https://www.joanwestenberg.com/ WESTENBERG (https://www.joanwestenberg.com/) Subscribe Sign in Video 2 (blob:https://www.joanwestenberg.com/e54d3d6a-6226-4383-abdb-515b1c6be4d3) within any country richer people tended to be happier than poorer people but when Playback speed 1× Subtitles English Share post Share post at current time Share from 0:00 0:03 / 5:58 S1 SPEAKER 1 0:00 in 1974 economist richard easterland found something surprising within any country richer people tended to be happier than poorer people but when a country's overall wealth increased average happiness didn't rise along with it this became known as the easterland paradox and it shaped how people thought about money and happiness for decades it's become a piece 0:17 of conventional wisdom accepted so widely that it feels like common sense betsy stevenson and justin wolfers using more comprehensive data from a broader set of countries argued that there is actually a positive link between income and life satisfaction and this relationship holds across most of the world 0:32 Daniel Kahneman and Angus Deaton in a 2010 paper analyzing responses from over 450,000 Americans found the relationship between income and day-to-day emotional well-being plateaus at around $75,000 per year but the relationship between income and overall life satisfaction continues rising well beyond that point using data from over 1.7 million respondents 0:52 across 164 countries andrew jebb found satiation peaks around 60 000 to 75 000 for emotional well-being and around 95 000 for life satisfaction so money matters obviously money matters but it matters less than people think it does elizabeth dunn daniel gilbert and timothy wilson put it this way in a 2011 paper money buys happiness 1:12 but it buys less than most people think why why doesn't having more money make us proportionally happier the answer is that people just don't know how to spend it and there are three ways to spend it better the first is to buy experiences not things leaf van boven 1:29 and thomas gilovich published a paper in 2003 called to do or to have that is the question they defined experiential purchases as those made with the primary intention of acquiring a life experience and material purchases as those made with the primary intention of acquiring a material good in a sample of over 1:45 a thousand americans 57 percent reported deriving greater happiness from their experiential purchase while only 34 percent reported greater happiness from their material purchase because we adapt to material goods quickly the brazilian cherry hardwood floors that a home buyer spent days selecting become within months nothing more than the unnoticed ground beneath their feet and 2:03 the same is broadly true for designer handbags and jewelry and so on but every session of a cooking class is different from the one before. Every trip to a new city creates novel memories that recombine and ripen over time. It's easier to tell that your neighbour's television is larger than yours. 2:17 It is considerably harder to determine whether your neighbour's trip to Florence was superior to your hike through the Canadian Rockies. We're more likely to share experiences with others too, to talk about them after, incorporate them into our identities. with the possible exception of sociopaths and anyone who has been one-shotted 2:31 by louis vuitton we draw our experiential purchases closer to the self circle in self-relation diagrams than our material purchases the second path is to spend on others if buying experiences instead of things is the first principle of smarter spending generosity is the second in 2008 dunn lara agnan 2:47 and michael norton approached people on the university of british columbia campus and handed them a five dollar or twenty dollar bill randomly assigning them to spend it on themselves or on someone else by the end of the day That evening, the participants who had spent the money on others reported being happier than those 3:01 who had spent it on themselves. The amount of money itself made no difference. This finding has been replicated and proven over and over again. Ackman and colleagues found the exact same emotional benefits of pro-social spending in 120 out of 136 countries surveyed in the Gallup World Poll. 3:17 The warm glow of giving was detectable from Canada to Uganda, South Africa and India. it was detectable in toddlers under the age of two who showed greater happiness when giving treats to a puppet than when receiving treats themselves it was even detectable albeit with smaller effect sizes among ex-offenders giving to others connects us to others 3:34 and for social creatures who crave that connection generosity is a no-brainer it gives us a sense of impact and when freely chosen it satisfies our own need for autonomy too the irony of course is when people are asked to predict whether they will be happier spending five dollars or twenty dollars 3:48 on themselves versus someone else most people still predict that personal spending will make them happier and they are emphatically socially historically and scientifically wrong the third strategy is to buy time across massive samples from the united states canada denmark and the netherlands individuals who spent money on time-saving services reported greater life satisfaction 4:07 in a field experiment working adults who were given 40 bucks to spend on a time saving purchase reported greater end of day positive affect and lower time stress than when given the same amount to spend on material purchase time stress is one of the most corrosive elements of modern life in a survey 4:21 of 2.5 million americans 80 percent reported feeling like they did not have time to do what they wanted or needed to do public health researchers have ranked time stress as one of the most important social trends underlying rising rates of obesity and in a cruel twist wealthier folks report greater not lesser feelings of time scarcity 4:37 as incomes rise time becomes more economically valuable and as any resource becomes more valuable it's perceived as more scarce so people earn more money have more money and feel more pressed for time and then fail to use their money to buy themselves out of the crunch even among dutch millionaires nearly half reported spending no money outsourcing tasks 4:54 they hated doing Tolstoy wrote that happy families are all alike but every unhappy family is unhappy in its own way the same might be said as spending there are many ways to spend money that fail to produce happiness and most of them involve buying things we think will make us happy but do not 5:08 but the research converges on a small set of corrections buy experiences spend on others buy time and consider that many small pleasures may outperform a few larger ones these aren't revolutionary ideas they are if anything embarrassing in their simplicity but they are empirically supported and they run directly against 5:24 the grain of how most people actually spend their money the entire architecture of consumerism is designed to direct us towards material purchases the stores the advertisements the financing options the warranties there is no equivalent infrastructure for buying experiences for giving to charity or for paying someone to clean your house so you can spend saturday afternoon 5:40 with your children instead of your mop the right things are available for purchase but you have to seek them out the wrong things are laid out before you at every turn money can buy happiness the evidence is clear on that point but you have to know what happiness sells for and which aisle it's in most 5:54 of us aren't even shopping in the right store 1 You can actually buy happiness. You're just buying the wrong crap. Money Works - If You Know What to Buy https://substack.com/@jawestenberg JA Westenberg (https://substack.com/@jawestenberg) Jul 10, 2026 1 Share Transcript Most people have heard that money can’t buy happiness. But the research says something more interesting: money can buy happiness if you stop spending it on the wrong things. In this video, I look at the Easterlin Paradox, the research on income and life satisfaction, and why more money often fails to make people proportionally happier. The answer is not that money is useless. It’s that most people are shopping in the wrong aisle. The evidence points to three better ways to spend: Buy experiences, not things Spend on other people Buy back your time Money matters. But it matters less than people think, and it works better when used to create memories, connection, autonomy, and relief from time pressure. The wrong things are easy to buy. The right things take more intention. 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