MONEY psychology of money

The Only 3 Things You Need to Know About Money and Happiness

happy and sad piggy banks
Sharon Dominick—Getty Images

The final word on whether money truly makes people happier still eludes us. But here's what we know so far.

Maybe you’ve watched Citizen Kane recently—or just heard the truism that “money doesn’t buy happiness.” Either way, you may not be surprised by a new study showing that more income doesn’t seem to make people more content.

The findings, by researchers at the University of British Columbia and Michigan State University, do come with a twist, however: While more cash doesn’t increase joy, it does decrease sadness. “Having more money provides more options for dealing with adversity,” explain authors Elizabeth Dunn, Kostadin Kushlev, and Richard Lucas. “Wealthier people may feel a greater sense of control than poorer people when difficult situations arise.”

So, for example, a leaking roof might be annoying for a few days if you’re rich, but a months-long ordeal that can cripple you physically, financially, and emotionally if you’re poor. Makes sense, right?

Problem is, studies about the relationship between money and happiness seem to be a dime a dozen these days, and their headline conclusions don’t always line up. (Several respected economists, in fact, claim to have found a positive correlation between money and happiness.)

So who’s right? Does it make sense to follow the money in pursuit of happiness, or not? As it turns out, a lot of the research that seems contradictory on the surface is actually complementary when you dig a little deeper. Here are three key lessons from across the literature:

1. Money increases certain types of happiness more than others.

About four years ago, Princeton researchers made headlines with a new study showing that happiness increases along with income up until $75,000, after which point it plateaus. More recently, a pair of University of Michigan professors found that, actually, more money means more happiness without bound.

At face value, these findings might sound at odds, but the seeming contradiction arises from the fact that the researchers used different definitions of “happiness.” Specifically, the 2010 Princeton study measured so-called daily happiness (“How was your day yesterday?”) while the Michigan folks looked at overall assessments of satisfaction (“How do you feel about your life?”). Those are very different questions, and reveal different insights.

While the newest study also used a “daily” metric to calculate happiness, it went further by asking for a full narrative about each day and how subjects felt during three activities. What the new research revealed, says Kushlev, is that what appeared to be happiness in the Princeton study might be better described as a lack of sadness. “When an even more fine-grained measure of happiness is used, no relationship between income and happiness exists,” he says.

Nobel-prize winning economist Daniel Kahneman, who co-authored the 2010 Princeton study, says these new findings don’t refute his so much as they measure contentment—or a lack thereof—from a different angle. After all, it comes down to how one views that $75,000 ceiling on happiness: Financial difficulties get harder and harder as your income descends in the five-figure realm.

“We also found the same effect of poverty on happiness,” says Kahneman.

In short, money seems to make you happier about your life overall—if not about your day—and, at the very least, softens the pain of bad luck.

2. If money can’t buy happiness, happiness just might generate money.

It’s important to remember that what we know about money and happiness is not based on experimental science (the conniving businessmen in Trading Places may have been okay with human experimentation, but academics aren’t). As such, money and happiness have been shown to be merely correlated, not causally connected.

And most of the money/happiness researchers acknowledge that their conclusions can almost always be explained in other ways. In fact, the authors of the new study posit an alternate explanation for their findings: It may be that less money doesn’t cause more sadness, but that more sadness causes less money.

That is, they write, “people who are predisposed to feel sad may… be less likely to maintain the effort necessary to find a better paying job.”

3. You can control the impact of money on your happiness.

As noted above, for every study about the relationship between money and happiness, another identifies exceptions to the rule. Some even show that many super-rich people—23% of them, according to one survey—are overwhelmed by constant financial stress (not to mention even wilder anxieties that members of the middle class might have trouble imagining).

The takeaway? Just focus on simple strategies for getting the most happiness out of the money you already have. Some insights you should consider:

  • Studies show you’ll get more contentment from putting cash toward experiences (like vacations) than material things (like a new TV).
  • Spending on other people actually generates more happiness than splurging on yourself.
  • Likewise, budgeting time to build social connections is a smarter happiness “investment” than making and spending money, research suggests.
  • Lending out possessions can help you enjoy them more once you get them back.
  • It’s best not to focus on money too much. While making more of it might have obvious benefits, obsessing over it stops you from savoring many important aspects of your life.

Read more about money and happiness:

MONEY Travel

5 Strategies for Dealing With Your Flight Cancellation

Travelers make their way through security lines at Denver International Airport, November 27, 2013.
RJ Sangosti—Denver Post via Getty Images

With storms threatening to put your travel plans on ice, don't head to the airport unprepared. Instead, go on the defensive with these moves.

With more than 5,000 flights already cancelled ahead of the big winter storm set to blanket the Northeast this week, travelers may want to prepare for a rough time at the airport.

Though cancellations have been light so far this month compared with January 2014, when 3.5 million people were grounded because of called-off flights, the worst may be yet to come, as the blizzard is expected to hit hard in major transportation hubs like New York City. American and United have both announced plans to suspend all flights on Tuesday in New York, Philadelphia, and Boston. All major carriers have already announced that they will waive change fees for storm-canceled flights.

Airlines are relatively quick to cancel domestic flights, says Tulinda Larsen, president of airline operations analysis firm masFlight. According to a masFlight data, a domestic cancellation costs the airline an average of $6,000, versus as much as $40,000 for an international route.

Even once operations resume on Wednesday, travel headaches are likely to persist. Here are 5 tips to help get you to your destination as quickly as possible, sanity intact.

1. Check in early

If your flight has been rescheduled, don’t relax just yet: In bad weather, oversold flights can be more of a problem, as stranded passengers buy up any open seats.

Your best defense against getting bumped? Checking in online as close to 24 hours ahead of time as possible, according to TripAdvisor travel advocate Wendy Perrin. Not only will you be less likely to lose your seat, but you will also have the best shot at choosing a good one.

2. Stay informed in real-time

Those facing a called-off flight shouldn’t just let the airline automatically rebook. First, check out FlightStats.com, which shows delayed and canceled flights all across the country. There may be a different itinerary that’s a better fit for your schedule.

3. Know your options

Each airline has its own policies when it comes to weather-related cancellations and delays; there are no federal requirements. Still, in the event of a delay, some airlines will pay for meals or other amenities, so it’s worth asking (more on that below). If your flight is cancelled, the carrier may be willing to put you on a flight with a different airline, so check out those options too.

4. Photograph your valuables

Losing expensive belongings is always upsetting, but tack on a crazy snowstorm and chaotic airport and you have the formula for a nervous breakdown. Be prepared for the worst by keeping receipts for, and snapshots of, anything pricey in your luggage. Airlines are legally obligated to reimburse up to $3,300 for your lost possessions.

5. Turn on the charm

Whether you’re dealing with lost luggage, delays, a cancelled flight, or any other travel nightmare, it’s important to be as polite as possible when making a complaint. “Take a deep breath. Remember that despite everything that has happened, you are still alive and, in fact, breathing. Then come talk to me and explain your situation,” writes flight attendant Cary Trey at ThePointsGuy.com.

Going a step beyond politeness and being extra kind to the person you’re dealing with—who, let’s face it, has probably been having a pretty bad day, too—can’t hurt. Trey suggests carrying mini-boxes of chocolates to show gratitude to those who go the extra mile to help you out.

If that sounds like a bit much, even a simple, “Thank you so much for your help!” will be enough make you stand out from the grumbling masses.

 

MONEY Super Bowl

The 5 Best Deals If You’re Not Watching the Super Bowl

"The Book of Mormon" on Broadway at Eugene O'Neill Theatre in New York City
"The Book of Mormon" on Broadway at Eugene O'Neill Theatre in New York City Stephen Lovekin—Getty Images

Lower prices and shorter lines await those who skip watching football on February 1 in favor of other attractions.

If the only hawks you care about seeing Super Bowl Sunday have wings and feathers, there’s a good chance your wish can come true—for cheap, no less.

Thanks to the one-third of the U.S. population that will be parked in front of their TVs watching football on February 1, it will be easier for the rest to snag discounts at zoos, ski resorts, spas, and other attractions—not to mention score seats at otherwise unavailable shows and restaurants.

Here are five suggestions for Super Bowl-skippers in search of good deals.

1. Take in a show

Super Bowl Sunday is a great time to see musicals and other popular shows that are normally hard to get into. For example, as of January 21, $99 evening tickets to perennially sold-out Broadway show “Book of Mormon” were still available for February 1 directly through Telecharge. And even if tickets to a hit show are all sold out at the box office, you’re still likely to get a discount on the resale market: Tickets on Stubhub for the same February 1 “Book of Mormon” performance are $40 cheaper than those for the following Sunday.

To look for theater performances near you, check Ticketmaster.com.

2. Finally eat at that restaurant you’ve been wanting to try

While everyone else has to settle for mediocre tailgate snacks, you have a much better shot than usual at scoring an enviable meal at some of your city’s hottest eateries. Restaurant reservation site OpenTable.com typically seats only about half the number of bookings on Super Bowl Sunday as on the Sunday before or after.

Some cities offer even better odds. In Philadelphia, reservations are typically down 60%, OpenTable found. But even major markets like New York City and Boston experience a pronounced dip: 30-40% fewer people will dine out in those cities on February 1.

A word to the wise: Even though your chances improve dramatically on game day, “some of the hottest and most acclaimed restaurants can still be tough to get into,” says Tiffany Fox, a spokeswoman for OpenTable. “So people shouldn’t wait to the last minute to book if there’s a special spot they’ve been dying to get into.”

3. Enjoy zoos and theme parks without the crowds

While Disney World spokespeople claim the event has no impact on park attendance, Disney vacation planning sites like EasyWDW.com and TheMouseForLess.com recommend visiting the parks on Super Bowl Sunday because you can expect far less company.

The game “keeps many locals away and is usually a great time to tour the parks,” notes TheMouseForLess.com, and Disney’s Hollywood Studios was “virtually dead on Super Bowl Sunday each of the last three years,” according to EasyWDW.com.

If you’re not going to be in sunny California or Florida come game day, try your local zoo or wildlife park. The Nashville Zoo, for example, is offering a “Zooperbowl Deal” this year that cuts admission by half. And last year the Virginia Zoo offered 50% off to anyone wearing merchandise from a Super Bowl participating team.

4. Hit the slopes

Skiers and snowboarders hitting the slopes instead of the sofa over Super Bowl weekend are in for a treat: Lift lines will be scant, and many ski resorts plan to roll out deep discounts that day.

The average booked savings on Liftopia.com during last year’s game day was 29% off window rates, making it the best value of any Sunday during the regular ski season. Prices are expected to drop similarly this year, but you will need to book in advance to take advantage.

The Arapahoe Basin Ski Area in Colorado, for example, has cut lift tickets to $57 this year, or 33% off, according to Liftopia. Utah’s Snowbasin slashed rates by 29% to $63. And in Vermont, Okemo Mountain is offering tickets for $73, or a 21% discount.

5. Have a Spa Day

If you’d literally rather stare at the ceiling than watch football, you can do exactly that—while getting a discounted massage or facial. You’ll find deals all across the country as spas promote their services for so-called Super Bowl widows (and widowers).

“If you don’t see a special at your favorite spa, just ask,” says Beth McGroarty, research director at spa directory site Spafinder.com. “Bookings may be lighter, and under-the-radar deals may be available—especially group discounts.”

If you don’t have a particular spa in mind, browse ratings on sites like Spafinder and Yelp and make calls to compare prices. Some examples of Super Bowl spa deals currently available include 15% off regular services at Clay Health Club + Spa in New York City; 25% off services at Kohler Waters Spa in Kohler, Wisconsin; and $50 off massages at The Palms Spa in Miami Beach, Florida.

MONEY consumer psychology

7 Ways to Trick Yourself into Saving More Money in 2015

piggy bank in various clamps and a vice
Steve Greer—Getty Images

These simple strategies can help you squeeze more out of your budget—and end the year with a lot more cash socked away than you started with.

If your New Year’s resolutions included growing—or starting—your savings, you’re already ahead of the pack.

Only about a third of Americans recently surveyed by Fidelity made any kind of financial resolution this year; and of those who did, just over half were aiming to stash more cash.

Kudos to you for taking this important step toward financial security.

Want to make sure your good intentions aren’t derailed before the month is out? The key is taking initial actions that will make repeating good habits easier, says University of Chicago economist Richard Thaler.

“We tend to revert to our long-run tendencies,” says Thaler. “To effect real changes, you have to make some structural change in the environment.”

With that wisdom in mind, the seven life changes that follow will help you save more money this year.

1. Use Inertia to Your Advantage

Research by Thaler and others has shown that people are victims of inertia: If you aren’t used to saving money with regularity, it’s likely going to feel like such a chore to start that you’ll never bother—or, you’ll quit after one account transfer.

But when your money is already being saved automatically, inertia works in your favor, since it’ll take more effort to stop saving than to do nothing. That is why a growing number of 401(k) plans offer automatic enrollment with a default monthly contribution rate.

Still, you may need to stick a hand in the machine if you want to have financial freedom in retirement, since the default rate (often around 3% of salary) won’t get you far in your golden years. Most planners recommend saving at least 10% of income.

Even if you set up your own plan, you probably haven’t touched your contribution rate since; more than a third of participants haven’t, according to a TIAA-CREF survey.

You can benefit from another relatively new feature called “auto-escalation.” Offered by nearly half of companies, auto-escalation lets you set your savings rate to bump up annually at a date of your choosing and to an amount of your choosing.

For other savings accounts, harness your own “good” inertia by setting up automatic transfers on payday from checking to savings (if you don’t see the money, you won’t get attached to it). Better yet, ask your HR department if you can split your direct deposit to multiple accounts.

2. Keep Your Eye on One Prize

Setting up automatic savings works well if your income and expenses are predictable; but what if either or both aren’t set in stone? You can save money as you go, but you’ll be more successful if you narrow your objectives.

Research from the University of Toronto found that savers often feel overwhelmed by the number of goals they need to put away money for—a stress that can lead to failure. Thinking about multiple objectives forces people to consider tradeoffs, leaving them waffling over choices instead of taking action.

One solution? Prioritize your goals, then knock out one at a time. If you know you need to contribute $5,000 to your retirement funds this year, focus on completing that first. Once it’s done, move on to saving for that dream home.

Another strategy is to think about your goals as interconnected; participants in the Toronto study were also able to overcome their uncertainty about saving when they integrated their objectives into an umbrella goal. So, for example, if you are saving for both a car and a vacation, consider setting up a “road trip” fund.

3. Focus on the Future

A part of what keeps people from saving is that we don’t connect our future aspirations with our present selves, research shows.

One way to get around that is by running some numbers on your retirement using a calculator like T. Rowe Price’s. When participants in a study by the National Bureau of Economic Research were sent exact figures showing how retirement savings contributions translated into income in retirement, they increased their annual contributions by more than $1,000 on average.

Another easy trick? Download an app like AgingBooth, which will show you how you’ll look as a geezer. One study showed that interacting with a virtual reality image of yourself in old age can make you better at saving.

This trick can work for more than just retirement. Another study found that when savers were sent visual reminders of their savings goals, they ended up with more cash stored up. Consider leaving photos of your goal (e.g., images of your children or dream home) next to the computer where you do your online banking to cue you to put more away.

4. Ignore Raises and Bonuses

As Harvard professor Sendhil Mullainathan has said, the biggest problem with getting a bonus is it’ll likely make you want to celebrate and spend it all—plus some.

The windfall creates an “abundance shock,” which gives you a misleading sense of freedom.

The simplest solution to this problem is to pretend you never got the raise or bonus in the first place, and to instead direct that new money into savings right away. (Remember the 401(k) auto-escalation tip? Set your contribution to bump up the week you get your raise.)

The same goes for when you return an item to a store for a refund or get a transportation reimbursement check in the mail. The faster you put extra cash into savings, the faster you’ll forget about spending it.

5. Make it Contractual

Carrots and sticks work.

One study asked smokers who were trying to quit to save money in an account for six months; at the end of the period, if a urine test showed them free of nicotine, the money was theirs. If not, the cash was donated to charity.

Surprise, surprise: People who participated in the savings account were more likely to have been cigarette-free at the six-month mark than a control group.

If you’re the type who responds to disincentives, enlist a buddy who can help you enforce upon yourself some kind of punishment if you don’t live up to your savings goal (e.g., you might promise a roommate that you’ll clean the bathroom for six weeks).

Maybe you respond better to positive feedback? Simply having a supportive friend or relative to report to on a set schedule may help you achieve results, as many of those who have participated in a group weight loss program like Weight Watchers can attest. Or you might look for some (non-monetary) way to reward yourself if successful.

You can use the website Stickk.com—inspired by the aforementioned study on smokers—to set up a commitment contract that involves incentives or disincentives.

6. Keep Impulses from Undoing Your Budget

Setting aside cash is only half of the equation when it comes to saving more: It’s just as important to keep spending under control.

Most people know to shop carefully—and early—for big-ticket items like cars or airline tickets (which are cheapest 49 days before you’re due to fly). But the premium for procrastinating on smaller items can also add up: Studies show that people spend more on last-minute purchases partly because shopping becomes a defensive act, focused on avoiding disappointment vs. getting the best value.

So give yourself plenty of time to research any item you’re planning to buy. And always go shopping with a list.

When you see an item that tempts you to diverge from your list, give yourself a 24-hour cooling-off period. Ask a sales clerk to keep the item on hold. Or, put it in your online shopping cart, until the same time tomorrow (chances are, that e-tailer will send you a coupon).

Or you could try this trick that MONEY writer Brad Tuttle uses to determine whether an item is worthy of his dough: Pick a type of purchase you love—in his case, burritos—and use that as a unit of measurement. For example, if you see a $120 shirt you like, you can ask yourself, “Is this really worth 10 burritos?” Likewise, you could measure the cost of an item in terms of how many hours of work you had to put in to earn the money to pay for it.

Also, since gift-shopping procrastination undoes a lot of people’s budgets, you might think about starting a spreadsheet where you can jot down ideas for presents year-round. That way, someone’s birthday rolls around, you can shop for a specific item on price rather than spending out of desperation.

Finally, remember that “anchor” prices can bias us to be thrifty or extravagant. So when you are shopping for products that range widely in price (like clothes or cars), start by inspecting cheaper items before viewing pricier ones. That way your brain will stay “anchored” to lower prices, and view the costlier options with more scrutiny.

7. Force Yourself to Feel Guilty

Surveys show that about a third of people don’t check their credit card statements every month.

That’s a problem, and not only because vigilance is your best defense against extraneous charges or credit card fraud. Seeing your purchases enumerated can also help reign in spending by making you feel guilty—one of many reasons people avoid looking.

Another perk of staying up-to-date with your bills: It makes you more aware of paying for redundant services, like Geico and AAA car insurance or Netflix and Amazon Prime and Hulu Plus.

Keep in mind that shaving off a recurring monthly payment gives you 12x the bump in savings. So a few of these expenses could boost your annual savings by a few hundred bucks. That’s a lot of burritos.

More on resolutions:

Read next: These Types of People End Up More Successful and Make More Money

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MONEY stocks

Why Fidelity’s New App Won’t Make You a Better Investor

Personal familiarity with a company can backfire.

Fidelity has added a new GPS feature called “Stocks Nearby” to its flagship mobile app. Open it up and it shows your location on a map, plus all the businesses around you that are connected to a publicly traded company. So if you are standing next to a Starbucks, its ticker symbol (SBUX) will show up on the map with a link to info on the stock.

Fidelity’s press release says the tool helps people follow the maxim “buy what you know.” What that means is shopping in a packed Apple store or indulging in a delicious burger at Shake Shack might inspire you to invest in the underlying business.

150112_INV_TinderStockApp2
Fidelity Investments

The company doesn’t say so, but that idea was popularized back in the 1980s by legendary Fidelity Magellan fund manager Peter Lynch, who liked to tell a story about discovering his winning investment in Hanes when his wife brought home L’Eggs pantyhose from the supermarket. Great story. And it was also great marketing, because it made investing seem a lot less mysterious.

Not a great investing strategy, though. For example, one study shows that people who invest in industries they work in do worse than traders who don’t work in the business. “Investors confuse what is familiar with what is safe,” says Larry Swedroe of Buckingham Asset Management.

There are several other reasons not to base investment decisions on a stroll through your neighborhood. For one, the businesses you’re most familiar with are likely mostly consumer products—which means the approach would likely leave entire industries out of your portfolio.

Furthermore, says Swedroe, if buying individual companies you “know” tilts your portfolio toward companies with outposts in your home town or city, you may miss out on the protection that geographic diversification affords. Say you own real estate in your city, in addition to shares in nearby companies: Then you’re especially vulnerable to a downturn in the local economy.

Even if you were to invest in a global company like Walmart—a likely stop on your shopping routine if you are among the majority of Americans—being a consumer doesn’t make you an expert. “If you notice a brand is doing well, it’s naive to believe you have valuable information,” says Swedroe. “Mutual fund managers and other professionals have access to the same or better information about a company’s prospects, so it’s more likely that you are actually at a disadvantage.”

In other words, you are likely to ignore the riskier qualities of a company you think you know well as a customer or as a local and feel excited about. That confirmation bias, in addition to overconfidence in your own impressions, has been shown to lead to lower returns.

Fidelity public relations director Rob Beauregard says the company does not intend for users to trade stocks without doing research first—and that the new “Stocks Nearby” tool is “an investing idea generator, not a stock picker.”

No matter how it’s spun, a focus on buying what you know gets the thinking backwards. You have to really know what you are buying.

MONEY Taxes

H&R Block Giving Free Tax Software to Disgruntled TurboTax Users

Pedestrians walk past an H&R Block, Inc. office in San Francisco, California.
David Paul Morris—Bloomberg via Getty Images

The tax prep company has moved quickly to poach customers annoyed by TurboTax's "sneaky" price hike.

War is never fun, unless it’s between corporations—and results in freebies for you.

This time, tax preparation giant H&R Block is going guerrilla on competitor TurboTax by spreading news through the media—but leaving it off their website, for some reason—that they will give free “deluxe” tax prep software to anyone who has already bought TurboTax Basic or Deluxe for 2014.

Why would you want free software when you’ve already bought some?

Well, as evidenced by nearly 500 scathing one-star reviews on Amazon, many TurboTax customers have grown furious upon discovering that this year’s Deluxe edition is missing features that they got used to in previous years. Those include options for filing Schedule C and D forms, which let you report investment and small business income. Customers are describing the move as a covert price hike, since accessing the missing features requires upgrading to a more expensive version of the software.

Enter H&R Block, offering a similar deluxe program—but without the abridgements—for anyone who emails SwitchToBlock@hrblock.com with their name, address, phone number, operating system (Mac or Windows), and a scan or email showing proof of TurboTax Basic or Deluxe purchase.

Unsurprisingly, TurboTax is going into crisis mode, with vice president Bob Meighan attempting to appease angry reviewers on Amazon; the company is now suggesting that Deluxe customers who feel they have been misled might be eligible for a free upgrade after all.

“We know it’s a competitive environment, and we will do whatever we can to keep our customers happy,” says Meighan.

Given that literally anything else would be more fun to shop around for, it makes sense that choosing tax software has a lot to do with brand loyalty. Once you get used to software, the psychological cost of switching feels high.

But this opportunity is a good one for TurboTax customers who want to take a peek at what the competition is offering in terms of speed and ease of use. Those who paid only $20 for TurboTax Basic would get a $55 value from H&R Block—though the difference in price is probably not as important as user experience.

After all, the average tax refund is about $3,000, and—as both TurboTax and H&R Block software will tell you—the money you spend on tax software is often deductible if you itemize your deductions.

MONEY holiday shopping

11 Clever Stocking Stuffers They’ll Never Know Cost Almost Nothing

If you’ve ever struggled to get a good gift at the last minute and, like most Americans, ended up spending way too much as a consequence, do not fear. Here’s a list of $25-and-under presents that will impress with their (read: your) savvy—without putting a big dent in your wallet.

  • Citrus spritzer ($5)

    Citrus Spritzer
    Citrus Spritzer

    Whether the goal is keeping guacamole from browning, adding an even mist of lime juice to some (chili!) popcorn, or simply wowing guests, the Quirky Citrus Spritzer is pretty much the coolest gadget you can get someone for $5. Expert tip? Increase juice flow by rolling the fruit in question on a table for a minute before inserting the device—and spritzing to your heart’s content.

  • “Drinks are on me” coasters ($6)

    Set Of Four 'Drinks Are On Me' Coasters
    Set Of Four 'Drinks Are On Me' Coasters Karin Åkesson

    Get these charming furniture-protecting coasters from illustrator Karin Akesson for the pun enthusiasts in your life (or that friend who always picks the most literal responses in Cards Against Humanity). Or anyone, really: Who doesn’t love a good double entendre?

  • Clothespin clip-on reading light ($7)

    Clothespin Reading Light
    Clothespin Reading Light MoMA

    Like any unsung hero, this ordinary-looking clothespin doesn’t seem like much at first glance. But pin it to the corner of a book and it transforms into the (drumroll…) Clothespin Clip Light—casting extra light across text while holding pages in place. It’s a sweet stocking stuffer for bookworms and lovers of modern/contemporary art alike… and worst-case scenario, it can be used to hang laundry.

  • Tetris Jenga ($12)

    Jenga Tetris Game
    Jenga Tetris Game Hasbro

    If you thought Truth or Dare Jenga was bold, give Tetris Jenga a spin. This new take on the game has six different shapes that look like the ones you used to flip around on your Ti-84 instead of paying attention in math class. It’s a lot harder to pull a piece out, but destroying the tower is the whole point anyway, right?

  • Tablet “hands” prop ($16)

    TwoHands E-reader prop
    TwoHands E-reader prop Felix

    In the catalog of first-world problems, having to hold your iPad while you use it might be at the top of the list. But that doesn’t mean this isn’t an issue people want solved, and luckily for us, TwoHands E-reader prop is here to help. TwoHands not only props up your tablet so you can read or watch movies hands-free, but its cute little hands will make you smile.

  • Folding cutting board ($16)

    Folding Cutting Board
    MoMA

    Unless you’ve got knife skills like a ninja (or Jamie Oliver), it’s hard to keep all those darn veggie bits on the chopping board and off of the floor. MoMA’s Folding Cutting Board solves that problem with bendable sides that transform into a little chute to help keep chopped food in check and transfer pieces from one place to another neatly. It’s the perfect gift for friends or family members with culinary inclinations but a low tolerance for clean-up.

  • Personalized “magic” mug ($17)

    Walgreen's Magic Mug
    Walgreen's Magic Mug Walgreen's

    This Collage Magic Mug from Walgreens lets you add text and up to 15 custom photos to a mug—with a fun extra twist: Those images appear only when the cup is filled with a hot beverage. Whether you lean more sentimental or silly, a personalized gift like this is likely to mean more than the typical holiday present. One playful idea? Photoshop images of you and other friends so it appears you’re “trapped” in the mug.

  • Smartphone gloves ($20)

    Agloves smartphone gloves
    Joe Coca

    Unless you live in a naturally perfect climate, you might be familiar with the winter misery of trying to type on your smartphone with the useless icicles you once called fingers, as freezing sleet and wind whips around you. Enter Agloves smartphone gloves. Yes, there are even cheaper versions out there, but deep discounts come at the expense of quality and touch-screen responsiveness. These sleek puppies give you the equivalent of BMW performance at Hyundai prices.

  • Foodie Survival Kit ($20)

    Restoration Hardware Foodie Survival Kit
    Restoration Hardware Foodie Survival Kit Restoration Hardware

    For foodies and flavor junkies who can’t tolerate a bland meal, this emergency Mobile Foodie Survival kit is a game-changer, especially while on the road (or camping). With 13 organic spices, your gift recipient can heat up a too-tame Tikka Masala or add herbal fragrance to a mopey pasta Alfredo. Plus, buying the kit supports a good cause: It’s assembled by disabled adults through non-profit Brooklyn Community Services.

  • 10-in-1 bartender tool ($22)

    Restoration Hardware Bar10DER
    Restoration Hardware

    We’re not going to say they’re the best part of December, but holiday cocktails are a delight, and anyone who disagrees is wrong. Hopefully those on your gift list understand the truth, because you won’t find a better gift than this Bar10der tool from Restoration Hardware. Whether one needs to muddle some rosemary, zest an orange, or strain ice, the 10 devices that pop out of this tool have got the cocktail game covered.

  • Dining Table Tennis ($24)

    Dining Table Tennis
    Dining Table Tennis Restoration Hardware

    Here’s a scenario: It’s day two of your family’s holiday celebration. Cookies have been eaten, presents opened, and Netflix queues depleted. Everyone’s trapped together and there’s nothing left to distract from food comas (and bickering relatives). Enter Dining Table Tennis, a kit with all you need to turn your dining room table into a ping pong battlefield. It burns more calories than Scrabble and gives your loved ones something fun to do—even after all the wine is gone.

MONEY Holidays

The Secret to Cheap Gifts People Will Actually Cherish

Forget gift cards or store-bought knickknacks that will just get regifted. The best presents come with something money can't buy.

If you want to really wow someone over the holidays with a token of your affection, chances are it’ll take more than a trip to the mall (or Amazon.com): A survey shows nearly three-quarters of Americans will be unhappy with their gifts this year.

Distinguish yourself from ordinary gift-givers by using your skills to make a present that packs an emotional punch. Artistic? One MONEY staffer’s illustrator boyfriend once gave her a hand-drawn picture book in which she was the main character. Good on Google? Another staffer did some Internet sleuthing and tracked down her father’s long-lost war buddy and was able to give her dad a letter from the friend as a gift.

If these ideas sound too intimidating or time-consuming, there are shortcuts to memorable gifts. Consider ordering a wall calendar from a site like collage.com with your funniest family photos, organized by season. Or a shirt with an inside joke for your closest group of friends from customink.com.

If you’re short on inspiration, your best resource is the vast digital footprint we all leave behind these days (for better or worse): Comb through old texts, emails, and chats for clues as to what your intended gift recipient might really love. And—for even more creative ideas—check out the video above.

MONEY stock market

Why Nobody Should Have Believed the $72 Million High School Stock Trader Rumor

disappearing stack of cash
Walker and Walker—Getty Images

We should have just done the math.

Now that high school senior Mohammed Islam has admitted to New York Observer editor (and former MONEY columnist) Ken Kurson that he completely made up that whole stock-trading boy-genius gazillionaire story, the Twittersphere is condemning New York magazine (and writer Jessica Pressler) for what’s assumed to be sloppy fact-checking.

There’s no doubt that the situation is embarrassing, and that the still-posted article — a section of the magazine’s “Reasons to Love New York” feature that already went through a headline revision Monday (“Because a Stuyvesant Senior Made $72 Million Trading Stocks …” became “Because a Stuyvesant Senior Made Millions Picking Stocks …”) — will need to be corrected further.

It now appears that there are no millions. Not the rumored 72. None.

Still, there’s an argument that Pressler and New York are not solely culpable for yesterday’s media circus. Let’s be honest: Many in the media who covered and disseminated this story (including, albeit very skeptically, MONEY) are New York-based media types, proud of our city and its if-you-can-make-it-here-you-can-make-it-anywhere mythology.

Taken at its word, the story felt like an ode to free markets and the American Dream. From hobbyists to professionals, investors are thrilled by the idea that with enough smarts and hard work anyone can go from rags to riches, no matter where they start. If an industrious first-generation American can build a massive fortune between the age of 9 and 17, you can too, right?

There’s a term for this impulse, in fact: “confirmation bias,” which is what experts call the common human tendency to seek out only information that confirms what we already think — or want to think.

The fact is, we should have done the math, as the graph and explanation below show.

Screen Shot 2014-12-16 at 8.44.58 AM
Source: MONEY calculations

In New York and other publications, Islam claimed he started trading using money from tutoring while he was in middle school. His starting age was given as either 9 or 11. Lets assume he had started at 9, in 2006. Then let’s assume he was exceptionally industrious with his tutoring, allowing him to start with $10,000 in savings. In order to end up with $72 million dollars by his senior year, Islam would have had to post average annual returns of 168% from age 9 to 17. That’s staggeringly unlikely.

But let’s take it further: Imagine that someone had spotted Islam’s prodigious talent and given him $100,000 to play with in the markets. Even then he would have had to return an average of 108% annually. That’s more than five times Warren Buffett’s average returns of 20%. And he would have had to do it every year for nearly a decade.

In other words, Islam’s story was preposterously unlikely even if we’d given him all of the benefits of all of our doubts.

Other stories of investing prodigies have come out recently, including one about a New Jersey teen who claims he turned $10,000 into $300,000 trading penny stocks, a feat that would require a one-year return of nearly 3,000% (which is improbable though not impossible). The reporter on that story seems more confident in his fact checking.

Bottom line: $72 million is an insane amount of money to make from scratch while day trading. Pressler originally did call it “unbelievable,” and that’s what it should have been, for all of us.

MONEY Stock trading

High School Student Rumored to Have Made $72 Million Trading Stocks

Stuyvesant High School at 345 Chamers Street, Manhattan, N.Y.
17-year-old (alleged) millionaire Mohammed Islam is a senior at Stuyvesant High School in New York City. Craig Warga—NY Daily News via Getty Images

Published claims that a NYC high school student made a fortune trading securities turn out to be exaggerated.

[Editor’s note: See story update below.]

Well, here’s a creative way to make your college application stand out: Mohammed Islam, a senior at New York City’s Stuyvesant High School, has become a local celebrity with the publication of a profile in New York magazine that claims he’s made $72 million by trading stocks and other securities in between classes, homework, and extracurricular activities.

Islam, who also appeared on Business Insider‘s 20 under 20 list last year, says he has been trading stocks since he was 9, having been taught by an older cousin who now works at Goldman Sachs. Though he started off trading penny stocks, Islam says he’s made millions since then by betting on gold and crude oil futures, as well as small- and mid-cap stocks.

Depending on your perspective, this story could be read as an inspiring tale about the child of Bengali immigrants beating the odds. Or as a worrisome example of how Wolf of Wall Street-worship — along with a taste for bottle service, models, and BMWs — is corrupting our youth.

If the story is actually true — Islam told New York that his net worth is in the “high eight figures,” but it’s not clear where the $72 million figure came from and no documentation of his profits has yet appeared — it would be interesting to know a little something about his trading strategy. We’ll update if and when we hear from him; so far, Islam has not yet responded to our messages sent via Facebook.

Update: On December 15, Islam told CNBC’s Scott Wapner that he didn’t actually make $72 million trading; that he doesn’t know where the figure came from; that he in fact has made “a few million dollars” trading; and that he is uncomfortable with the way he was portrayed in New York. “The attention is not what we expected,” he told Wapner. “We never wanted the hype.” Later in the day, Islam admitted to New York Observer editor (and former MONEY columnist) Ken Kurson that he pretty much made up the whole story. In this December 16 article, I explain why nobody should have believed the story in the first place.

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