This TED video popped into my email this morning (see below). Now, I generally don’t watch every TED talk that pops into my email, but this one happened to be about two things I spend a lot of time thinking about – money & happiness. So I was really pleased when I took 10 minutes to watch the video and agreed with just about everything Michael Norton said. Mainly because it was a nice case of confirmation bias for me. 🙂
But seriously, what Norton discusses is how money does not generally lead to happiness, but if used correctly it can in fact lead to happiness. The interesting part is his approach to using the money one obtains to do this. Generally, we obtain money thinking that it will help us achieve certain goals or solve all of our personal problems. If you can just buy that house you want then you’ll be happy. If you can afford a boat then you’ll be happy. Right? Except that’s almost always wrong.
The interesting thing that Norton points out is that money leads to happiness when it’s used on others. Now, if you’ve been reading here for a while you know that I believe money is a social construct. People who tend to accumulate huge amounts of money are those who have, for whatever reason, provided value to the rest of society. But it’s interesting that Norton finds giving the money away or using it in charitable and social ways is the optimal way to find happiness. Not surprising given that the social construct is best utilized when it’s meeting specific social needs, huh? Of course, this experiment vastly generalized to some degree since happiness is different to different people, but I thought it was pretty interesting nonetheless….
Oh, and the more difficult part (unless you happen to be lucky) is you have to acquire all that money before you can essentially give it away. And that’s the more difficult social part!
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.