Friday, July 4, 2008

Dollars and sense

I’m not sure when money was invented, but my guess is that it was only about three-fifths of a second later that its inventor figured that it wasn’t going to be the secret to happiness. However, I’m not advocating poverty either. Being poor, as I remember from my childhood, is no fun, but it is a fact that once you and your family are well-fed, educated and sheltered, money takes on a different hue. No one enjoys top-of-the-line gourmet dining in an exotic location more than I do, but I still understand that I can get the same pleasure (and often more so) out of a simple meal at home with my family. So here’s a question about happiness to follow up my last post on the subject: Do money and happiness connect? Ask the academics.

According to a recent study by Professor Michael Norton and his colleagues at Harvard Business School, the answer to that question is “yes”. In science, they argued that the amount of money you earn isn’t as important as the way you spend it. Ok, I think most of us would have had that covered for a win and a place. Their next finding is more interesting. Although most people think that money can buy happiness, it turns out they are in fact happier if they give some of it to someone else. Their research also puts a dollar value on the experience. They reckon that an amount as small as $5 may be enough to up your happiness quotient on a given day. Five bucks can help you have a good day. Now this is exciting. I’ve always believed that we can improve our lives and the lives of other people by personal commitment and combine this individual action with our corporate responsibilities. As I have said before on this blog, it's about and/and.

• Being inspired by corporate social responsibility and through personal involvement.

• Giving money to causes and living in a way that reflects our dreams for the world.

• Making positive change on a global scale and one person at a time, in our own communities.

As Professor Norton and friends have proved, we can buy happiness. We just have to spend it on the right things: other people.

5 comments:

Sophee McPhee said...

As superficial and elitist as it sounds, I too believe that money = happiness (a controversial position to have, especially in the ‘socially democratic’ land of Oz). However, I hold this view because I have been brought up to understand that money = freedom, which (if acted upon) eventually leads to a sense of joy and personal fulfilment. Money is the difference between having to settle for a $5 Domino’s pizza and ‘American Idol’ after a hard day’s labour and having the freedom to take the day off work, hop on a private jet to Milan, enjoy a fresh, authentic pizza in front of the Duomo Cathedral and enjoy a night of operatic bliss at La Scala.

On one hand, I agree that the freedom to give and improve the lives of others is the ultimate joy provided by access to money. However, I challenge Professor Michael Norton’s theory that one needs to spend $5 in order to get a day’s worth of happiness. I shouted a local (and amazingly friendly) homeless person a $3 burger from Hungry Jacks a couple of years ago, and this gesture still makes me feel good about myself to this very day (a tad lame, I know)! However, being a young student, who survived on minimum wage, $3 was a genuine sacrifice for me at the time (i.e. it was my bus ride home). On the other hand, I do not believe that the gift of $5 would make a multibillion dollar business tycoon feel ‘spiritually content’ for a solid 24 hours...it’s all relative.

I also feel the need to challenge Norton’s claim that people inherently enjoy spending money on others more than they do on themselves. If this were true (and it really is a lovely thought), wouldn’t world poverty be a thing of the past? Wouldn’t developed nations have made the decision to ignore existing 3rd world debt and let struggling nations have a clean slate? I truly salute those who see the bigger picture and at least try to equalise their give/take ratio...Bill & Melinda Gates are an inspiration to the corporate sector, government and society at large. Furthermore, they have touched and inspired me personally. Their example will stay with me, as I continue to grow as a budding executive.

Sophee McPhee said...

My equation for happiness:

$$$ = freedom & access = knowledge & personal growth = happiness

Piotr Jakubowski said...

I'd have to agree with Sophee's analogy of the whole thing. While Happiness is not tangible, the way you spend your money brings happiness.

This summer I had the pleasure to go on a family vacation with a friend of mine. Their family rented a yacht in the Greek islands and invited a few of their friends on board. Though most people would be fine with a simple vacation, the family went above and beyond their calling to provide the opportunity for other people.

The availability of money allows people to step out of the so-called rat race.

GIANPAOLO GRAZIOLI said...

Hi Kev and friends, I wrote a post about Happiness a few days ago on my blog. My personal ending quote says: "Happiness comes from the simplest things: It is a smile from another person, a sunshine, a sunset, playing golf, it lies in our habits and in the change of pursuing a remarkable goal and if we don't get it, we still have a lot to be happy about." Depression is happiness worst enemy. And money do not fight depression at all. I would do anything to live without money. And money have failed big time to give us happiness. Short life will have the person ( and the company) who believes that money are the solution. He will be disappointed sooner than. Money is only a tool. Money do not make me happy at all.
In general companies have to make profit so they can continue in their goal to make the world a better place, through, sharing the wealth, innovation and expansion to name a few. Making money is more a responsability to the world than anything else. This is also one of the main point of Giapo's credo. Giapo is my brand new challenge made in New Zealand. We open in Queen St. Auckland and we will produce and sell fresh from the store our home made gelato icecream. Our way to make you happier for the day.

J said...

Great topic.

I don't believe money buys happiness, however, as other readers have stated, it almost certainly buys freedom.

Unfortunately, it can also buy things like better healthcare, education, good home in a good area, mean you don't have rent / mortgage worries etc etc - two things which are an enormous influence on our happiness.

However, I'm not of the belief that buying a Rolex, Bentley etc etc will make anyone 'happy' - more a fleeting sense of enjoyment, which can also be a good thing (?)