Gareth Cook: What is the biggest misconception people have about the relationship between money and happiness?
Michael Norton: One of the things that my coauthor Liz Dunn and I hear again and again when we ask people about money and happiness is a simple phrase: more is better. In general, we all believe that having more money is going to make us happier. And, while it’s true that having more money doesn’t usually make us less happy, it’s also true that simply having more money doesn’t guarantee happiness. After all, most of us have a friend, family member, or coworker who is relatively wealthy who certainly doesn’t strike us as particularly happy.
We suggest that people should stop thinking exclusively about how to get more money, and instead focus more on whether they are getting the most happiness out of the money they already have.
Cook: You write that people should “buy experiences.” Why do you say that? (emphasis mine)
Norton: When we ask people to list all of their expenses in a given month, and then categorize them, it is always striking how much of their budget goes toward buying what we call—using the scientific term—stuff. Gadgets, music, books, lattes, and so on. As it turns out, buying stuff is not bad for our happiness—buying coffees and cars and even houses don’t make us unhappy—but stuff also doesn’t make us any happier.
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