Finance, Happiness

A Year of Altruism, and the Paradox of Having too Much Money

This weekend I indulged in a unusual pleasure that only comes once a year. I grabbed a cold beer, put on some music….. and I filed my taxes.

Now before you think I’m totally insane, there’s an important caveat: for the last few years in a row I’ve almost always received a tax refund.

Well, sometimes it pays to be a chronic student and career-changer.

So while indulging myself in a romantic evening among T4 slips and GST rebates, I arrived at the ‘Donations’ tab. If you remember, almost exactly a year ago I signed myself up for a Year of Altruism, a large part of which was to donate a certain percentage of my income. The reason being was that I had recently been enlightened to the fact that I was insanely wealthy relative to the rest of the world, so I figured I could share some of my good fortune.

…and it doesn’t hurt that I get about 40% of it back from my friends at the Canada Revenue Agency.

The end-of-year donations total wasn’t as high as I had set out to achieve. My goal was 5% of my income, but at the end of the year the tally totaled $1,350, which is only 2.5% of my gross salary.

But it’s not a negligible amount of money by any stretch, especially living in Vancouver where daily water cooler discussions revolve around the absurd cost of living.

So did it work? Do I feel happier?

….or do I wish I kept it for myself?

I absolutely don’t regret it, but with the automatic billing I didn’t even notice the money leaving my account. So while I didn’t get the hit of good-vibes like I get from dropping some canned soup off at the food bank, the benefits came to me in ways that I wasn’t expecting.

Before this experiment, every time I read about a world issue like civil unrest in Africa or increasing homelessness downtown, I would get a feeling of guilt or helplessness. Well yeah, who wouldn’t?

The same goes for walking by those brochure-clad donation seekers that I avoid eye contact with on my way to lunch. I know it’s a good cause…but sorry, I’m on my way to wander around Best Buy…er…important meeting to get to.

Cue the monthly donations. Every time I pass Steve from Greenpeace I can confidently say to him, ‘thanks, but I already donate to environmental charities!’ Or when I see a homeless man outside the Tim Hortons asking for change, I can remember that I give monthly to United Way.

It’s in these moments I get that promised dose of happiness, a reminder that each month I’m helping just a little bit.

I mean, no question about it this feels like a first-world problem meme. But I’ve confirmed that I get ongoing value from it, so I’ll keep the donations flowing.

But on top of this effective guilt-offsetting strategy, I learned a whole other reason why giving a portion of my money away might be a good idea.

The Money Paradox: too much money can actually make you, well….a jerk

I remember when we went trick-or-treating as kids, we’d go to the fancy neighborhoods with the expensive cars and long driveways expecting the elusive full-size chocolate bar, or maybe a Svarovski crystal or something. But what we found year-after-year was that we always got the best candy from the neighborhoods with older houses and rusty 92′ Civics in the driveway.

Was there something to this? Are less well-off people actually more giving? According to Paul Piff’s TED talk, the answer is yes.

In fact, it goes one step further. He says that having an above-average amount of money can actually make you less empathetic towards others, it can create a heightened superiority complex and it increases your sense of deserving or entitlement.

He proved this with real-world studies: at a crosswalk in California (where it’s illegal to not stop for pedestrians) 50% of luxury car drivers didn’t stop. For the remainder of economy vehicles, every single one stopped. EVERY one.

He also set up a rigged game of monopoly, and had a bunch of trials of two strangers playing one another. One player flipped a coin, resulting in one of the two receiving obvious advantages: they received extra money at the start, when they passed ‘Go’ they got twice the money, and that player even got the luxury sports car game-piece, while the other got the old boot.

For each study, the researchers noticed patterns as the game progressed. The ‘rich’ player consumed more of the bowl of shared pretzels; they became increasingly rude towards the other player, they smacked their game-piece harder and harder as they moved around the track; and at the end of the game, despite knowing the game was intentionally rigged, they justified they were a superior player and had earned their success in the game.

The Surprising Benefits of Intentionally having Less Money

This really puzzled me for a while. I knew that donating money can make you happier, but I didn’t consider a bigger question: is it actually better to have less money in general? 

In other words, is it in my best interest to keep an intentionally modest bank account? To set a cap and donate the rest? I mean, I don’t think I currently have a salary so large that it makes me a mean person. But it’s something to keep in mind: the potentially vast negatives in the pursuit of wealth.

Well for now I’m just going to work on increasing my monthly donations one little bit at a time, and looking for other little areas to be just a little more altruistic.

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