As Thanksgiving Day nears, it seems like an especially appropriate time to address a newsflash I spotted recently in a TED video, “How to buy happiness.” This just in: Money can buy happiness, at least according to Harvard Business School researcher Michael Norton.
“In fact,” he said in his video, “if you think that [money can’t buy happiness], you’re actually just not spending it right.”
So what’s the trick? You may already have guessed it: To feel the glow, you’ve first got to share it.
How Generous Giving Brings True Happiness
I’ve long been interested in Positive Psychology – “happiness research,” in layman’s terms. Combining that with my fascination for money management, I think a good portion of my role as a family’s financial advisor may have as much to do with helping people truly enjoy their wealth as it does with helping them successfully bankroll it (although the latter is right up there too.)
So, take it from me, your happiness advisor: To add some joy in your life, consider giving more of it away this holiday season. How much will giddy goodness cost you? Among Professor Norton’s findings in his research: “It doesn’t matter how much money you spend, what really matters is you spend it on somebody else, rather than on yourself.”
Carolyn McRae of Blueleaf (a financial management and reporting solutions provider) recently directed my attention to Professor Norton’s video by featuring it in her own blog post: “Be Different: Help Clients Invest In Their Happiness.” She offered several tips on ways to buy more happiness through creative and generous giving.
One of my favorite, unusual ideas from her blog was for investors to consider “Putting their money toward projects that are not only profitable, but charitable, [which] could result in both financial gains and happiness gains.”
Determine When It Makes Financial Sense to Give Generously and Creatively
Now, not to be too big of a Grinch about it, but first let me emphasize that I’m not suggesting you pile your life savings into one or a few undiversified risky ventures of any sort, no matter how noble they may be. To best help others over the long haul, you must position yourself for continued success as well, so you really should invest the lion’s share of your portfolio in a solid, evidence-based strategy along the lines of the model I shared this summer in my “Household Portfolio Management” post.
But here’s an appetizing idea to digest along with your Thanksgiving turkey (or Tofutti). If you’ve got some discretionary income you were planning to allocate to gifts for yourself or others (i.e., money you can afford to lose entirely if fate doesn’t smile your way), what if you used it to invest in a start-up firm with a socially beneficial mission that is near and dear to your heart?
Involve the Whole Family in Your Holiday Happiness Project
For added oomph, include your children in planning and participating in the venture as well, engaging them in meaningful money memories that may well stand them in good stead for the rest of their lives.
One organization mentioned in Professor Norton’s video is Donor’s Choose. It’s a unique website where teachers ask for classroom items—a microscope or paint for an art project—and donors are kept in touch with how the students use that item. What kid wouldn’t love to see pictures and letters from kids around the world on how their small contribution helped the classroom? Talk about valuable life lessons.
Speaking of our children, my wife and I (and Santa) seem to already have an in-home giving opportunity that should help us feel absolutely fantastic about our money if volume counts for anything.
Our four-year-old son Marcus started his Christmas list in September, and it is already an impressive 23 feet long! That’s no exaggeration — you can see some photographic evidence at right.
Hmmmm. He may need a few more lessons on the subject of it being better to give than to receive. But maybe we’ll go easy on him until after the holidays.
For more information or to set up a consultation, contact Pathway Financial Planning at 248-567-2160 or email firstname.lastname@example.org.