By Snježana Ana Billian | Published on February 23, 2021

Money and happiness expert Ken Honda is a best-selling self-development author in Japan, with book sales surpassing seven million copies since 2001. His latest book is called “Happy Money: The Japanese Art of Making Peace with Your Money” (June 4, 2019, Simon & Schuster). Ken studied law at Waseda University in Tokyo and entered the Japanese workforce as a business consultant and investor. Ken’s financial expertise comes from owning and managing several businesses, including an accounting company, a management consulting firm, and a venture capital corporation. His writings bridge the topics of finance and self-help, focusing on creating and generating personal wealth and happiness through deeper self-honesty. Ken provides ongoing support through mentoring programs, business seminars, therapeutic workshops, and correspondence courses.

Ken is the first person from Japan to be voted into the Transformational Leadership Council, a group of personal and professional development leaders. He is fluent in Japanese and English, lived in Boston, Massachusetts, for two years, and currently resides in Tokyo, Japan. Learn more at KenHonda.com.

Your book Happy Money is an international bestseller, and thanks to the concept you share in it, you’ve achieved financial freedom while still in your twenties. Can you let us in on the secret of Happy Money?

There are two kinds of money: Happy Money and Unhappy Money. Happy Money makes you smile when you receive it, whereas Unhappy Money makes you feel irritated.

With Happy Money, you experience joy when you give it away. You know that the money you spend will enrich other people’s lives and then come back to you. In other words, when you have Happy Money, you always feel good—both when you’re giving and receiving.

With Unhappy Money, you feel frustration and worry. It’s the kind of money you begrudgingly spend to pay your bills and taxes. And even when you’re on the receiving end, you don’t feel happy about it. Unhappy Money can come in the form of a salary for a job you don’t like but can’t bring yourself to change, or as alimony after a stressful divorce.

Most of us have experienced feeling anxious about money. What’s the best way to turn Unhappy Money into Happy Money?

First of all, you need to understand that Happy Money is not about how much money you make or have. It’s about the energy with which you give and receive money.

When you receive money, that means that somebody chose you, out of many other people, to be the recipient. For example, if you’re a restaurant owner, they decided to eat at yours, out of so many restaurants. And if you’re a freelancer, they chose you out of all other people offering a similar service. If you’re an employee, out of many potential candidates, your employer picked you.

Therefore, there are millions of reasons for you to appreciate money when you receive it. When a person chooses to pay you, they show you that they trust you. If you can share the same appreciation back to that person, your money becomes happy. When, instead of gratitude, you feel negative emotions around the money you receive, your money becomes unhappy.

Many people work in a job they don’t love, but they are afraid to make a change because they need to feel financially secure. What advice would you give to people who sacrifice their professional fulfillment to provide for their families?

Even though you don’t enjoy your work, you can still appreciate it—because it pays the bills and brings food to the table. That’s a big enough reason to show appreciation for your job. And once you start appreciating your money, it becomes Happy Money.

Also, I think that money can’t give you security, but that security has more to do with your relationships. If you are surrounded by friends who are financially wealthy or financially comfortable and who are willing to help you, you know you can count on them if you run out of money.

Imagine a millionaire without any friends. Now imagine a person with no money, but all his friends are financially comfortable. Who do you think is more financially secure?

If you know that you have enough friends who can support you, or enough business associates who can help you, you don’t have to worry about money. For example, I counted how many friends would be willing to help me if I lost all my money, and I counted more than fifty people.

If I asked all of them to stay with them for one week, I’d end up having support for a whole year. If I didn’t improve my financial situation during that time, I could still go back to my friend number one and repeat the whole cycle.

When you have friends who can support you in emergencies, you don’t need to worry about your financial security. But if you have nobody to help you, you’ll feel insecure even with a million dollars in the bank.

Why do people struggle financially?

The reason why we have financial difficulties is either because we make too little, or because we spend too much. And most of us make little and then spend more than we can afford because we always urge to spend more. We tend to spend money out of stress, anxiety, anger, and frustration.

The other day I had a coaching session with a couple. He said he was spending a lot because he was working hard. She said she was spending money because she deserved it. Either way, they both spend a lot of money. If, as a couple, you’re almost competing against one another, you end up spending more than you earn, and there will be no money left at the end of the month.

You overspend when you treat money as an object and when you associate it with all kinds of rewards. In that case, your urge to spend money comes from the desire to feel better, but what actually happens is that you get into financial struggles, and you end up feeling worse. This has nothing to do with money itself but with your relationship with money.

To be financially wise, do we have to have an in-depth knowledge of the various investment options, such as stocks, bonds, ETFs, and mutual funds?

No. If you know somebody who’s an expert in these asset categories, you don’t have to know everything. For example, I know enough about tax laws, but they change every year. When I need new information about taxes, I call up my brother, a tax accountant. You can always turn to a friend or an expert to ask for advice, and you don’t have to be super-wealthy to do that.

If you’re great at writing, you have to concentrate on writing and wisely choose people who can do all the other things for you. Again, it comes back to relationships: You have to know the right people who can give you the answers about things you should know.

To be financially intelligent, you need to develop a healthy relationship with money. I interviewed many amazing people, and I realized that even the smartest of them make bad decisions around their finances.

There are hedge funds that genius mathematicians and Nobel Prize laureates ran, and they still went bankrupt. And the reason this happens to smart people is they make emotionally bad decisions.

You often make emotional mistakes when you want to get back at somebody, when you feel afraid, or when you’re simply stubborn. On the flip side, when you have money EQ, you have a healthy relationship with money.

The ideal situation is when you become best friends with money. Think about it: If money was your best friend, how would he or she feel about you? When you treat money as your best friend, money is going to help you back.

That’s an interesting way of looking at money. If your money was a person, what kind of character would it have?

My money loves to have fun. It would come to me and say: “Ken, do you want to throw a party? Let’s invite fifty friends and do a barbecue in your backyard. I’m going to take care of everything; you just need to show up at eight o’clock next Friday.” And then it takes care of everything—it organizes who’s going to cook, deliver food, play music, and who’s in charge of the decoration.

When I ask my money how the preparations are proceeding, it says: “Don’t worry, Ken. Everything is ready.” And when I come to the party, it turns out to be perfect because my money took care of everything. If you let money work wonders for you, it will support you and show you how good life is.

Most of us don’t have such a friendly relationship with money. Why is that?

Our relationship with money goes back to our childhood. It’s not only our parents’ fault that we grew up with false beliefs about money. Sometimes our parents themselves were raised in a family or in a culture where there was a lack of money, and they formed beliefs about their financial life that aren’t serving them well.

What can parents do today to help their children develop better beliefs and a healthy relationship with money?

My wife and I taught our daughter that money could do beautiful things for people. Whenever we spent money on something, we told her that the person who received our money could now do fun things with it. And when we enjoyed a nice dinner as a family, we reminded our daughter that we could have such an evening because we had money.

We also taught her that we all need to do what we’re good at in life to make and keep money. The truth is, if we start helping other people with our gifts, we’ll be flooded with money.

I think that if you can raise your child focusing on what they love to contribute to the world, your child will not have to worry about money for the rest of his or her life.

What advice would you give to people who found themselves in financial difficulties due to the COVID-19 pandemic?

We all need to be aware that money comes in cycles—after an economic boom comes recession. In life, when you find yourself in such a cycle and you want to start another one, you have to start giving something to society.

If you can give enough to society, society will give back to you: If you start creating a new business or looking for a new job, your business will provide you with money. And if you don’t do anything, you’re not going to get anything.

We have to cope with the changes we’re experiencing and accept that the flow of money is now different. You need to be flexible because money flows like water. Too much of it will flood you, but too little of it will dry you.

Lastly, how do you see the future of money?

I think that money will become something more like salt. Looking at the history of salt, salt was a precious resource for a long time because it was the only way to preserve food through the winter. That’s why societies knew precisely where their salt came from, how much they had in reserve, and its value in relation to other things.

But when canning, refrigeration, and other food preservation methods came about, salt suddenly became much less critical. Obviously, we still need and use salt, but it’s not crucial for our survival through winter. Today, salt is abundant and inexpensive, and you don’t see anybody fighting over it.

Oil is now what salt used to be because we had no other options for powering our cars, planes, and ships for a long time. But as we’re finding alternatives to the gasoline-fueled engine, eventually, oil will go the way of salt. I think money will go the same way. I’m not saying we’ll live in a world without money. We’ll live in a world free of lack of money.

Once this turmoil gets calmed down, I can see a beautiful world where people will not think about money so much. They will focus more on what they want to do, how they can contribute, and how much fun they have with other people.

In the future, we’ll share all resources equally, and by helping one another, we’re going to create a new world. We have to be mature enough to handle such a world. That means we need to abandon the scarcity mindset that there’s not enough money to go around. Once we know we have enough, we’ll stop fighting over food, water, oil, and other natural resources, and we’ll learn how to share instead. With fair trade, we’re going to have a more peaceful world. It’s going to take some time, but I see it coming.

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