Unless you know how to spend it.
1) Spending money on someone else.
2) Spending money on experiences, rather than possessions.
If you can think of other ways to buy happiness, I'd love to hear about it! Please share in the comments section, below.
Many people fantasize about coming into lots of money... and using it in an antisocial manner. "I'd buy a private island!" "I'd never take public transportation again!" "I'd tell my boss he can go ____ himself!" "I'd buy an expensive car/wardrobe/etc., and make everyone jealous!"
But, weirdly, many people who do come into wealth end up feeling unmotivated, isolated and alone. It's not uncommon for lottery winners say that winning the lottery actually ruined their life.
Which led Harvard Business School professor Michael Norton and two colleagues from the University of British Columbia, Elizabeth Dunn and Lara Aknin to ask, "What if we forced people to spend money in a pro-social manner?"
The resulting paper, "Spending Money on Others Promotes Happiness," appeared in the March 21, 2008 issue of Science. And here's what they found:
Spending as little as $5 on someone other than yourself increases your happiness.
The experiments have been replicated across the globe, from Canada to Uganda. Whether participants used their money to help a friend pay for a lifesaving malaria treatment or to buy a movie ticket or a coffee for a friend, they experienced similar boosts in their mood.
The result held true across three different studies: a nationally representative survey, a field study of windfall spending, and an exploration that randomly assigned participants to spend money on others or themselves.
In other words, you don't need to make a huge donation or buy an expensive gift to feel the benefits of prosocial spending. Small changes in spending habits can produce big boosts in your mood.
To learn more about Dunn and Horton's research, check out their book, Happy Money: The Science of Happier Spending -- even though it's about science research, it's a really fun, funny and insightful read:
You should also focus on buying experiences, not things.
Where this happened:
(Sort of off-topic, but worth mentioning: this trip was also extremely affordable. We spent about $390 each on airfare , $25/person/day onlodging by renting a private studio on Airbnb, $10/person/day on our car rental, $10/person/day on dive gear rentals... and whatever we would have spent on food at home. Or maybe a little less, since we caught our own lobsters for dinner half the nights and made smoothies out of the 7 for $1 papayas we bought at the farmer's market.)
1. Anticipation of an experience drives happiness -- whereas anticipation of a possession drives impatience. Think about people waiting in line for a Hanson concert:
Vs. people waiting in line to buy things on Black Friday:
Humans are social beings. We evolved to be highly sensitive to isolation, rejection and loneliness. We evolved to crave relationships and attachments with each other through shared experiences. Because people who didn't... didn't find mates. They didn't invest in raising offspring. So their genes didn't get passed on, and they don't exist anymore.
Because of that, in many ways, it's actually more "important" for us to experience negative emotions than positive ones -- evolution doesn't care if you're happy if you don't have any babies.
Even jealousy is an evolutionary advantage. If you don't get jealous of your girlfriend with she spends time with other men, she might cheat on you, and you'll raise someone else's kid. If you don't get jealous when other people have more things than you -- if you're perfectly content with what you have -- you might starve and die during the next famine. Or at least have a harder time attracting a mate.
Which leads me to my next point:
3. Most people stop appreciating things over time. Doesn't matter if it's a Tesla or a Versace dress or a nice couch. Over time, it'll make you less and less happy. Think about it -- when you ask someone what one item they would save if their house were on fire... would you expect them to choose their Coach bag, or their photo albums?
It's different, of course, if the thing in question is something intrinsically meaningful to you. If you're a car enthusiast, and you bought a Tesla because it's so incredibly sexy and green and fun to drive, you may grow to love it more over time. But if you bought it as a status symbol, or because that's what people with money do, or for some other extrinsic reason -- if the car itself, and not the experiences you would have in it, is the reward -- then it's not a good investment for your happiness.
This is where a lot of rich people run into problems. They work hard to make money so they can buy things. But the things don't make them happy, and they end up feeling lost and wondering what the big deal was.
Harvard psychologist Daniel Gilbert illustrated this beautifully when he asked study participants if they'd rather have a higher absolute salary that was lower than that of their peers, or a lower absolute salary that was higher than their peers'. Participants were largely unsure.
But. When asked if they'd rather have two weeks of vacation when their peers only got one, or have four weeks of vacation when their peers only got eight... it was a universal no-brainer.
All of this might help explain some of the fascinating results discussed in a recent paper, ‘A Diamond is Forever’ and Other Fairy Tales: The Relationship between Wedding Expenses and Marriage Duration -- in particular, the finding that couples who spend $2,000-$4,000 on the engagement ring are almost twice as likely to divorce as couples who spent $500-$1,999. And that couples who spend more on their honeymoon are happier and last longer than those who spend more on the wedding.
I guess I was on to something when I said that I don't want an engagement ring -- I want a six-month honeymoon.
Got it? Now go buy yourself some happiness!
Go spend $5 or $10 on someone you love. Or even someone you like. Buy someone a smile.
(If you want to be especially thoughtful, you can custom-print postcards on moo.com. It's $9.99 for a 10-pack -- and you'll save 10% if you use my referral link -- and each can have a different photo on the front. I just placed my first order, and am so excited to start sending them out to my grandmas. Is this the best $10 I ever spent? Quite possibly.)
Finally, if you're not into experiences, gifts and postcards, you can always donate to my Patreon campaign. You know -- so The Happy Talent can literally make you happy. (No bias or anything.)