Thank you Vivian for the insightful points.

Let me ask you guys this again, does money = happiness?

While some may argue that money can’t buy us happiness, I say otherwise. Money CAN
indeed buy us happiness. Like what Vivian has covered, money gives you the freedom to
live more comfortably. You can live wherever you want, eat whatever you crave, have
whatever you desire, and spend time doing anything you’d rather do without any compromise
whatsoever.
As briefly mentioned by Vivian, money is only able to cover the physiological aspect in the
Maslow’s Hierarchy of Needs. But what about the rest? Does money really not contribute to
the psychological and self-fulfilment needs of the hierarchy?
Psychologists have discovered that there are essentially two types of happiness – extrinsic
and intrinsic. Extrinsic happiness focuses on money, material wealth, image and social status.
Happiness derived from these external sources usually result in a short-lived dopamine spurt,
and the never ending state of wanting more.
Intrinsic happiness on the other hand is derived from following a passion, seeing personal
growth, making the world a better place or having loving relationships with family and
friends. Intrinsic happiness generates a long lasting joy from within, and is a feeling, that
money can’t simply buy.
Or can you?
Maybe if we actually spent our money differently and not the usual way that we do, it could
actually make a difference in how happy we end up.
Michael Norton, a professor at Harvard Business School conducted an experiment where his
team gave out envelopes containing various amounts of money and an instruction. The
instructions either told one group to spend money on themselves, and another on others.
The group that were told to spend money on themselves did what normal people did – bought
themselves jewellery/makeup and got themselves coffee,
whereas the other group that was told to be more prosocial with the money, made charitable
donations, bought other people a gift and even coffee. At the end of the day, he contacted the
people he handed money out to and asked them how happy they were.
People who spent money on others got happier, people who spent money on themselves,
nothing happened. It didn’t make them any less happy, it just didn’t do much for them. So all
in all, from this experiment it shows that what really matters is that you spend it on somebody
else rather than on yourself
The same experiment was conducted on competitive teams – sports and sales. Money was
given to a group and told to spend it on themselves, whereas the other group were told to
spend it on their teammates.
One of the teams told to spend money on their teammates pooled together the money and
bought themselves a piñata, got together and smashed the hell out of the piñata. These teams
engaged in a more prosocial activity that made them bond together, and the end of the
experiment, the teams that spent money on themselves were doing the same as before,
whereas the teams engaged in a prosocial activity ended up doing better sales and winning
more games.
This links back to the intrinsic part of happiness, in which we first realized that money could
not buy.
As long we know how to spend our money and spend it correctly, money can indeed buy us
happiness!
Translator: Sergey Menis Reviewer: Chryssa Takahashi

00:11
I want to talk today about money and happiness,
00:14
which are two things that a lot of us spend a lot of our time thinking about.
00:17
Either trying to earn them or trying to increase them.
00:20
And a lot of us resonate with this phrase,
00:22
so we see it in religions and self-help books,
00:25
that money can't buy happiness.
00:26
And I want to suggest today that in fact that's wrong.
00:30
(Laughter)
00:31
I'm at a business school, so that's what we do. So that's wrong.
00:35
And in fact, it's not so much that money can't buy happiness.
00:40
(Laughter) (Applause)
00:45
It is not so much that money can't buy happiness,
00:47
it's that If you think that, you're just not spending it right.
00:51
So that instead of spending it the way you usually spend it,
00:54
maybe if you spent it differently that might work a little bit better.
00:57
Before I tell you the ways that you can spend it that will make you happier,
01:01
let's think about the ways we usually spend it
01:03
that don't in fact make us happier.
01:05
We had a little natural experiment.
01:07
CNN a little while ago, wrote this interesting article
01:09
on what happens to people when they win the lottery.
01:12
People think when they win the lottery, their lives are going to be amazing.
01:15
This article is about how their lives get ruined.
01:18
So, what happens when people win the lottery:
01:20
1) They spend all the money and go into debt
01:22
2) All of their friends and everyone they've ever met,
01:25
find them and bug them for money.
01:27
It ruins their social relationships in fact.
01:30
They have more debt and worse friendships than they had before they won the lottery.
01:34
What was interesting, people started commenting
01:37
on the article, readers of the thing.
01:39
Instead of talking about how it had made them realize
01:41
money doesn't lead to happiness,
01:43
everyone was saying: "You know what I would do if I won the lottery?",
01:46
fantasizing about what they'd do.
01:48
Here are just two of the ones we saw, that are interesting to think about.
01:52
One person wrote: "When I win I'm going to buy my own little mountain
01:55
and have a little house on top".
01:57
(Laughter)
01:58
Another person wrote:
02:00
"I would fill a bath tub with money and get in the tub
02:02
while smoking a big fat cigar
02:04
and sipping a glass of champagne". This is even worse now.
02:06
"Then I'd have a picture taken and dozens of glossies made.
02:09
Anyone begging for money or trying to extort from me
02:12
would received a copy of the picture and nothing else".
02:14
(Laughter)
02:17
And so many of the comments were exactly of this type.
02:20
Where people got money and in fact it made them antisocial.
02:23
I told you that it ruins people's lives and that their friends bug them,
02:26
it also makes us feel very selfish and we do things only for ourselves.
02:30
Maybe the reason why money doesn't make us happy
02:33
is that we're always spending it on the wrong things.
02:35
In particular, we're always spending it on ourselves.
02:38
And we thought, what would happen
02:39
if we made people spend more money on other people?
02:42
So, instead of being antisocial with your money
02:44
what if you're a bit more prosocial with your money
02:46
and we thought let's make people do it and see what happens.
02:49
Let's have some people do what they usually do
02:51
and spend money on themselves,
02:53
and let's make some people give money away,
02:55
measure their happiness and see if in fact they get happier.
02:58
The first way we did this, on one Vancouver morning,
03:01
we went on a campus at University of British Columbia.
03:03
We approached people and said: "Do you want to be in an experiment?"
03:06
If they said yes, we asked them how happy they were,
03:09
and then we gave them an envelope.
03:10
One of the envelopes had things in it that said:
03:13
"By 5 p.m. today spend this money on yourself".
03:16
We gave some examples of what you can spend it on.
03:19
Other people in the morning got a slip of paper that said
03:21
by 5 p.m. today to spend this money on somebody else.
03:24
Also, inside the envelope was money. We manipulated how much we gave them.
03:29
So, some people got this slip of paper and 5 dollars.
03:31
Some people got the slip of paper and 20 dollars.
03:34
We let them go about their day. They did whatever they wanted to do.
03:38
We found out that they did spend it the way we asked them to.
03:40
We called them up at night and asked:
03:42
"What did you spend it on and how happy do you feel now?"
03:45
Well, these are college undergrads, a lot of what they spent it on for themselves
03:49
was things like earrings and make up. Apparently, some of them were women.
03:52
What about for other people? Very different things.
03:55
One woman said she bought a stuffed animal for her niece.
03:57
People gave money to homeless people.
04:00
Huge effect here of Starbucks.
04:02
(Laughter)
04:05
If you give undergraduates 5 dollars, it looks like coffee to them
04:08
and they run over to Starbucks and spend it as fast as they can.
04:11
Some people bought a coffee for themselves,
04:13
the way they usually would,
04:14
but other people said that they bought a coffee for somebody else.
04:17
So, the very same purchase,
04:18
just targeted towards yourself or towards somebody else.
04:21
What did we find when we called them back at the end of the day?
04:24
People who spent money on others got happier.
04:26
People who spent it on themselves, nothing happened.
04:28
It didn't make them less happy, it just didn't do much for them.
04:31
The other thing we saw, is that the amount of money doesn't matter much.
04:34
So, people thought that 20$ would be way better than 5$.
04:37
In fact, it doesn't matter how much money you spend,
04:40
what really matters is that you spend it on somebody else rather than on yourself.
04:44
We see this again and again when we give people money
04:47
to spend on other people instead of on themselves.
04:49
These are undergraduates in Canada -
04:51
not the world's most representative population.
04:54
They're also fairly wealthy, affluent and all these sorts of things.
04:56
We wanted to see if this holds true everywhere in the world
04:59
or just among wealthy countries.
05:01
So we went to Uganda and ran a very similar experiment.
05:04
Imagine instead of being in Canada, where we would say to people:
05:08
"Name the last time you spent money on yourself or other people?
05:11
Describe it, how happy did it make you?"
05:13
Or in Uganda: "Name the last time you spent money
05:15
on yourself or other people and describe that".
05:17
Then we ask them how happy they are.
05:19
Again, what we see is amazing because there are human universals
05:22
on what you do with your money,
05:24
and real cultural differences on what you do, as well.
05:26
For example, these are some similarities.
05:28
These are two gentlemen from Canada and Uganda.
05:31
Here is one guy from Uganda, who says this.
05:34
We said: "Name a time you spent money on somebody else."
05:37
Men frequently talk about spending money on women, as it turns out.
05:40
He said: "I called a girl I wished to love."
05:43
I think he means romantically love, though it's unclear
05:46
if he means physical love.
05:47
"We went out on a date...".
05:50
At the end he says that he didn't achieve her until now.
05:53
Here is a guy from Canada, very similar thing.
05:56
"I took my girlfriend out for dinner. We went to a movie. We left early.
06:00
Then went back to her room for only cake".
06:04
(Laughter)
06:06
Human universal: you spend money on other people,
06:08
you're being nice to them.
06:10
Maybe you've something in mind, maybe not.
06:11
But then we see these similarities,
06:13
but also extraordinary differences.
06:15
Look at these two. This is a woman from Canada.
06:17
We say: "Name a time when you spent money on somebody else".
06:20
She says: "I bought a present for my mom.
06:22
I drove to the mall, bought a present and gave it to my mom".
06:25
Perfectly nice thing to do. It's good to get gifts for people you know.
06:28
Compare that to this woman from Uganda.
06:31
"I was walking and met a long time friend whose son was sick with malaria.
06:34
They had no money. They went to a clinic and I gave her this money".
06:38
This isn't 10000$, it's the local currency. It is a very small amount of money, in fact.
06:42
Enormously different motivations.
06:45
This is a real medical need, literally a life-saving donation.
06:48
Above, it's just kind of, "I bought a gift for my mother".
06:51
What we see again is that the specific way that you spend on other people
06:55
isn't nearly as important as the fact that you spend on other people
06:58
in order to make yourself happy, which is really quite important.
07:01
You don't have to do amazing things with your money to make yourself happy.
07:06
You can do small trivial things and yet still get benefits from doing this.
07:09
These are only two countries.
07:11
We wanted to go broader and look at every country in the world if we could,
07:14
to see what the relationship is between money and happiness.
07:17
I'll show you a world map in a second. We got data from the Gallup Organization,
07:21
which you know from the political polls that have been happening lately.
07:24
They ask people: "Did you donate money to charity recently?"
07:27
"How happy are you with your life in general?"
07:29
We can see what the relationship is between those two things.
07:32
Are they positively correlated?
07:33
Giving money makes you happy? Or, they're negatively correlated?
07:36
On this map, green means they're positively correlated,
07:38
red means they're negatively correlated.
07:41
You can see the world is crazily green.
07:43
In almost every country in the world, where we have this data,
07:47
people who would give money to charity, are happier than people
07:50
who don't give money to charity.
07:51
I know you're all looking at that red country in the middle.
07:54
I'd be a jerk and not tell you what it is. It's Central African Republic.
07:57
You can make up stories, maybe it's different there for some reason.
08:00
Just below that to the right is Rwanda which is amazingly green.
08:04
So, almost everywhere we look, we see that giving money away
08:06
makes you happier than keeping it for yourself.
08:09
Across the world we see this in your everyday life
08:12
that this is the impact of spending money on others rather than yourself.
08:15
But this is your own everyday life, and sometimes you personal life.
08:18
What about our work life, where we spend all the rest of our time
08:21
when we're not with the people we know.
08:23
We decided to infiltrate companies and do a very similar thing.
08:26
These are sales teams in Belgium. They work in teams,
08:30
they go out and sell to doctors and try to get them to buy drugs.
08:33
We can look at how well they sell things as a function of being a member of a team.
08:38
For some teams we give people some money for themselves,
08:41
and say: "Spend it however you want on yourself".
08:43
Just like we did with the undergrads in Canada.
08:45
But to other teams we say: "Here's 15 euros.
08:47
Spend it on one of your teammates.
08:49
Buy them something as a present and give it to them.
08:52
Now we got teams that spend on themselves
08:54
and we have these prosocial teams who we give money
08:56
to make the team a little better.
08:58
The reason I have a ridiculous pinata there,
09:00
is one of the teams pooled their money and bought a pinata.
09:03
They got together, smashed the pinata and all the candy fell out.
09:06
A very silly and trivial thing to do,
09:07
but think of the difference on the team that didn't do that at all
09:10
that got 15 euro, put it in their pocket, maybe bought themselves a coffee.
09:14
Or teams which had this prosocial experience
09:16
where they all bonded together to buy something and do a group activity.
09:19
What we see is that the teams that are prosocial sell more stuff
09:23
than the teams that only got money for themselves.
09:25
One way to think about it is for every 15 euro
09:28
you give people for themselves,
09:29
they put it in their pocket and don't do anything different than before.
09:32
You don't get any money from that. You actually lose money
09:35
because it doesn't motivate them to perform better.
09:37
But when you give them 15 euro to spend on teammates,
09:39
they do so much better on their teams that you get a huge win
09:42
on investing this kind of money.
09:44
You're probably thinking to yourselves, "This is all fine, but there is a context,
09:47
that is incredibly important for public policy,
09:50
and I can't imagine it would work there."
09:52
Basically, "If he doesn't show me that it works here,
09:54
I don't believe in anything he said."
09:57
What you're all thinking about are dodgeball teams.
09:58
(Laughter)
10:00
This was a huge criticism we got.
10:02
To say "If you can't show a dodgeball team, this is all stupid".
10:05
We went out and found these dodgeball teams and infiltrated them.
10:09
We did the exact same thing as before.
10:12
We give some teams money to spend on themselves.
10:15
Other teams, we give them money to spend on their dodgeball teammates.
10:18
The teams that spend money on themselves,
10:20
were just at the same winning percentages as they were before.
10:23
The teams we give money to spend on each other, they become different teams
10:26
and in fact dominate the league by the time they're done.
10:29
Across all these different contexts: your personal life, your work life,
10:32
and even silly things like intramural sports.
10:34
We see that spending on other people has a bigger return for you
10:37
than spending on yourself.
10:39
So if you think money can't buy happiness, you're not spending it right.
10:43
The implication is not you should buy this product instead of that product
10:47
and that's the way to make yourself happier.
10:49
In fact, you should stop thinking of which product to buy for yourself
10:52
and try giving some of it to other people instead.
10:55
We luckily have an opportunity for you to give money away today.
10:59
If you look on the back your name badge, at the very bottom of your badge -
11:03
look now, as I actually want you to do this later,
11:06
you'll see DonorsChoose.org is a non-profit,
11:09
mainly for public school teachers in low-income schools.
11:12
They post projects, like: "I want to teach Huckleberry Finn to my class
11:16
and we don't have the books"
11:17
or "I want a microscope to teach my students science,
11:19
and we don't have one".
11:21
You and I can go on and buy it for them.
11:22
The teacher writes you a thank you note, the kids write you too,
11:25
sometimes they send you pictures of them using the microscope.
11:28
It is an extraordinary thing.
11:29
That code at the bottom of your name badge is actually a voucher,
11:35
a gift voucher, with free money to donate to charity.
11:38
Go to the website, enter that in.
11:39
I'd encourage you not to just give the money that's on the voucher.
11:43
But actually give some of your own
11:45
and start the process of thinking less about "how can I spend money on myself",
11:50
and more about, "If I've got 5 or 15 dollars,
11:52
what can I do to benefit other people?"
11:55
Because ultimately when you do that,
11:56
you find out you'll benefit yourself much more.
11:57
Thank you.

Some people may argue that money can’t buy us happiness, but I say otherwise.
Let me ask you guys this again, does money = happiness?
The short answer, yes. Having more money gives you the freedom to live more comfortably.
You can live wherever you want, eat whatever you crave, have whatever you desire, and
spend time doing anything you’d rather do without any compromise whatsoever.
>>maslow hierarchy part>>
Or can you?
Psychologists have discovered that there are essentially two types of happiness – extrinsic
and intrinsic. Extrinsic happiness focuses on money, material wealth, image and social status.
Happiness derived from these external sources usually result in a short-lived dopamine spurt,
and the never ending state of wanting more.
Intrinsic happiness on the other hand is derived from following a passion, seeing personal
growth, making the world a better place or having loving relationships with family and
friends. Intrinsic happiness generates a long lasting joy from within, and is a feeling, that
money can’t simply buy.
Money can buy us happiness, we’re just not spending it right.
Maybe if we actually spent our money differently and not the usual way that we do, it could
actually make a difference in how happy we end up.
Michael Norton, a professor at Harvard Business School conducted an experiment where his
team gave out envelopes containing various amounts of money and an instruction. The
instructions either told one group to spend money on themselves, and another on others.
The group that were told to spend money on themselves did what normal people did – bought
themselves jewellery/makeup and got themselves coffee,
whereas the other group that was told to be more prosocial with the money, made charitable
donations, bought other people a gift and even coffee. At the end of the day, he contacted the
people he handed money out to and asked them how happy they were.
People who spent money on others got happier, people who spent money on themselves,
nothing happened. It didn’t make them any less happy, it just didn’t do much for them. So all
in all, from this experiment it shows that what really matters is that you spend it on somebody
else rather than on yourself