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Personal Finance FAQ

Climbing Cantril’s Ladder

That’s the funny thing about life…We spend so much time worrying about how the future is going to play out and not nearly enough time admiring the precious perfection of the present.

For most of my life, my thinking about the future could be summed up with a general thought framework:

Things are going to be so much better when [MAGICAL EVENT HAPPENS]

Things are going to be so much better when I graduate high school (I was a NERD) and go to West Point.

Things are going to be so much better when I am done with plebe year.

Things are going to be so much better when I graduate West Point and get into the “real” Army.

Things are going to be so much better when I get out of the Army.

Things are going to be so much better after I graduate business school and get a high-paying civilian job.

Things are going to be so much better when I can start my own company.

Things are going to be so much better when I can sell my company.

Things are going to be so much better when we retire.

For a while, I’ve been aware that I needed to slow down and live in the present. James Altucher talks about “time traveling” and how we should focus on the present. I even called out my own behaviors.

However, it wasn’t until about a year before we finally pulled the plug on working (December 31, 2019) that I started to say more often:

You know, we have a pretty good life

.

For each of the previous incarnations of my “things are going to be so much better when” statements, it was more about removing pain than gaining something.

Getting out of high school to not be the nerd (well, I am still a nerd, but I quite embrace that persona now).

Not being a plebe to avoid all of the bad things that are associated with being a plebe at West Point (yes, class of ’93 and before, the Corps has).

Getting out of West Point to avoid the Potemkinesque existence compared to doing what we were being trained to do.

Getting out of the Army to avoid the operational tempo of constant deployments and the inanity of bureaucracy.

Getting out of business school to start to do what we were being trained to do (notice a theme here between educational institutions and wanting to actually go put something into practice? It speaks to the benefits of being an autodidact and of the apprenticeship system).

Getting out of Capital One to avoid the inanity of bureaucracy.

Realizing that I’d traded bosses in starting my own company, just that I’d multiplied them by a large factor.

Thinking that financial independence was the panacea and that I’d truly have the freedom to do what I wanted.

What changed? Besides, the blindingly obvious answer of actually retiring from a day-to-day job?

What is a Cantril Ladder and How Did I Climb It?

The Cantril Ladder is a survey artefact used by the World Happiness Report.

It asks respondents to think of a ladder, with the best possible life for them being a 10, and the worst possible life being a 0. They are then asked to rate their own current lives on that 0 to 10 scale.

The higher the number, the happier you are.

But how do you move from 4 to 5 to 6 to infinity and beyond?

Research from Utrecht University’s Tracy Cheung, Marleen Gillebaart, Floor Kroese, and Denise de Ridder show that people who have self-control and a focus on their longer-term goals have a higher level of happiness. There is some connection between setting a positive goal, achieving it, and getting that satisfaction as well, which contributes, but the focus on the positive goals is generally what drives increased happiness in people.

One would also think that in focusing on the positive goals, they avoid temptations, and, therefore, can claim victory, and, thus, happiness, from saying “NO, I DID NOT BUY THAT 183″ FLAT SCREEN TV!”

Instead, though, the authors posit another twist on avoiding temptation as it relates to the happiness of their research subjects:

Our findings complement previous research positing that individuals with high [self-control] experience problematic desires and temptations infrequently as they strategically structure their lives to steer clear away from these vices.

To put it in personal finance terms, they automate as many of their decisions as possible so that they’re not faced with the temptation of a wad of loose money and a sale on 183″ flat screen TVs. They don’t wander into the shops where they can be faced with the on-sale 183″ flat screen TVs, and, if they do, they aren’t walking around with a little change in their pocket going jing-a-ling-a-ling (5 points to whomever names the song and the band WITHOUT clicking on the link below…useless hint: a high school friend of mine was in the music video).


There she is in my not so useful hint. That’s not a red Dixie cup because she was too young for those things!

To start climbing the ladder in your financial life, you need to:

Simply put, identify what you want out of life, create a plan to get there, and then automate as much as possible so that you reduce the number of decisions that you have to make, decreasing the chances that you’ll make a bad one due to ego depletion.

Furthermore, as Eastern Washington University’s Philip Watkins, Kathrane Woodward, Tamara Stone, and Russell Kolts researched, shows that gratitude increases the grateful person’s sense of well being as well as feelings of abundance and appreciation of others. They also feel more in control of their lives as well as being able to incorporate the contributions of those around them who have contributed to their success.

But, as Wharton’s Cassie Moligner and Stanford’s Sepandar Kamvar and Jennifer Aaker’s research shows, how we define happiness changes as we age.

Their research shows that younger people define happiness in terms of anticipation – a corollary to my “things are going to be so much better when [MAGICAL EVENT HAPPENS]” framework. Happiness was looking forward to things, excitement about what the future brought, even if it was the near future.

However, as we age, we look more for contentedness and peacefulness in our lives. We seek the reduction of stress and the comfort of knowing that things are and are going to be OK.

Think about parents.

They were excited when they were planning on having a kid. They were giddy to announce they were pregnant. They had baby showers. The baby came, and all of their family and friends were gushing over the newborn.

Soon enough, things change.

The parents just want a moment of peace and quiet!

Even though that’s a rapid acceleration of going from excitement to peacefulness (only when the kids have FINALLY gone to bed), it is illustrative of our journey and how we derive our happiness as we age.

I would be remiss not to mention joy here. Happiness isn’t the only pursuit and the only reason that you climb the Cantril ladder. We also derive a lot of life satisfaction out of joy, if only we let ourselves have it.

The journey up the Cantril ladder is not a direct one. It’s also not a linear one. You’ll have fits and starts. However, by having a positive focus, exhibiting gratitude, implementing the automation to provide guardrails around your decision-making, and shifting your temporal focus from the future to the present as you age, you will find that you are happier and more satisfied with your life.

Where are you on the Cantril ladder? Have you moved up? How have you done it? Let’s talk about it in the comments below!

By Jason Hull, CFP®

Jason Hull, CFP®, was the co-founder of Broadtree Partners, a firm that acquires $1-5MM EBITDA companies. He also was the co-founder of open source search consultancy OpenSource Connections, a premier Solr and ElasticSearch firm. He and his wife FIREd (financial independence retire early) at 46 and 45, respectively. He has a BS from the United States Military Academy at West Point and a MBA from the University of Virginia Darden Graduate School of Business.

You can read more about him in the About Page.

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