You can’t buy happiness — science of balancing wealth with your emotional well-being
Is there a connection between money and happiness? In an exclusive interview, Arthur Brooks, Harvard Professor and Author, Build the Life You Want, sat down with TheStreet to reveal the direct relationship between money and happiness, while offering insights on how to find true fulfillment beyond your bank account.
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Full Video Transcript Below:
CONWAY GITTENS: Arthur, I want to start with this idea of intersectionality, from your vantage point, where does the intersectionality of the drive for wealth and the drive for happiness intersect?
ARTHUR BROOKS: Yeah, well, the problem is not often enough. Biology tells us. Mother nature tells us that if we get these worldly rewards, then we're going to be happy. But it's kind of a trick. So here's the thing. Mother nature really only has two goals for us, which is to survive and pass on our genes. She doesn't care if we're happy. We want to be happy. So we think, look, if I follow these drives to be more successful as a person, then I'm going to be happier. Those drives really take the place and money and power and pleasure and and Fame or the admiration of other people. And then we become frustrated. Why? because we get more, I guess, more competitive in the mating pool, I suppose. But that does not that's not going to lead us to happiness. So I spent a lot of my time helping people understand that happiness is their business and they have to make choices that don't always feel very natural if they're going to get more of it.
CONWAY GITTENS: So what are those choices? Because we're all trying to find that balance between being happy, but also having wealth.
ARTHUR BROOKS: Yeah, I know for sure. And there's nothing wrong with money. On the contrary. I mean, a big capitalist. I believe in the free enterprise system. Wealth and money, the financial resources that we have, that's an intermediary goal. That's something that we want on the way to getting the things that we actually want to do. In other words, it's important to think about why do you want money? Well, because more is better wrong. Why do you want money? People need to actually answer that particular question. What do you want to do that's good in the world? One of the ways to think about this is to not just have a goal of having more, but but wanting less, you know, wanting less of the things that actually won't bring real satisfaction.
One of the ways that I talk about this with people is that, you know, we have this drive to buy stuff. You know, if I get that watch, if I get that suit, if I get that boat, if I get that house, then I'm finally going to be happy. You kind of know that's not true. You know that's not true. But there are ways that you can actually spend money. And the why of your money can take this form that's better for your happiness. For example, buying experiences with people that you love, that's reliable for bringing happiness, buying time and spending it with people that you love, giving your money to causes that you love and saving your money. All of those things actually do bring reliable happiness. Those are the ways to buy happiness.
CONWAY GITTENS: So how do we rewire ourselves? Because, you know, we all say money can't buy you happiness. But somebody else might say, well, let me try this. I'll have fun on the way, on the way of trying to figure it out.
ARTHUR BROOKS: Yeah, Yeah. And the truth of the matter is that people do figure that out. And the people who say money doesn't buy happiness, they tend to have a lot of money. And you say, well, let, let me figure that one out on my own. Let me try that on my own. And you have to do that by making some errors and ideally by not having too much regret. One of the ways that I counsel people to do it who are working very hard, they get a lot of satisfaction from their work and they're very financially successful.
You and I probably have the same friends. As a matter of fact, I have to urge them to fight their biological tendencies, to fill their house with stuff that they buy that second boat. It will not bring the satisfaction that you seek, but rather to spend the resources to have the experiences with the people that they love. You know, people they think that things are permanent and experiences are temporary, it's exactly the reverse. Psychologically, experiences reside in your mind and heart forever. And it's the things that kind of fade away. And I have to help people rewire themselves by making decisions. They don't always feel natural but are always satisfying when they learn how to make them.
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CONWAY GITTENS: So is there a role for financial security in the pursuit of happiness?
ARTHUR BROOKS: There absolutely is. Why? Because financial security per se makes it possible for you to avoid a lot of the sources of unhappiness. And this is one of the mistakes that we often make. We think if I get more financial security, I'll be happier. No, you'll be less unhappy. And the problem is that it doesn't take that much to be financially secure. I mean, it takes more than a few bucks. But the whole point is that when you're able to avoid normal sources of stress, like paying your rent, taking care of your kids, that kind of security, it avoids tons of unhappiness in your life. Then you can actually focus on the things that really matter to you, like spending time with those kids that you're trying to get financial viability to support more reliably.
CONWAY GITTENS: So for a lot of Americans, financial issues are very, very stressful. Yes so in terms of your expertise, what advice do you have in terms of how to deal with that financial stress and have, you know, peace of mind?
ARTHUR BROOKS: Yeah the number one thing that I'll talk about is the mistake that people make, because the biggest source of stress that people make is, is not that there's not enough money, but they make mistakes with their money. Actually, you find and the number one mistake that people make is that they borrow money for consumption, never borrow money to consume. Now, okay, you don't have enough money. You actually need to put groceries on your credit card. I get it. But that's not what we're talking about. Think about the normal sources of avoidable stress that people have is that they want to consume, they want to buy something. They want some stuff in their life and they don't have the means to pay for it yet. So they go into debt for it.
They buy a car that's twice as expensive as the car that they really could afford because it's a nicer car. I'll pay it off, $600 a month for five years. Who cares? No, no, no, no, no, no, no. One year in that car has got dents and you've got four years left on the payments on that car. That's the number one predictor of how your finances can drive down your happiness is borrowing for your own consumption. Credit card debt is horrible for your happiness. You find that car debt is a big problem for your happiness, student debt can kind of go either way because it's sort of like an investment. People have a tendency to go to institutions that are more expensive than they should because they can borrow the money. Wrong reason to go to a particular school. The only kind of debt that can actually raise your happiness is a mortgage, because that's actually better than paying rent because you're getting a little bit of that money into the bank and making progress in the future. Progress brings happiness. Borrowing for consumption is the opposite of progress.
CONWAY GITTENS: So I take it that you might think this new industry of buy now, pay later is actually going to cause us some pain later on?
ARTHUR BROOKS: It's horrible. And what you found is during the Great recession, for example, that credit card debt went way down and now credit card debt is really high again. And this is one of the things that's putting Downward pressure on American happiness. The number one thing you can teach your kids is that it's going to shackle you to be taking out, you know, be paying interest on your credit card. Don't do that if you can't afford it now. And it's a discretionary expense. I'm not talking about food. It's a discretionary expense. Don't buy it now. You'll be much happier as a result.
CONWAY GITTENS: And so what are some of the common myths that you come across when you're dealing with this topic of money and happiness?
ARTHUR BROOKS: The number one is that, you know, people talk about money and happiness. It's actually really money is more related to unhappiness than it is to happiness. And money really can lower your unhappiness, which is one of the most important things that we can do as a society, is to make sure that people have access to the basic services so we can get rid of these normal worries that they have. That's really important. The second thing is that they notice in their lives a lot of young people, for example, when they make money for the first time, that they feel better. And so the result is they chase that feeling for the rest of their lives. Like, I don't know, I made $20,000 a year and it was really under a lot of pressure. And then I made 40 and I felt better. So therefore, if I go to $200,000 to $400,000, I'm going to feel the same. And it doesn't work that way because you're not eliminating the sources of unhappiness in the same way that you were when you were at lower income levels.
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CONWAY GITTENS: So so we talked about two industries already buy now, pay later, and we talked about the credit card industry, social media, right, envy is a big topic in your book. How how do we deal with I guess it's the consumption that's driven by when we see people on Instagram, we want to be like them. We want what they have. We think it's going to make us happy.
ARTHUR BROOKS: Yeah, the reason we think that's going to make us happy is not because of the thing, but because of what it represents. We are a hierarchical, kin based species. Human beings are, you know, we come from these kin based groups where who the alpha is, you know who the rank order of these people are. And how do you know that somebody higher order in the kin and among your kin and your tribe? The answer is they have more stuff. They have more access to resources. So therefore, if we can demonstrate that we have more resources that we need, we're saying that we're higher in the hierarchy and that's really pleasurable or so it seems.
Now, the reason that that's become a lot more of an issue in people's lives is because social media has made it possible for us to consume an impression of people we would never have access to before. You know, I can look at famous movie stars and say, wow, look at the life that they're leading that shows that they're important, that shows that they're high in the hierarchy. I want that. So how am I going to get it? By having enough money to do that. I don't have it right now. I'm going to go borrow. Then I'll be happy. It's not true. It's a trick. It's what's happening from us. And so you've got to protect yourself by saying, look, this medium is it's taken over my brain. It's leading me to have false assumptions and wrongful expectations.
CONWAY GITTENS: But aren't we hard wired that way? I mean, if you think of back in the day, if you saw, you know, another caveman or cave woman with more, you wanted more. I mean, isn't that what war has almost been all about, wanting more, seeing what somebody else has and wanted it. So how do we undo that?
ARTHUR BROOKS: Well, we're not hardwired. We're soft wired. And, you know, the truth is that we have free will as well. That's one of the reasons that I teach happiness at Harvard, because when you have the knowledge, you can change your habits and you can say I'm doing that thing again, I'm doing that crazy thing again. I'm comparing myself to other people because it's the thing I saw on social media. And as soon as you realize that, then you're free. You're really free yourself. Knowledge is power for people when they understand these natural evolved tendencies. It's soft wiring, not hard wiring and knowledge will get you around that soft wiring.
CONWAY GITTENS: So speaking of knowledge, let's wrap it up here. What is your advice? In pursuing well-being and your financial well-being, your emotional well-being and your financial well-being.
ARTHUR BROOKS: So financial well-being has a lot to do with being circumspect about your resources, making sure that you're not going into debt. Making smart choices, deferring your gratification, all the stuff that you talk about that we've learned about. Et cetera. Et cetera. The more important thing to be thinking about, to not forego, not to skimp on ever, is love. That's that's what the human heart really, really wants. And a lot of people are thinking, you know, if I have the money, and I buy the stuff, then I'm going to get more love. Why? Because people are going to be attracted to me and they're really, really going to love me. How many people have I talked to? I can't tell you who they're like, you know, how is my spouse going to love me? I don't know if I bring in a big gazelle, you know?
And how do you bring in a big gazelle here in the New York Stock Exchange? Your portfolio does really well. So I'm going to spend all my time, you know, thinking about that. But what you really want at the end of the day is her love. And that's what you really want. So go for her love, as opposed to actually trying to this intermediate, weird kind of caveman case that's taking you back 250,000 years under the Pleistocene. Do what really matters. Paying attention to her. Cultivate that relationship. Why don't you, instead of spending the 14th hour at the office, why don't you go home and have dinner together and read to her on the sofa tonight? Boy, you're going to get the love you really want.
CONWAY GITTENS: Then then we have Arthur brooks, the romantic Arthur Brooks. He is the writer of Build the Life You Want. Thank you for joining us.
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