The Rachel Cruze Show - Harvard Professor Reveals The Real Reason You Want More Money

Episode Date: October 2, 2024

💵 Start your free budget today. Download the EveryDollar app! Did you know that how you use your money can impact your happiness? Find out how you can achieve lasting financial happiness in this interview with social scientist Dr. Arthur Brooks. Next Steps: ·      🎥 Watch my video What It Actually Costs to Live Happily in America.   Connect With Our Sponsors: ·     🏥 Learn more about Christian Healthcare Ministries. ·     🔒Remove your personal information from the web and get 20% off your DeleteMe plan.   Listen to More From Ramsey Network: 🍸 Smart Money Happy Hour 🎙️ The Ramsey Show   💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 💰 George Kamel 💼 The Ken Coleman Show 📈 The EntreLeadership Podcast   Ramsey Solutions Privacy Policy Learn more about your ad choices. Visit megaphone.fm/adchoices

Well, hey, you guys, I am so excited about today's show because whenever I have guests, it's always fun to have a conversation, but specifically with topics that selfishly I'm interested in. So today I have Dr. Arthur Brooks, and he's joining us. He's an author, a speaker, a Harvard professor, a social scientist, the list just goes on and on. So welcome. Thanks, Rachel. Great to be with you. I know. Thanks for being here. I've been looking forward to it. So great. Okay. So give us just a little context of you, just your history, what caused you to do what you do in the world today, because you're doing a lot. And you're making an incredible impact, honestly, with the content that you're writing, your articles, everything. It's amazing. Yeah, I've been working for the last five years exclusively on the science of happiness and bringing it to the most people I possibly can. And that's because some years ago,

when I stepped down from a CEO job that I had working in public policy, I went back to my roots as a behavioral scientist. So I was an academic for many years. And I thought, I want to go back to academia, but I want to use it in a way that I can lift people up and bring them together in bonds of happiness and love. This is my goal in life, but I want to use science and ideas.

And so that's what I've been all about. It's kind of a movement of using cutting edge social science and neuroscience to help people live their best lives. Yeah, and which I think is so fascinating. That's why I like all of your content, because it's proving the point that you can have these emotions, like, of gratitude or contentment. Or you're feeling a certain way or loneliness,

right on the other side. You're feeling these things. And then when you pair it with the brain, when you pair it with actual science and fact, I think it just gives like the validity to know, this is real stuff. This isn't just like this made up kind of woo-woo thing up in the air, right? Yeah, yeah. It's real. And you're seeing it, you know, right, as a scientist. Oh, yeah, for sure. And as a matter of fact, I started doing a lot of this because I wanted to have a better life personally.

I started to use my academic background in science to see whether or not I could engineer my own life in a better way. So I could be a better person. I could be a better husband, a father, now grandfather, how I could bring ideas to people in a more effective way. And I turned it into a first, I turned it into a class. I teach it at the Harvard Business School. I turned it into a class. on the science of happiness. And it was very successful because people were- were saying their work for them. I was going to say, I was going to say,

after you know, a really long waiting list. And then I started writing about it in the Atlantic, which is the magazine, and every Thursday morning, 1,300 words on the science of happiness and got a big audience because people were finding it was helping their lives. And I thought, huh, I got to find ways through, you know, great means of dissemination like this. Yes.

To get it to, you know, the audiences of people that can use science, but they didn't know that in a way that they can manage their own happiness in a more effective way and bring more happiness to others. See, here's the deal. The secret to happiness is becoming a happiness teacher. And so my goal is empowering people to understand their own happiness. You know, within the bounds of what's possible. I'm not trying to make it so that people never feel unhappy. On the contrary, because being alive means having, you know, negative experiences and emotions. Yes, yes. To not pathologize their unhappiness, but to manage it effectively and then to

bring more happiness to others. That's where all movement really works. So good. Because some of the stuff you talk about, too, which, money, like the whole like, well, does money buy happiness? Right. Like, that's always like the question I feel like. And when we talk about on this show so much is getting to a place of peace with your money, because a lot of people feel that stress and that anxiety constantly, just from the tactical side, right? They don't have the money to pay the bills and all that. So getting people to this place. But then I also think that there's this like imaginative world that I feel like we see maybe through social media or things that we've heard in the past that we think,

if I could just have X amount of money, everything would be okay. And I talk a lot of in this show is that, you know, you could still make a huge income and still be as terrible with money as you are today. It's just more magnified, right? And that the happiness doesn't necessarily come. But you talk about the five areas of what you can do with money. And that some actually will bring you some happiness on how you spend it or use it. And then there's some one that doesn't. Yeah, well, you walk through that.

Absolutely. And one thing that you said that's really important, which is that you can have a lot of of money and still be crumbing you with money. The reason is because money makes you more of who you are. That's right. Anything of these world's rewards, fame makes you more of who you are, good or bad. Yes. Power makes you more of who you are, good or bad. And getting rich, I mean, great. Congratulations. You hit the lottery, but in real life, because the lottery is actually awful. But you earned a lot of money. That's great, but it's going to make you more of who you are. So you better understand money. You better understand how it works in your life and your happiness.

In the character of who you are in the process, right? You need to work. work on you, not, not, it's just like, if I have more money, it's going to solve the problems. No, no, no, no, no, no, no. Totally. Now, again, we're not talking about living in a country where people are dying of starvation. Yes. We're talking, thank God we live in America. I am so grateful to live in a country where we have the high class problems that we have when it comes around money today. And I literally, in my prayers, I'm very thankful every day I live in this country, because my problems are so much better than if we were having starvation issues. Totally. Okay. So our high class problem is,

is what do you do with money such that you're not fooled and that you can actually become happier in how you use it. There's five things you can do. You can buy stuff, you can buy experiences, right? You can buy time by paying people to do things. You can give it away and you can save it. Those are literally exhaustive list of things that you can do with money.

There's lots and lots of work by social psychologists on what brings happiness or what doesn't. First of all, what does your brain want you to do? Now, Mother Nature programs into you that you need to survive, pass on your genes, and rise in hierarchy. That's what Mother Nature has programmed into your caveman brain to do. And the way that you do that ordinarily is by showing that you have excess resources. Why does somebody want five watches? That dude's got five watches.

He would make a good mate. So people are signaling in sort of the... Isn't that wild stuff? It's crazy. That it's even just innate in who we are as people, right? It makes you cool as crazy. way, right? And men especially will do this. So women too. But the whole point is we want to show that we have excess resources for all of these weird reasons that we don't even understand very much.

And so the result is that we make this mistake of thinking if we buy more stuff that looks kind of cool that will be happier. That's wrong. Why? Because Mother Nature doesn't care if you're happy. She doesn't care. The four ways to get happier consistently are using your resources within responsibility to get experiences and have those experiences with people you love. Yeah. Okay? Number two, it's not Disney World will make you happy, but Disney World with people you love will make you happy.

Yes, that's right. If you can afford it and you don't put it on the credit card. Sure. Thank you. Because I'm going to get to that. Number two is buying time. Yeah. But spending it not scrolling Instagram, but spending it meaningfully and, you know,

reading your Bible, going for a walk, spending it with people you love. Yeah. That's how you spend the time. Use the time in a way that fortifies you. That's good too, because I think that's convicting because there can be a sense of, okay, I'll just, you know, pass on this responsibility to X, Y, and Z to be able to, like, free up there, you know, some of my time. And then what do you do mindlessly? Yeah, it's not, it's not benefiting you. At all. As a matter of fact, you'll be happier mowing your own lawn, then you will be watching mindless television. Yes, yes. So don't buy the time by paying

somebody to, and then waste your time. On the contrary, think, if I'm not spending, the time mowing the lawn, what am I going to be doing? And then make the commitment and do it. So good. Yeah. Next is giving the money away. Giving the money away consistently makes people happier, healthier. There's even research that shows that when you give money away, people think you're better looking. Really? Yeah, yeah, I got to have on this. Yeah. So when spouses see their spouse behaving charitably, philanthropically, it's more attractive. It's more attractive, especially women see men who behave philanthropically as physically more attractive. Interesting. Yeah, News you can use, guys.

That's right. It's very exciting news. Again, give me some of the research behind this because we talk about, this is why I love having you here, because some of the things that we talk about on the show, again, it's through experience, but it doesn't have the layered education that you're bringing to the conversation. It follows common sense. Yeah, and the giving part, I mean, even on our budgeting app, it's the first thing. It's the first thing we tell people to do is you give, you save, then you pay bills.

Because giving the way I've always seen it and experienced it is it does create the joy of this selflessness in life where it's like not all about you, you're actually looking up and saying, what can I contribute to the world? Right? So there's joy in that. Totally. But what's the, like, what's the science? What's the psychology? Yeah, I'm curious. The answer is that when you witness yourself solving problems, you have greater agency. You have great. You're a person who's more effective. And so there's all these data that show that if you give more one year, you make way more than that back, about $3.65 for every dollar you give away in the next year.

Now, again, your results may vary. You've got to give something that you really believe in. Don't just burn the money with some dumb cause. And you've got to do the work to make sure that you're passionate about it. But the point is, the more you give, the more evidence that you have that you're a giving person, that you're an effective person, that you can afford to do it. It's a gutsy decision, right? And, you know, my dad, you know, my parents never made it out of Lord of the class. But my dad never missed his tithe.

My dad never missed his tithe. And it's funny because when I became an economist, you know, I remember asking my dad, you know, it's just about this tithing, you know, because I was doing work on it. I'm doing work on the behavior and the effects. I said, do you give before or after taxes? And my dad's like, before taxes. I'm like, dad, come on. I mean, it's, you know, a render under Caesar, but what's left, and he was a serious Christian guy. Yeah. I said, why? And he said, just in case. Just in case. Just to cover every base that I need. My dad was a scientist. And so he was thinking. And so he was thinking. about the probabilities that said are even in heaven. But the bottom line is it was very empowering to my parents and they cared about it and it was good for them. So good. And then the last is saving the money. And saving brings huge amounts of happiness.

Cute. Why? Because it's making progress. Humans are wired for progress. When you're saving, you're making progress. Now some people become pathological about it. I know rich people who are still beavering away money at 80 years old. Right. So like what's for the balance of that, not being a hoarder.

like a scarcity mindset, right? Like, what, what do you see of that balance of like there is a level of saving that creates happiness? Probably at a level of security and the progress and seeing that number grow. But yet, how do you balance that? Yeah, well, the truth is that most people are not going to have that problem. That's a very rare thing. So I find, you know, rich people who are misers, you know, the Ebenezer Scrooge effect. I don't see that very often. But sometimes, you know, I work with very successful people who have to say, look, you're putting money away at such an extent that you're not going to spend it because you don't know how to spend money. You hate to spend money.

It's become pathological. You're going to mess up your kids. This is going to mess up your kids because your adult kids are going to get, you know, 10 or 15 million dollars each. And that's just, it's not right. Because you earned your success and it's the source of your incredible satisfaction and you're not letting them earn their success. Why are you taking away that satisfaction from your kids?

So I have to have that kind of that Dutch uncle talk. Totally. But most people, I mean, most people watching us are like, yeah, it would be nice to have that problem, high class problem. Most people, the problem is that they think they're going to get more satisfaction from immediate consumption and debt. The spending. And the debt is incredibly bad for your happiness. I mean, I've got tons of data that show that the feeling of helplessness and the regress that happens when you're actually paying off consumer debt is way, way, way outweighing the satisfaction you can get from anything you buy right now.

Think about it. Interesting. You know, I look at car loans. Terrible for happiness. Terrible for happiness. Student loans, it can go either way. When they're too large or you don't finish your degree, big problem. Mortgages can be fine, but, but here's the thing, if you pay off your mortgage,

you'll get a happiness bump like you can't imagine. Totally, yes, yes. Most people have to borrow it by their home. Okay. For sure. That's not a dilaterious terrible thing, right? But if you can pay it off, you're going to love that. But credit card debt, it's crazy.

Now, the special case, I had to put groceries on my credit card. I had to pay a bill with a credit card. Okay. Those are special cases. That's not the vast majority of cases. No. The vast majority of cases are I wanted that thing. It's a lifestyle level.

And don't do it. Don't do it because you're going behind the line of scrimmage and you're going to have to come back and that's going to wreck your happiness. All the way. That's what's so fascinating too is because, again, not having the, not having me, the science, like all behind it all. But talking to people, Arthur, I'm like, doing this for 10, 15 years, I'm like, the house thing. even, right? I mean, the argument is constant. Why would you ever pay off your mortgage if you

have a 2.3%? You could be making 10%. The spreads 8%. You could be making more smart. And I'm like, but there's something about it. When you own and you have autonomy over your life, there's something that occurs within you, within your spirit and your soul that is different. But you now have the science to prove it. It's very satisfying. I think, you know, I see people who they live in places where housing values are going through the roof and they start using their house like an ATM machine. And they started by owing $80,000. And, you know, 10 years later, they owe $250,000.

And their argument is, yeah, but my house is worth $500,000. But no, no, no, no. What we care about is not these cold financial calculations about what looks good on the spreadsheet. That's right. It's the person. It's a human. It's you. It's you.

Does somebody own, if somebody have a claim on you or not? You know, it's incredibly freeing to have nobody have a claim on you. Totally. I mean, look, we're Americans. We demand freedom. Right. That's right. except all in this one, this one area.

Yeah. Thank you so much. I so enjoy again. Thank you, Rachel. All the work you're doing. I mean, truly, there is something about this, like, maybe the time we are in the year, even, but there's, like, restlessness that I feel within people, and people like you just bring a level of calm and peace. And I really appreciate it.

Thanks for all you do for setting people free. Thank you. Yeah. Thank you so much. Okay. Where can everyone find you? Arthur Brooks.com. Okay.

And your books, everything's there. The books. Yeah, but you can find out about it. Go on Amazon. You can find my books. Or in the Atlantic every Thursday. morning. I read about the science of happiness. But it's all there on arthurbrooks.com, one-stop shopping. So great. Guys, make sure to check out everything he's doing. Follow him.

And again, getting these tidbits of life, honestly, that brings a level of peace and control. So thanks again. Thanks. All right, you guys, if you enjoyed this conversation, then I highly recommend you also check out what it actually costs to live in America today. Remember you guys to take control of your money and create a life you love.