Investors all over the world have been scrutinizing and implementing Warren Buffett’s investing and money strategies for many years. Many people recognize and understand that they will greatly benefit from Buffett’s expertise if they use his info to make money, but they also believe that they can spend money and buy their own happiness. So, what it all boils down to is this… They use their money to buy things that they believe is going to make them happy – from new cars, to televisions, to houses, to vacation homes, to private jets and things of this nature.
After nearly a decade of research, we learn that a problem with this approach is that most people’s intuition in regards to turning money into happiness is misguided for the most part, and wrong most of the time. What about the cars, houses and televisions? They really do not impact happiness one way or another. But there is a certain type of spending that does enhance happiness – and this is very valuable information for companies and consumers alike.
Recently, Warren Buffett wrote the op-ed titled “My Philanthropic Pledge” – but instead of sharing his advice about financial giving, he made suggestions basically stating that giving away money is a great way to enhance one’s emotional well-being. Buffett made the decision to donate 99% of his wealth to various charities. In regards to this decision, he said that he “couldn’t be happier.”
Is it necessary to be like Warren Buffett and give away billions upon billions of dollars in order to experience the same level of happiness? The best thing for ordinary people is that even the most modest type of generosity can make one happy. There has been a series of experiments where people are asked to spend money on others – in the form of buying family and friends’ gifts or giving away money to charity – and each has made the people happier when they spend money on others instead of spending that same money on themselves.
Research shows us that even the poorest countries such as Uganda – where so many people are having a difficult time meeting even the most basic of needs – the people that contemplated giving to others were a lot happier than those who only thought about spending money on themselves. We learned that you can spend just a small amount of money on a person and it will seriously boost your happiness. One of the studies found that spending as little as five dollars on other people throughout the day will make you a lot happier by the end of the day than those who only spend five dollars on themselves.
In an effort to increase the happiness of employees, smart managers are beginning to invest in their employees in little ways in order to boost their enjoyment. As an example, Google has a very compelling bonus plan for its employees. The company has a fund in which any employee is allowed to nominate another employee and they will receive a $150 bonus. When you look at the average salaries at Google, you’ll see that a $150 bonus really isn’t all that much money. But due to the nature of the bonus – having one employee nominate another instead of asking for it for themselves – has a very large payoff emotionally.
You can also influence customers by investing in others. Managers from an amusement park were not able to have their patrons purchase pictures of themselves at one of the rides throughout the park. Only 1% or less purchased the photo at the $12.95 price tag. But then researchers implemented a very clever variation. Customers were allowed to pay however much they wanted for the photo – or even get it for free – but they were told that half of the proceeds would go to charity. So the customer now has the opportunity to take a home souvenir and provide a nice service to others by purchasing the picture and having half the money go to a charity. Once the strategy was implemented, 4.5% of the customers started to purchase the photos for an average of five dollars. As a result of this experiment, the amusement parks profit per rider was able to increase by four fold.
Is Warren Buffett truly a happiness guru? Most people use his advice about investing, and that has proved to be a smart decision. It might be time to start thinking about how you spend your money – and take Buffett’s advice about happiness. You can spend as little as five dollars on somebody else and make yourself very happy throughout the day. If companies use Buffett’s happiness advice they will also receive a financial payoff too. By spending more money on customers and employees, they will increase customer and employee satisfaction – which will no doubt benefit the bottom line of any business.