Last Updated Sep 27, 2010 1:58 PM EDT
Writing on Forbes.com, Norton details his study of 315 Americans, who were asked to rank their current state of happiness and to predict how happier they would be if they made more money.
- Those making $25,000 a year predicted their happiness would double if they made $55,000. But in truth, the change in their happiness was only 7%.
- Once people earn about $60,000 a year, near the country's median income, "the happiness return on additional income is very small."
- What does make people happier is giving money away. In another experiment, people were given up to $20 each. Half were told to spend it on themselves, the other half on someone else. Interviewed later, the group that gave away their money was much happier.
So, please feel free to make money. But if you want to be happy, give most of it away.
- Spending on Happinesss (HBS Working Knowledge)