Turns Out You CAN Buy Happiness

I just finished George Dawes Green’s new book, Ravens, about a dysfunctional Southern family, the Boatwrights, who win more than $300 million in the Georgia lottery. Right away, you know that’s bad news, you just don’t know how bad. It turns out to be the Boatwright’s atrocious luck that two grifters—one with a Messiah complex and the other with a sword—are passing through town about the same time the lottery win is announced and decide they want half the fortune for themselves.

Ravens is a good sand and surf read, unless you can’t stand to watch a train barreling down the track for 336 pages wondering which unfortunates are going to get clobbered (on about page 300). It’s also not the kind of book where there’s any great satisfaction; Green creates a bunch of characters so conflicted that by the time the train wreckage is smoldering, there isn’t really anyone left to like.

I stumbled upon Ravens in the New York Times Sunday Book Review and downloaded it on a whim to my Kindle, thinking it would be a story about how enormous wealth makes people enormously miserable. Unfortunately for the Boatwrights, we don’t even get to see the money ruin their lives. (Maybe Green will write the sequel someday.) Still, we know intuitively, or through an occasional story on the nightly newscast, or perhaps in our darkest wishful thinking, that lotteries have a habit of upending lives at least as often as they improve them.

Coincidentally, an article in the Sunday Boston Globe by Drake Bennett, “Happiness: A Buyer’s Guide,” tackles the cherished premise that money can’t buy happiness. It’s more complicated than that, Bennett writes, because “Psychologists and economist have found that while money does matter to your sense of happiness, it doesn’t matter that much. Beyond the point at which people have enough to comfortably feed, clothe, and house themselves, having more money—even a lot more money—makes them only a little bit happier.”

Think about why that might be. Is a little money good because most of us know how to optimize a little money? We’ve had helpful experiences and plenty of practice finding what makes us happy (the boxed set of Arrested Development) and unhappy (the Statue of Liberty with the clock in the middle of her tummy), but in small doses.

Perhaps we just need practice handling large amounts of money, making a few mistakes, and finding out what makes us happy and what doesn’t? Perhaps we just need some advice on which big purchases make rich people happy? As Gertrude Stein said, “Whoever said money can't buy happiness didn't know where to shop.”

This appears to be how the research is trending, especially in the emerging field of positive psychology, the study of what makes people happy. Here are a few take-aways from Bennett’s article:

1. Happiness can be bought, but it happens most often “where the money vanishes but leaves something ineffable it its place.” In other words, money spent on experiences makes you happier than money spent on material goods. “Taking a friend to lunch, it turns out, makes us happier than buying a new outfit. Splurging on a vacation makes us happy in a way that splurging on a car may not.”

2. Likewise, one of the best predictors of happiness is a strong social network; spending money on others is the one thing sure to make us significantly happier. “Money makes you most happy if you don’t spend it on yourself”—not giving it all away, but “just reallocating as little as $5 on a given day can make a difference in happiness.”

The new concept, from folks like Dan Ariely (good TED videos here and here), is “conceptual consumption,” which describes our willingness to spend real money on abstract goods. It helps explain the pay-off we get from a great dinner with a loved one, so much so that we may not want to go back to that restaurant for fear of tarnishing the memory.

3. Merely thinking about money makes us harder working and even more resistant to pain, but more solitary and selfish. Money itself makes it harder for us to spend on the things that make us truly happy. Consequently, we could better align happiness and money if our buying decisions were more straightforward. Instead, we mix up things like status when we shop, making happiness less attainable—that is, a big house satisfies our desire for status for a while, but we’re programmed to be back yearning before too long.

Ultimately, if George Dawes Green ever lets the Boatwrights get their hands on that $300 million lottery prize, they’re going to have a lot to think about. Patsy Boatwright keeps sneaking looks on-line at Malibu beachfront. Maybe, instead (shameless plug alert), giving some of it away to places like the New England Historic Genealogical Society would make her feel better. Maybe writing a check to the Society from her Malibu beachfront home would be the best solution.

See, it’s confusing, this money and happiness thing.

Boxer Joe Louis may have caught the paradox of wealth best when he said: “I don’t like money, but it quiets my nerves.”

Posted by Entrepreneur Generations