How to Buy Happiness with Dr. Arthur Brooks

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I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand.

It's time for some money rehab.

We talk a lot on this show about building wealth, but if we're also not building a life that makes us happy, what's the point?

That's the question my guest today has dedicated his life to answering.

Arthur Brooks is one of the world's leading voices on the science of human happiness.

He's a Harvard professor, best-selling author of Build the Life You Want, which he co-wrote with Oprah herself, casual, and a columnist at The Atlantic, where his How to Build a Life column is basically a masterclass in turning cutting-edge research into real-life tools you can actually use.

His latest book, The Happiness Files, came out in August and hit the New York Times bestseller list.

So he has all of the creds and he is bringing all of his expertise to Money Rehab today to answer the big question: does money actually buy happiness?

And if it doesn't, what does?

Professor Brooks, welcome to Money Rehab.

Hi, Nicole.

Great to be with you.

Thanks for your show, by the way.

Thanks for lifting people up and giving them more prosperous lives.

Well, thank you for saying that.

And thank you for helping people become happier and have happier lives.

That's the idea.

And a lot of the time, actually, financial stability goes along with being a happier person.

So this is a match made in heaven, I think.

It is absolutely that.

You're a happiness expert.

I'm a money expert.

The big question that we have to start with is, does money buy happiness?

Yeah.

I mean, grandma said it didn't, but the truth is a lot more complicated than that.

We've been looking at studies for years and years from economists that say, how much is enough?

And that's just the wrong question.

So you can find studies that say that $75,000 is where happiness kind of it levels off.

And oh, no, it's $250,000.

Wrong set of questions.

The right set of questions are, number one, what are you trying to do with your money?

Why are you earning it?

And how do you spend it?

Those are the right questions you need to ask.

And there's a whole class of people that they want to make money.

I mean, not just enough, they want to make as much as they can because they want to feel important.

They want to prove something to themselves, or they want to prove something to other people.

And as long as those are your motives for earning money, you're never going to find happiness.

You're never going to have enough, as a matter of fact.

You're going to be chasing that for the rest of your life.

So, that right out of the way, if you're trying to be a big shot by earning as much money as possible, you'll never have as much money as you need.

So much there to dig into.

Love to double click on all of those questions.

But first, gun to your head, does money buy happiness?

Yeah.

So money buys happiness when you spend it the right way.

Number one, when you buy stuff, Now, there's stuff that you need because you're trying to pay your rent or get your groceries.

That's not what I'm talking about.

When you're buying your fifth watch or the nicer car, no, it just doesn't.

It gives you momentary joy to have that that stuff.

There are four ways that you can spend your money to actually buy happiness.

Number one is to buy experiences and spend them with people that you love quietly, not posting the experience on social media.

Super important.

The second is to buy time, to pay people to do things that you don't want to do, but only if you use the time in personally edifying and growth-based experiences for yourself.

In other words, pay somebody to cut your lawn, but then don't waste the time scrolling social media.

The third way to buy happiness is by giving your money away to something you're really passionate about.

And the fourth is to save your money.

I have tons of data on this.

I'm an economist too.

And I've been looking at this for years.

It turns out the best way to become unhappier with money is by borrowing it for consumer expenditures.

Running a credit card balance is the stupidest thing you can do for happiness.

But one of the greatest things you can do for happiness is actually saving for the future because you feel like you're making progress in your life.

Those are the four ways to do it.

I love that too, because it also makes you feel like you're taking care of yourself financially.

It's like financial self-care.

Yeah, absolutely.

Financial help.

Yeah, for sure.

You know, when my kids were little and I was an assistant professor at a university, I wasn't making very much money and starting to get ahead a little bit and put something away for the future.

I remember setting up a 529 account for my oldest son and I felt like I was making progress in life and making progress for my family.

And that felt really good.

And if I'd taken out a credit card balance to take the family to Cancun or something like that, that would have been haunting me afterward.

You mentioned the study briefly that $75,000, I think it was at the time that this came out, would

buy you well-being, essentially.

Yeah.

Really talking about that certain dollar amount.

I think if you extrapolate that with inflation, it's more like $112,000.

Oh, okay, Mr.

Economist.

So $112,000 compared to the $75,000 when the study came out.

So basically, it's saying if you have $112,000, you and Kim Kardashian have the same level of happiness.

Is that what it tells you?

No, I mean, that's kind of how people interpret it.

What it does tell you is how much money in the average place in the United States, and there's no average place, and I'm sorry, 112,000 is very different in Wichita than it is in New York for sure.

But there's some base number.

It won't buy you happiness.

What it will do is it will help you.

get away from the sources of your unhappiness.

And that's really how to think about it, having enough money to eliminate sources of unhappiness in your your life.

And that means not freaking out about the rent every month, not freaking out about getting groceries, making sure that you have proper health care.

And that's really what it does.

And one of the problems that we have cognitively, this is what I do as a behavioral scientist.

I ask people why they think that going from $750,000 to $850,000 a year is going to bring them happiness.

It starts with a pattern from when they were in young adulthood and making very little money.

And they noticed that when they went up by $25,000 or $50,000, that they felt a lot better.

But what it was doing was it was eliminating unhappiness, not bringing happiness.

And you can't tell that in your head.

That just feels better.

I remember this when I was 19 and I unceremoniously was asked to leave college for not doing the work.

And I went on the road as a musician.

I was a classical musician, but I was making really, really little money.

I went six years without health care because I didn't have any money.

And I didn't go to the dentist one time for six years.

And I needed to go to the dentist.

When I was 25, I took a job in a symphony orchestra in Spain.

And the first thing I did, my first check is I I went to the dentist, and they filled 12 cavities.

And I mean, let's be honest, I didn't go one day during that period without cigarettes.

So priorities, right?

But the point is, at 25, I concluded that because I had more money, that money bought happiness, but it didn't.

It lowered the source of unhappiness.

And that's a very important thing.

And people will chase that feeling for the rest of their lives.

So it.

helped you get out of pain of cavities, but

that was the extent of it.

It was just, it was eliminating sources of unhappiness.

And that worked up to some relatively modest level of income.

And then after that, you're not eliminating sources of unhappiness anymore.

You're just looking for that feeling.

And so that's when you need to use excess income, not for anything else except buying experiences, buying time, giving money away, and saving your money.

That's really when excess money is going to bring you the greatest happiness after that point.

I mean, I love really breaking it down into those four tangible things.

Some people will say that the hamburger you and I buy is the same one that Jeff Bezos buys.

So at some point, there's diminishing returns.

What about when we get into the millions or billions?

Well, those are pretty small deltas.

And those differences in the quality of experiences, there's no evidence that they have huge amounts of impact.

I mean, flying first class on Emirates to Dubai versus being on a private plane, it's a marginally different experience, but it's a huge difference in how much it costs.

It costs $300,000 private, and it costs you $15,000 and first class.

And that's a slight difference, I have to say, but the difference in cost is so vast that it doesn't compensate for what it's actually getting you.

The ROI isn't there.

It's not there.

It's not there under any real circumstances.

Now, if you've got all this extra cash because you've been doing so well in your career, which this tiny fraction of the population does, most listeners, they're strivers, they're working hard, they're seeing success.

This is why they're listening to the show, but they're not worth $50 billion.

And so it's kind of out of the realm of possibility.

There's some more work right now around having a few million dollars.

I mean, there's debate about whether or not 1 million or 2, 3 million is the same as what 1 million used to feel like.

But at some point, you really like once you get there and once you feel like you're comfortable and the amount that your money is making you and you can live off that, there's not a huge, huge upside to

making 10 million or 20 or 100.

That's true.

I mean, there's a lot lot of evidence to that effect, but people keep doing that.

And so I've done a lot of work on the psychology of why people keep earning more and more.

Now, some of them are entrepreneurs and they're not trying to earn more.

They just love what they do and the money comes incidentally.

And that's a blessed position to be in.

I mean, the truth is I wake up every day and I can't believe that people are going to pay me to talk about the science of happiness.

It's just, it's like, Nicole, it's the craziest thing I've ever heard.

It's like a loophole in the time space continuum that I get to do this for a living.

I'm not thinking about the the money at all, but you know, the money comes in and I'm comfortable and I take care of my family.

It's really, really great.

And there are people like, I mean, I've met Jeff Bezos.

He really loves what he does is the whole point.

And he would do it for less or do it for more.

And it's really not that.

The way to think about that in your career is if somebody were to double your salary.

and you're already working to the max or somebody would take away 10% of your salary and you actually wouldn't work less.

It means you're in a pretty good space.

It means that's kind of a good test for thinking about it.

So

then there's another class of people that will keep killing it over and over and over again.

And there's kind of a pathology that I find.

A lot of people who are hard charging strivers, ambitious people, they have a childhood that kind of looks like this, where my mom and dad didn't give me a lot of attention and affection unless I brought home really good report cards.

And unless I made the baseball team or got first chair in the orchestra, you know, there's a lot of people where the parents were in poverty and sacrificed a lot for their kids, and they're not taking any nonsense for their kids.

And so they kind of dole out the love on the basis of accomplishments.

Well, that wires a kid's brain.

That leads to what we call in my business, the success addiction.

That leads to workaholism.

Why?

Because you spend the rest of your life trying to earn everybody's love.

And so I know people who have $20, $30 million in the bank and are still trying to bring home a lot.

because they want their family's love.

They want their family's admiration.

They're trying to earn it.

And you can't earn love.

Love is a free gift, freely given.

I have a close friend, somebody who's very successful in the financial industries.

And I asked him, before you were rich, he's authentically rich.

What did you think was going to happen if you got rich?

And he said, he thought about it.

And he said,

I thought my wife would love me.

And I looked at his left hand and he wasn't wearing a ring.

And I'm like, so what happened?

And he said, she didn't.

Wow.

Because you can't buy her love.

You can't.

On the contrary, it cheapens the whole thing.

Love is an intrinsic thing.

Money's an extrinsic thing.

You try to buy the intrinsic, beautiful things in life with the extrinsic, grubby things like green pieces of paper.

You just told your wife that her love is worth money.

And she's not going to respond very well to that.

No, she's not.

She's a good person.

It's like, you're not going to stay married that long to somebody who actually will say, yeah, you can buy my love anyway.

I mean, what you said really cut deep because I think that any idea of a happiness plateau with 112 grand or 2 million or whatever it is, I think is really complicated for people like me with extreme money trauma.

Money was a huge source of stress in my childhood.

I've never felt like I had enough, no matter how much is in my bank account.

It's only gotten worse, by the way.

I'm in LA and I lost my home and our offices after the LA fires, which has just exacerbated this idea of having enough.

I mean, I'll ask for myself, like, how do you think people, how do I get over something like that?

It's hard.

And so were you raised in poverty?

I saw my house foreclosed on when I was a kid.

So that's really colored the way I look at home ownership.

I bailed my mother out of jail using cash under the sink behind the maxi pads.

So like it cuts pretty, pretty deep.

Traumatic experiences around your financial security are always going to hurt a lot more than other people.

And what that requires is actually a serious self-examination about what your motives are for why you're earning your money.

And what's funny because a lot of people go through life not questioning what they do, not questioning why they feel the way that they do.

But we all have trauma, and trauma doesn't define us.

What defines us is what we decide to do with our lives.

We're very self-creating creatures.

Only humans can do this.

I mean,

a shelter dog, if it got kicked a lot by its first owner, is going to be a really problematic pet.

But people get over all kinds of stuff.

I'm married to somebody who broke in family and grew up in real poverty.

I mean, sometimes the lights would go out.

Oh, the electric bill.

I mean, that kind of thing.

And she's fine.

It's like I'm weirder about money than she is.

And I come from like this lower middle class home.

But for some reason, my problem is I'm that guy who's trying to earn everything all the time.

My problem is I'm trying to earn everybody's love all the time.

Am I lovable yet?

Because I was like that kid.

I was that kid.

And she wasn't like that.

And so people have different issues on that.

And the way that we get over these things is by paying attention to what these things are and thinking about what our roots are and being conscious and being mindful about the person that we actually want to be.

Then we find that we have enough.

Now, having enough is scary too.

I mean, that's a different thing.

You know, I'll say to my students, I teach MBA students at Harvard.

These are going to be the masters of the universe.

And I mean, the average starting salary coming out of our MBA program, I think, is $210,000 a year, which is pretty good.

That's pretty good money for somebody who's in their 20s.

And I'll say to them on the first day of class: the world tells you that to be happy,

you just need to get really successful.

Money, power, fame.

And then you'll automatically be happy, but that's wrong.

On the contrary, that leads to unhappiness.

Here's the right path.

Do the things that you need to live a happy life, and then you'll be successful enough.

And that makes them even more insecure because of one word that I just said, Nicole.

Which one was it?

Enough.

See, strivers hate that word because they don't believe it.

They don't believe it because they've never seen it.

And for sure, enough is your problem.

Enough is your problem for a bunch of different things.

And learning the meaning of enough in your personhood, in your heart, and what it means to be a person with a soul and not a walking paycheck, then you can actually start understanding what enough means and your love relationships and your life and your spiritual life and all the things that you need to be the complete person that you deserve to be.

Hold on to your wallets.

Money rehab will be right back.

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And now for some more money rehab.

And as you think through what that definition looks like for you, would you advise not to put a number on it?

Yeah.

I mean, there are goals, but what you find is that the hard-charging, striving people, they get their number, but then the number just keeps changing for a couple of different reasons.

Number one is because what they need to do to live the life that they want continues to expand.

But the other is that they become more and more insecure.

When you have that number, you become more insecure about what could actually happen.

Then you start to hoard.

Then you start to be like the person who's got a bunch of gold and they're hiring more and more security because the more gold you have, the more catastrophic the loss if something actually happens to it.

And then the classic thing is checking your portfolio every day.

If you're checking your portfolio every day, something's wrong.

You're way too motivated by fear.

You just are.

And when the market is going down, you're like, oh, man, this is a crummy day.

And you're listening to CNBC the whole day and checking the Wall Street Journal of the ticker.

That's a problem.

That means you've become very fear motivated and you're fear motivated about loss.

And that's a big problem.

That's not a great way to live.

I mean, I see it all the time when it comes to people who struggle with this, what you call arrival fallacy that you keep changing the goalposts.

Can you?

talk to me about why we do that?

I mean, I've done it for my entire life and career.

I think I'll I'll be happy when I get there or I'll be happy when I get to a certain amount of money.

And I get there and I'm not happy.

To begin with, there's one misconception that we all make is thinking that Mother Nature somehow wants us to be happy.

Mother Nature couldn't care less if we're happy.

Mother Nature has two goals for Nicole and Arthur, and they're very simple, survive and pass on your genes.

And so we do all kinds of stuff to survive and pass on our genes.

It's just men,

resource acquisition, status, and ambition, peacocking, they're all about gene propagation because those are the number one things in relationships that women are looking for.

And even men who've been married for a super long time keep peacocking those things because they have this natural proclivity to do that in the same way that women with fertility cues.

It's the same thing that they do because we're Homo sapiens out of the ancestral environment is the way that this whole thing works.

And so it's important to understand that mother nature has this big, big, big pressure.

It's like we're in a vice of these things, but we don't just have animal inclinations.

We also have moral moral aspirations.

We have a divine nature to us.

We have an unbelievably complex prefrontal cortex that makes it possible for us to do things way, way out of our instinct.

I mean, your dog has a little wafer-thin prefrontal cortex and is instinctively based, can't get out of the instincts.

But you and I, we can do all kinds of things that go against our natural tendencies.

And one of those things that we need to do is to understand our own disordered motivations when it comes to, for example, money.

The arrival fallacy that you just referred to is is this idea that since making progress is so satisfying, the best thing in life is actually going to be arriving at the goal.

You know, and we need goals.

Goals are the essence of purpose and purpose is part of the meaning in life.

You can't go 10 minutes as a happy person if you don't know the meaning of your life.

And so you have to set goals and direction.

If you're a sailor, you have to know where you're going and you have a straight line to get there.

But the truth of the matter is that you have to be somewhat detached from the actual arrival or you're going to be really unhappy because you're not going to be permanently joyful when you hit that.

Joy, like all other emotions, doesn't exist to give you a good day.

It exists to say, good job, now go do another thing, which is why people keep running and running and running.

And the first thing that a billionaire says upon earning a billion dollars is, oh, I guess I need another billion if I'm going to permanently feel this thing.

That fallacy of thinking when you arrive is going to be so great leads to huge amounts of dysregulated pathology in humans.

You'll find, for example, that diets don't work.

And the reason is because when people hit their dieting goal, which is you can do it with almost any diet.

I mean, you'll drop weight with any diet, but your reward is never getting to eat what you like ever again for the rest of your life.

Congratulations on arriving at your goal, which is why 30% of dieters wind up in an eating disorder because they want to keep getting the satisfaction that comes from the daily progress, not the ultimate progress of hitting the number.

And the same thing is true with money.

Once I finally hit that numerical goal, then I'm finally going to feel permanently secure.

No, you're not.

I'm going to feel permanently worthwhile.

Sorry.

People are going to love me, not because of that.

And then when they do, they say, I guess I needed more.

And then they run some more.

That's called the hedonic treadmill.

Yeah, it's a dopamine cage match, I think.

And people get there sooner than they think.

And then the question is, what is my life all about?

And your life is about love.

That's what your life is about.

It's not about winning.

It's about loving.

So we need to set goals for our life.

You talked about needing that destination.

We can't just jump in a car and or an Uber and say, take me to the party.

You need to know exactly where you're going to reverse engineer.

So how do we look at goals to try and reverse engineer happiness?

How should we be looking at making them differently?

So

this is a complicated question, but there is an answer to that.

There are intermediate goals and then there are final goals that you want.

The final goals should not be revolving around money and power and pleasure and fame.

Those can only ever be intermediate goals if you want to be a happy person.

And in point of fact, when your final goals are financial or influence over other people or feeling good or the admiration of others, those are idols.

And those are the things that always wind up making you less happy and make you do the things that you usually regret in the end.

Now, the goals that we need to be looking for are faith or spirituality or philosophy in life.

They're family relationships.

They revolve around friendship and they revolve around serving other people with our work.

Those are the ultimate goals that really matter.

And if you can use those intermediate things toward those ultimate goals, you're happier.

So one of the things that I do to get people on the right track, let's teach somebody a nice little technique for doing that.

Okay.

Now, you don't have to be rich rich to do this.

You just have to know yourself a little bit.

I make my students play this game.

It's a little game called What's My Idol?

Because if you know which is your idol, you will avoid a whole lot of grief in your life.

You won't avoid all mistakes, but you'll know that you're chasing something that is the wrong thing.

Nicole, you want to play What's My Idol?

Yes.

Right.

Now, I think you can guess much.

Well, I don't know.

I mean, maybe or maybe not.

So to play What's My Idol,

and this, by the way, this comes from Aristotle, and it was really put together after Aristotle by Thomas Aquinas, the greatest philosopher of the Middle Ages, who's an unbelievable behavioral scientist.

I mean, it's like way before any of us had any data.

But he said people want bliss, they want happiness, but they'll settle for things that have these bliss-like characteristics, but they never really satisfy.

And there's four, money, power, pleasure, and fame.

And fame means prestige or admiration or whatever it happens to be.

It doesn't have to be like Kardashian famous, okay?

Internet famous.

And we all like them all, by the way, but one of them really attracts you and me too.

To figure out exactly what that is, you might be surprised.

Let's eliminate the ones that it's not.

And so we're going to eliminate them one by one.

And when I do the elimination, this doesn't mean that you don't have it at all.

So if you say, a lot of people will be like, yeah, money's not my idol.

That doesn't mean that you become poor.

It means you're just an average person.

Okay.

And if it's your idol, average ain't good enough, as you know.

Okay.

So think about the four, money, power, which means influence over.

It's not like becoming a dictator, feeling good or having comfort, which is pleasure, or the admiration of other people.

Which one do you get rid of first?

Which one attracts you the least, Nicole?

I think for me, it's in.

descending order.

So I would get rid of fame first.

You get rid of fame, which is the admiration of other people.

So if nobody, the average person is not known by more than a handful of family and friends, and you could live with that.

I mean,

for sure.

But, you know, I'd have to question that because you're a really well-known podcaster.

You're actually a public person.

I promise you, I'm sure that people recognize you in the airport and they say, oh, I love your show.

It's really not a motivator for me.

All right.

I believe you.

Okay.

We got three left, which is money, power, and pleasure.

Feeling good what do you get rid of next i think i get rid of pleasure okay so you like to feel good what about you by the way well we're not me yet i'll do me but we haven't gotten to we haven't finished this exercise yet nicole and so okay i believe you too because you work hard i'm a masochist yeah you're not sleeping in is my guess i mean my guess is you've got rigorous protocols so now money and influence money and influence which one do you get rid of next influence or power yeah

and so now we know and maybe that's predictable but maybe it isn't Maybe it isn't predictable because it could have gone a lot of different ways.

But what that means now is that

you give people a lot of great advice and you help them an awful lot, but you have to be careful because you're kind of like a wine sommalier.

You have a lot of information that you can dispense about the best kind of wine, but it's very easy for you to like wine a little bit too much.

And if you like that wine a little bit too much when you're feeling weak, then you'll, you will accumulate it.

You will think about about it too much.

And when you think about it a little too much, it's going to crowd out the things that you really should be caring about, which is your soul and your family and the love of your friends and the way that you're really, really trying to serve the world.

And that can become a problem.

I'm not saying it is, but that's the thing to actually watch for.

And that's how you can avoid some of the sorrows that actually creep into people's lives.

I'll do me.

I mean, I would get rid of power first.

I'm a university professor.

I mean, I hate power.

That's That's why, I mean, it's like, you don't want a boss, go teach college.

It's great.

Right.

And I used to be a CEO.

I was a CEO.

And for 11 years, I was running a company, had hundreds of employees.

I had to raise millions and millions of dollars every year.

And the thing I hated about it the most is when people called me boss.

It felt passive aggressive because I hate having power over other people and I hate people having power over me.

I hate it.

I'm a natural kind of libertarian type.

Right.

So second, I'd get rid of money, actually, because I figured out I'm way older than you.

I'm 61.

And I figured out because I've had, I've been really blessed.

Things have gone really well for me economically.

And there's nothing I care about that much that isn't a huge hassle that I would get.

I mean, it's like, I don't have a second house.

I don't even want a first house.

What a pain.

It's like, the pool guy.

And it's like, no, I hate it.

It's just, it's like a huge distraction for me.

The idea of having a boat, I have data on boats, Nicole.

I mean, the only happy day with a boat is the day you sell it.

So I just don't like stuff.

Third, I would get rid of pleasure.

I mean, I'm very austere in the way that I live, but, you know, I like feeling good, but I can do kind of without it.

But that leaves the thing that I really want.

I want people to like me.

I'm a pleaser.

It's a big problem.

It's a weakness of mine that I want people to think I'm smart and I want people to think I'm clever and that whole thing.

And that's a real weakness for me because as a public educator, somebody in in the public sphere talking about this stuff, it's very easy for me to cut corners so that people will like me more, as opposed to saying the truth all the time.

And so, that's what I have to pay attention to.

And knowing my idol has really made me much better at what I do, even sometimes at the cost of the popularity that might have.

But that's the bargain I need to make.

Hold on to your wallets.

Money rehab will be right back.

And now for some more money rehab.

So, we all have one.

If you pull the thread and somebody says, okay, well, by the process of elimination, mine is pleasure.

Right.

What do you do with that?

You watch your own habits.

Then you're really, really conscious of it.

When you know that you have a particular weakness, then you're conscious of it and you're paying attention to it.

And you won't give into it by accident.

You will give into it in your weakest moments.

But I know people, for example, where their idol really is comfort.

It really is sleeping in.

It really is having that fourth glass of wine.

It really is that, I just want to feel good.

I want to have that huge slice of cake or whatever it happens to be.

And when they recognize that that's what they do when they're in a weak place.

they have a ton of power, then they've moved those sensations from the limbic system of their brain, this ancient console of tissue that governs your emotions, to the prefrontal cortex where you can make these decisions that go beyond your animal instincts.

Knowledge is power.

It's so unbelievable.

I mean, you talk about this a lot because you do money.

I mean, you talk to people about the more knowledge you have about your money, the more power you have in your life.

That's just the fact that money management is self-management.

That's a critical point.

And it's the same thing with emotional management.

Emotional management or governing your tendencies because you're aware of them.

It's self-management.

That's a good secret to happiness.

So idol and weakness, you think are synonymous?

Yeah, no, your idols and your weaknesses are related to each other.

Your idols are only your weaknesses when you give into them is the way that this works.

They're natural things that attract you and that won't lead you to be the person that you want to be.

And when you're weak, you give in is what it comes down to.

And when you know, you give in less.

That's a very beautiful place to be in your life.

I think being aware of what those things are, we all have them and speaking truth to what makes you who you are is so important in this journey for all of us as we're evaluating our goals.

You say that people should ask three questions of themselves when they're doing this as well.

So the first question is, are you enjoying this journey?

Right.

And that's not the same thing as, are you feeling good right now?

Because pleasure and enjoyment are different.

Enjoyment is something that is very conscious.

It is something that has pleasure in it, but it really is.

also adds people and memory.

And so on the journey of what you're doing in your job, in your marriage, in your life, in what you're doing over the course of your day, if you're not enjoying it, that's the first strike against your happiness.

Now, not all the time, by the way.

There's lots of things that I don't enjoy that I still do.

But in general, do you get enjoyment from the things that you're actually doing and that you're programmed and committed to doing?

That's the first question.

And what if the answer is no?

If the answer is no, then you need to be thinking about making a change is the way that this works.

If chronically the answer is no.

Now, again, it's not all the time.

I love what I do.

do i drove to my my podcast studio today and i live in northern virginia and the traffic's crummy and i didn't enjoy all the traffic that i was getting here but i'm enjoying this this is awesome is the way that it comes down to so it's you know prudential judgment you're not going to get 100 enjoyment you have to be an adult about all these things but if in general you're doing something for a bunch of money that you don't enjoy at all that's a big problem i talk to people a lot that they come out of business school and they work in investment banking and they don't enjoy it.

It's 110 hours a week.

They don't enjoy it.

They find their work not very interesting.

Again, some people love it, but not everybody.

And they're saying, well, I'm going to go through this period just for the first 15 years of my career.

It's like, no, don't make that decision.

Look, we're not a feudal society where you have no choice but to pick turnips out of the mud.

This is America.

I mean, we've made a lot of progress economically so that you have more choice.

Exert the choice such that you're not making that enjoyment decision, the incorrect enjoyment decision.

Yeah.

And also, you don't know if you'll have 15 years.

You don't know.

You don't know.

It's like the Bible says: the man who stores up all his crops and builds bigger barns so he can enjoy the rest of his life.

And God comes to him that night and said, You fool, tonight your life will be taken from you.

I always love that.

God says, You fool.

And the second question is: Do you like pie?

You have to explain.

Yeah.

So there's an old joke, you know, what's first place in a pie eating contest?

And the answer is pie.

So I hope you like pie.

There are tons of people in a pie eating contest and they're like, pie is gross, but they're just trying to win the pie eating contest as if some sort of innate satisfaction will come from that.

They don't really care that much, except the bragging rights of having won a pie eating contest.

And it's crazy what the actual trophies are.

You know, I walk into people's offices all the time and they got kind of the wall of trophies of themselves meeting the Pope and meeting the president.

And you look at the photo and their hair is always a different color because they were so much younger and they're still living in the past.

It's just depressing is the way that that works.

I'm scared of what you think of my background right now.

I can't see it exactly.

Oh, you got trophies back there, don't you?

I mean, you have a chapter in your book, The Happiness Files, that's called You Might Want to Toss Out Your Trophies.

Yeah.

Have Webby right there.

Congratulations, by the way.

But by the way, no, you shouldn't, because actually this is a web show that you've got.

And so this is credibility for your show.

What you shouldn't do is after the camera is off, go back there and polish it and admire it.

I definitely don't do that.

Okay.

So you have to like the thing that you're working for because once you get it, you're going to get more of it.

So if you're working toward money, the reward of getting money is more money.

That's right.

That's exactly right.

Once you get really good at money, money really comes is the whole thing.

And so the process of earning it really has to be important.

And then there has to be some something that you can do that brings you satisfaction and meaning with it.

And that means faith, family, friends, and work that serves other people, not the money itself.

Okay.

And the third one is, can you take one step at a time?

This ties into the research that shows small achievements tend to start the cycle of success and happiness more than infrequent big achievements.

That's right.

It's really important to be here now.

That great old book by ram das that hippie manual from the 60s and 70s that said it was what introduced people the idea of mindfulness and entrepreneurial people aka the entire audience for your show they live in the future a lot this is one of the secrets to the success of entrepreneurs the average person spends 30 to 50 percent of their time thinking about the future the average entrepreneur spends 80 percent of their time thinking about the future and that means you're missing a lot of your life There's a great book by the Vietnamese Buddhist monk, Thich Nhat Hanh.

It's called The Miracle of Mindfulness.

Everybody should read it.

My guess is you'll throw it into the show notes.

And the miracle of mindfulness starts with this little description of washing the dishes.

Where this Buddhist monk says, if when you're washing the dishes, you should be thinking about washing the dishes, because if you don't think about washing the dishes when you're washing the dishes, you'll be missing your life.

The whole idea of visiting your castles in the sky, and that means living your life.

I mean, again, you're going to live in the future.

I'm not saying you shouldn't, because if you can't, then you'll make all kinds of dumb errors.

And that's no way to live either.

But you have to spend more time going from moment to moment in your life.

I mean, when you're with your beloved, don't be not with your beloved because you're thinking about your work tomorrow.

That's a huge waste.

And I've done this so many times, Nicole.

I mean, it's like, I know what I'm talking about here because I'm like case study and doing it wrong.

When I was the CEO of this company, I would be thinking about this big deal I was going to do the next day and it was going to be a $50 million thing or build this home building.

And I'm with my little kids.

And my kids are like, why isn't dad paying attention?

Because I wasn't living life from moment to moment.

I was living life from year to year and decade to decade.

And there were years and decades in the future.

And I wasn't there now.

And I missed a lot of life.

And I think a lot of the mindfulness practices can be applied to money.

And we don't often make that linkage.

And I think it's really important.

There's, you know, so much being discussed about mindful eating, mindful this, mindful that.

But like when you're actually in touch with what you're doing with your money, how you're thinking about it, a lot of people in business, as you mentioned, entrepreneurs will start out and say, my goal is to make a million dollars.

But, you know, it might take a long time to get there.

So that puts off this feeling of satisfaction unless you make these bridge goals, right?

10 grand, 100 grand, these baby steps to a million.

Think about this.

You remember everybody's read or heard about the book, How to Win Friends and Influence People by Dale Carnegie.

His much better book was How to Stop Worrying and Start Living, was just a wonderful book.

He wrote it later.

It's old, but not like the first book.

And one of the things he talks about is this technique called living in daytight compartments.

And here's basically how it works.

You have to have goals because you have to have purpose in life and direction.

And that's good.

So think about it regularly.

Where do I want my life to be in 10 years?

My relationships, my money, my job.

where I live, my family relationships.

Great.

Then think, where do I need to be in five years to get there in 10 years?

And then where do I need to be in one year to get to that five-year goal?

And then where do I need to be in one month to get to that one-year goal?

And then in one week to get to that one-month goal.

And then what do I need to do today and be here now today?

For the rest of the day, you don't need to worry about anything else because you made the day.

You designed the day.

Now live in that daytight compartment and you will get much happier and you'll be a lot less stressed out.

And that actually works.

So how often should we check our portfolio?

I don't know what's going on in the market today, Nicole.

A lot less often than you probably do.

And the more money that you have, probably the more that you're checking it.

But if you're checking it more than once about every two weeks, it probably means that you're too actively managing your investments.

So, either you've got a lot of alpha and so you're a billionaire, or you're losing money because you're too actively managing your investments.

So, don't do that.

Invest it.

Prudently, get somebody who does and leave it and live your life.

More than once every two weeks is too much.

I recommend not more than once a month, actually.

Wow.

I have a long ways to go.

I know, I know, I know.

But look, I mean, your business is talking about money, but still, I mean, any one of us, I talk about happiness, but I have to take my own advice.

Not always.

So because progress, it sounds not meeting the goal brings true happiness, should we make goals around investing or saving X amount monthly instead of hitting a big number like the FU number in our bank account.

Yeah.

Well, the FU number in your bank account is really a 10-year goal and kind of what it needs to be based on compounding interest after five years.

And then so therefore, you know what it needs to be after one year and therefore on average what it needs to be after a month.

And that's what we're talking about here.

We're talking about goal, what I need to put in and how it needs to perform.

And so that's actually how you get to the weekly or monthly savings goals is by living in more or less smaller compartments than these great big goals.

And then the goals will basically basically take care of themselves.

Well, I know for me,

reaching a small goal, and I've talked about this on the show, of being able to leave all the lights on all the time was more satisfying to me than a big F you money goal.

Like when I was little, I was told, turn off all the lights to save money on electricity, only flush the toilet if it's number two.

Those types of things really stick with you.

And so I found for me, the sign of success was being able to leave the lights on all the time.

Yeah.

In the comments now, everybody's going to be like, Nicole's goal is a high carbon footprint.

No, that's not what Nicole's.

I do flush the toilet.

Yeah.

No, I get it.

And what you're saying is that your goal is not

being impressive to somebody else as much as it is eliminating sources of unhappiness in your life, eliminating sources of obvious poverty in your life.

My mother's goal, she grew up during the depression and her family had nothing.

And she said, at some point, I'm going to know I made it.

I said, How?

She says, I'm going to eat real butter.

I'm going to put real butter on my bread.

And almost everybody listening to it was like, Well, what else would she want to put on it?

And the answer is that

they would make bacon and then save the bacon grease and use that on their toast.

Gross.

But that's actually probably better for you than a lot of things that people are eating today.

That's actually probably pretty natural.

But the point is that everybody's got their own kind of totem for what this is.

It's fine if you think about that, but it can't manage you, is the whole point.

Right.

So, how how then do you parse out whatever financial money trauma you've experienced into some of your goals later in life?

And by the way, it doesn't have to be as extreme as living through a depression or having really intense money trauma or poverty.

We've all collectively had macro trauma, right?

The dot-com bubble, the

housing crisis.

Right.

Exactly.

Yeah, yeah.

And particularly if you're graduating from college during the housing crisis.

And and so you've got a slow start in your career, and you'll be kind of thinking about that.

And a lot of people have had experiences in their job.

I mean, when I took over my role as a CEO, the company was in very tough financial shape.

And I had to cut the budget by 16% in the first 60 days.

You know, it had put this imprint on me.

So I always had this poverty mentality for the next 11 years.

And we were running huge surpluses.

And I'm like, bigger surpluses, bigger surpluses.

Like people, what's wrong with you?

And it was like, it was what had happened when I was a shelter dog, right?

And like my first owner was tough, right?

Is what it came down to.

Being conscious of these things is the answer to this.

Now, when it comes to the trauma that people actually have about money and think about money too much, there's really one solution.

It's the same solution to almost all of our problems, which is that we need more love in our life.

Love takes care of all of these problems.

When it's my own weird hang-ups with money, they weren't erased, but I was helped so much by marrying somebody who's the love of my life and who has a different attitude toward these things, who had different circumstances than me.

And what I really care about is the love that I have for my wife and kids.

And so pouring more love in your life will take care of a lot of your idolatrousness.

Adding more love solves almost all our problems.

Oh, Arthur.

That's so idealistic and lovely.

Yeah.

Hey, I'm 61 and I'm an economist.

I'm just a hippie.

Well, what do you even, when you're thinking about your family and your kids, how do you then pass on better money habits than perhaps what you've seen do you think that kids should earn an allowance what does that do yeah so

yeah there's a lot of debate about that there's a lot of debate about exactly what to teach your kids about money and i work with a lot of very high net worth people that are trying not to screw up their families so if you're by the way if you've got 50 million dollars in the bank that you're leaving to your kids woe be unto the kids because it's a real problem to inherit millions of dollars that will mess up their values it really will i mean just as you have so much pride in earning your own success, earned success is one of the great secrets of happiness.

But if they don't feel like they've earned their success, they'll always feel like they've been kind of managed as a liability a little bit.

And that really sets them back.

It's kind of like winning the lottery.

You hear all these tales of woe, people who win the lottery.

And it's the same thing as inheriting a lot of money is kind of what it comes down to.

So I have a lot of advice for really high net worth people on how to avoid that.

I have protocols that I actually have set up for that.

But when it comes to teaching your kids money values, believe it or not, I mean, the research is pretty clear on this.

It doesn't matter what you say.

All that matters is what they see.

Your kids will have the same hangups as you if they see that in your anxiety and in your worry and in your behavior.

This is true for everything, by the way.

People ask me all the time, what do I do so that my kid will practice my religious faith?

And I say, it doesn't matter what you tell them.

All that matters is what they see.

If they see you in prayer on your knees all the way through their childhood, that's what they'll say it means to be a grown-up and that's dramatically enhances the likelihood they're going to grow up religious if they see you never drunk then they'll think that being an adult involves not drinking excessively if they never see you screaming insults out of the window of your car in traffic they won't do that either when they grow up you could talk to them in a foreign language all that matters is what they see so when it comes to money this is super important when they don't see you stressed out about money because you're running a balance on your credit card, when they don't see you having a tough time with employment, but you're driving a $75,000 pickup truck that you're paying a $700 a month payment on, when they don't see you doing irresponsible things with money, they will grow up and not do irresponsible things with money.

That's what it comes down to.

Although I do think some of the phrasing does have an impact.

We can't afford that.

Or some of the terminology that we use around money, that's not a priority right now, might be a better way to phrase it.

But it's really what you're doing because a lot of people will say, we can't afford that, but then they're buying something equally stupid.

I can't afford the thing that you want, but I can't afford the thing that I want, but actually we can't afford either.

So the behavior is really clear.

When you're saving when you need to save and you're spending at an appropriate level and the kids see that, so that what you say is simply reinforcing what they're actually observing.

It's the behavior that is the big swinger and how they wind up.

And how has understanding the relationship between money and happiness affected you personally and how you approach salary negotiations, setting your rate for things like book deals or speaking engagements?

So I have

a very privileged position, to be sure.

I have a company.

I'm an entrepreneur.

I mean, I have a happiness company.

And we're a merry band of people that...

are all about writing and speaking and teaching and doing media and books and book tours and all this stuff.

And it's very, it's lucrative because people want to be happier.

But my work follows this mission of my life and organization is to follow kind of four rules.

And this is what I recommend to anybody who's starting a company.

The four rules that are non-negotiable and they're in order.

So these are your objectives and you have to follow all of them.

You can't do a lower order objective without doing one higher above it.

Okay.

So for me, and these are just mine.

I'm not recommending these to anybody else.

I only do work if I feel like it glorifies God.

That's just how I feel.

And the second one, I only do work if I feel like it helps people.

And then, third, I only do work if it's a fun adventure.

And then, fourth, I only do work if it's lucrative.

And that's the last, that's the least important.

And I recognize fully that I'm in a very privileged position.

And earlier in my life, I couldn't have had that order the way that it was.

I hope I was always glorifying God and helping people, but for a long time, I would have had to have put making a living above having an adventure, to be sure.

But I recommend that everybody approach approach their work with some set of goals where money isn't at the very tippy top.

Who are you as a person?

Who do you want to, how do you want people to understand you as a person when they actually see you doing your work?

What is the higher power that you're answering to?

Maybe it's love, maybe it's values, but it can't be money if it doesn't work that way for anybody.

And I don't think anybody actually has to in that way do something that they feel strongly is not helpful to others, that doesn't serve their values only for money.

And so that's actually how I think is a good way to think about it.

I mean, ironically, money does then give you more leverage to make those choices.

It all should reinforce itself.

It absolutely should reinforce everything iron sharpens iron.

But once you've got those priorities and you've got them in order, here's the secret.

Here's the dirty secret.

You're going to make a lot more money.

So that, I mean, what you're saying is money without meaning is just paper.

Yeah.

And no matter how much you have, you have to ascribe some sort of meaning to why you're doing what you're doing.

And it can't just be for money, but there is no shame to feeding your family.

So

you need to also make money in legal and just ways, I would say.

One way to leverage money, as you mentioned, was to make yourself happier by buying time instead of buying things or buying experiences, giving to charity.

So how can we think about a happiness budget?

Like putting aside a percentage for charity or for buying time?

What would those line items look like?

So I do that actually, as a matter of fact, and I don't buy that many things.

I own a house, I own a car, et cetera, but not that much.

I give away 10% of my income to charity every year.

It's really important to me.

So that's one thing.

That's been on my budget since I was 25 years old.

It's been going on for decades and decades and decades.

Before or after you fixed your 12 cavities.

Yeah, that was after I fixed my my 12 cavities.

It's also, by the way, I know that somebody's actually like before or after taxes, right?

My dad was super generous.

He was a college professor, too, but he had a little liberal arts college.

And when I was a kid, he didn't make enough money to support the family, so he drove a bus in the summer.

That's how different college teaching was than it is today.

And he always gave 10% of his salary to charity.

And so finally, when I became an economist, I said, Dad, are you giving 10% before or after taxes?

And he's before.

I'm like, what, dad?

No, after taxes.

And he's why?

And she says, just in case.

Just in case.

He was religious, but maybe a little superstitious too.

So I do have a budget for those particular things.

And then a lot of what I have set aside is for the experiences that I want to have with my family and what I want to give to my family.

So, for example, I'm a grandfather now, and I'll have my third and fourth grandsons just in the next few weeks, as a matter of fact.

I have a deal with my kids.

This is a fertility incentive.

I will pay for everybody's college.

That's a way to pass on intergenerational wealth that isn't putting in your kids' wine cellar or buying them a car.

It's saying, I believe in you and I believe in your kids.

I'm going to invest in it.

This is investing in future generations.

And that's expensive, right?

Is the way that that works.

But that's in the budget of what I actually consider to be an ongoing experience going forward that reflects my values and it reflects the love that I have for them.

And I hope on my best days for me, they have for me.

And I think it's a good use of money, actually.

I've heard that a lot.

I haven't heard it phrased as a fertility benefit.

Do you also pay for fertility treatments if needed?

No, no.

You're kids, you know, 22 and 23 years old.

I mean, they're

toothbrushes.

They get pregnant.

Got it.

Okay.

As you know, we end all of our episodes by asking our guests for a tip that listeners can take straight to the bank.

You have often said that implementing insights from happiness research has made you 60% happier.

Can you share something that our guests can can do today that will make them happier?

Yeah.

Imagine the person 10 years from now that is 25% happier than you are.

No, make it five years, five years from now.

So

you're five years older.

You're five years older, Nicole, than you are now.

And I know that sounds really old to you, but trust me, it's young.

And you're 25% happier than you are.

Now.

Make a list of the four things in order that are the reason that you're a happier person.

And you're pretty smart about this because everybody is.

And I guarantee you that number one is not going to be the F you number in your bank account.

I guarantee you the number one thing is going to be something having to do with love relationships in your life.

And then ask yourself and put them in order.

And it's okay if money is on the list someplace, but put them in order.

And then ask yourself, am I spending enough time at the top of my list as opposed to the bottom of my list?

Am I aggressively managing one and two, or am I paying all my attention to three and four?

Because most people are managing three and four more than they are one and two.

And then say, okay, what's the goal?

What's my goal?

What am I going to start doing today to start more seriously managing numbers one and two?

And that will help you a lot to get to the happiness goal that you have and should and deserve to meet.

And what's on your list?

If you get 25% on top of your 60, you're at 100%.

Well, I mean, I start from a pretty low base, Nicole.

My 60% increase, I'm probably like not even as happy as you now.

It's tricky is the whole thing.

So I can use an extra 25%, but on the top of the list really have everything to do with my faith and my family.

That's what they have to do with my faith and my family.

And I don't always make the right decisions.

And so I think about the person that I am.

to practice these things, the person that I'm trying to live up to being.

And then three and four, which has to do with work and money, for example, then they serve one and two, as opposed to being served by one and two.

In other words, my faith and my family don't feed into my economic goals.

My economic goals strengthen my love goals when I do this exercise right.

You're such a lover.

I know.

Happiness is love.

Yeah.

Money Rehab is a production of Money News Network.

I'm your host, Nicole Lapin.

Money Rehab's executive producer is Morgan Lavoie.

Our researcher is Emily Holmes.

Do you need some money rehab?

And let's be honest, we all do.

So email us your money questions, moneyrehab at moneynewsnetwork.com, to potentially have your questions answered on the show or even have a one-on-one intervention with me.

And follow us on Instagram at MoneyNews and TikTok at MoneyNews Network for exclusive video content.

And lastly, thank you.

No, seriously, thank you.

Thank you for listening and for investing in yourself, which is the most important investment you can make.