Money and happiness are two things people spend a lot of time thinking about. We’ve also been told that “money can’t buy happiness.” Well, at TEDxCambridge, Michael Norton shares fascinating research on how money can buy happiness — when you don’t spend it on yourself.
The research found that it doesn’t matter how much money you spend; what matters is that you spend it on somebody else rather than yourself. And the specific way you spend money on other people isn’t nearly as important as the fact that you did it in order to make yourself happy. You don’t have to spend vast amounts either. You can do small, seemingly trivial things and still enjoy the benefits.
Research by Dan Gilbert, Harvard University psychology professor and author of Stumbling on Happiness, suggests that buying “moments” is the key i.e. spending your money on experiences rather than material things. Gilbert found that 57% of respondents reported greater happiness from an experiential purchase vs. 34% who said the same about a material one.
At IRC Wealth, we work with clients to increase their earnings, savings, and investments as these are all key to financial independence and a successful future. But it’s also important to take a step back and examine what money means to you and how you spend it. If you’re more aware of how your spending connects to your values, you may realize that money really can buy happiness.
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