and want to have sex with, but who’s also a good teammate, softens the rough edges, and magnifies the shine of life.

 

I have several friends with impressive careers, wonderful friends, and a spouse they love. But they aren’t happy, because their spouse isn’t their partner. Their goals and approaches to life are out of sync. Misalignment on what’s important and a lack of appreciation for the other person makes everything…harder.

 

My friends with less economic success who spend less time with friends but who have a real partner to share their struggles and successes with are tangibly happier. 

Galloway goes on to share that the most successful romantic partnerships tend to be the ones where the partners are synced up on three things:

1. Passion – Physical attraction.

2. Values – The partners are on the same page about their values like religion, how many kids to have, how to raise kids, where to live, and what sacrifices are appropriate to make for economic success.

3. Money – The partners are on the same page about what type of lifestyle to lead and how much spending is needed to be happy.

3. Notice what makes you happy

Take notes on the things that give you joy and satisfaction, and start investing in those things. Pay special attention to things that bring you joy that don’t involve mind-altering substances or a lot of money.

 

Whether it’s cooking, capoeira, the guitar, or mountain biking, interests and hobbies add texture to your personality. Being “in the zone” is happiness. You lose the sense of time, forget yourself, and feel part of something larger.

Galloway shares that he personally spent too much time focusing on money when he was young and not enough time noticing the things that brought him joy or meaning. Once he started doing this, he discovered how much he loved writing and how much satisfaction it brought him:

I made the mistake of spending all my time, for most of my life, trying to figure out how to make more money, instead of taking a pause and asking myself what makes me happy…

 

I found writing only several years ago, and it’s now one of the most rewarding parts of my life. Writing is my therapy. It’s a way for this shit banging around in my head to find an escape route. It’s a chance to immortalize how much I love my kids, miss my mom, and love Chipotle.

 

Writing has reconnected me with people I care about and introduced me to new, interesting people. I hope that, after I’m gone, my kids will read this stuff and feel they know me better. I wish I’d started writing thirty years ago.

This lesson resonated deeply with me. In my early years of college, I was so focused on getting a degree in a high-paying field that I dropped most of the hobbies I used to enjoy when I was younger. Fortunately, since graduating college I’ve rekindled a few including:

• Writing – which has become my full-time job now with blogging!
• Reading
• Playing the keyboard
• Drawing
• Playing basketball 

No matter where you’re at financially, it’s always worth pausing to take note of the hobbies that bring you joy and consciously invest more time into them. 

4. Equity = Wealth

It’s difficult to get to economic security with just your salary, as you will naturally raise or lower your lifestyle to match what you make. As soon as possible, buy property or stocks, and try to find a job that has forced savings through a retirement plan or, better yet, options on the firm’s equity. Always be in the stock market, because you aren’t smart enough to predict when to jump in and out on your own. 

The path to accumulating wealth involves owning assets that earn money for you while you sleep. Galloway cites property and stocks as examples, but there are tons of different types of assets you could own to help you build wealth.

5. Rich = Passive Income > Burn

The definition of “rich” is having passive income greater than your burn. My dad and his wife receive about $50,000 a year from dividends, pension, and Social Security, and spend $40,000 a year. They are rich.

 

I have a number of friends who earn between $1 million and $3 million, with several children in Manhattan private schools, an ex-wife, a home in the Hamptons, and a lifestyle fitting of a master of the universe. They spend most, if not all, of it. They are poor.

This is perhaps my favorite lesson from the book. Most people believe the following formula is true:

High income = rich

In reality, the true definition of rich is more like:

Passive income > burn = rich

You’re rich if your passive income is greater than your lifestyle expenses (e.g. your “burn”). Once you reach this point, life becomes much more stress-free.

6. Experiences > Things

Studies show that people overestimate the amount of happiness things will bring them and underestimate the long-term positive effects of experiences. Invest in experiences over things. Drive a Hyundai, and take your wife to St. Barts.

This isn’t groundbreaking advice, but it’s a nice reminder. Over the long-term, experiences tend to bring us more satisfaction than physical possessions. One reason for this is because, as psychologist Sonja Lyubomirsky once noted, “possessions break, but memories keep getting better.”

“In the same way that a family story gets more exaggerated and funny each time Grandpa tells it, memories become more positive as time passes—a phenomenon known as “rosy recollection” (Mitchell et al., 1997).

 

When recalling college, people may fondly remember cherished friends and zany weekend adventures, but not the homesickness or the stress of term papers. When replaying experiences in our mind’s eye, like a zealous movie editor, we often leave the boring and forgettable scenes on Thrift 34 the cutting room floor to produce a more enjoyable flick.

 

But possessions, such as cars and gizmos, just accumulate scratches and dents, until they end up in a junkyard or landfill.”

There’s also an inherent trade-off between spending money on things and experiences. I once tweeted an example of this:

Example of two people who spend the same each month:

Person A
-$800 on rent
-$500 on an amazing trip

Person B
-$1,300 on rent

Both become accustomed to where they live. Only one experiences 12 amazing trips per year.

Both spend the same amount.

— Four Pillar Freedom (@4PillarFreedom) June 27, 2019

The less you spend on recurring lifestyle expenses, the more money you have available to spend on experiences.

Conclusion

Overall, this book was a fun and easy read. Be warned, though, nearly all of the advice given in the book is purely based off Galloway’s own experiences and observations. This isn’t a book that cites controlled studies and experiments dealing with happiness. It’s simply Galloway sharing advice based on what he has personally experienced.

This could be a turn-off for some people, but I viewed the experience of reading this book as similar to sitting down with someone who has been through a lot in life, faced hardships, endured failure, and is simply dishing out some advice based on what they’ve seen works. If you read the book yourself, go into it with an open mind, see what resonates with you, and feel free to discard the rest.

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