“Do not bite at the bait of pleasure till you know there is no hook beneath it.”
“Status symbols are medals you buy yourself.”
When you’re not paying attention, expenses act like a gas; they expand to meet (or exceed) their container, in this case, your income. Got a pay raise? That means you can afford a higher car payment, right?
Yet, a year later, are you enjoying the car that much more than the previous one? Probably not, and now you have a higher payment to boost. Like an addict chasing the next high, you try more, shinier, bigger, better, and faster all in an attempt to recapture that old buzz. Studies show that long term happiness is not related to the material goods that you possess, but, rather, in the things that you do and the experiences you collect. Additionally, studies show that a $75,000 annual income is the threshold for happiness – people who earn significantly more than that don’t report significantly higher levels of happiness.
Does this mean that if we reach an income of $75,000 a year, we should throw up our hands, stop, and not seek more income?
Not at all! What the study shows that is that we really don’t buy things that make us happier at a higher level of income. However, instead of looking to buy an even bigger big screen TV or an even racier car, we should focus on working to ensure that we can have longevity of that income over time to keep up a standard of living that will make us happy – not to keep chasing the elusive bigger, better, happier life.
As Tim Ferris notes in his book The Four Hour Workweek, people who earn or come into large sums of money early in life tend to find their happiness when they continue to learn and can give back.
The second drink never tastes as good as the first
My wife and I were in a bar one day. There was an older woman sitting at the bar drinking a martini. She finished, and the bartender asked her if she wanted another one. “No,” she replied, “the second drink never tastes as good as the first.”
She was onto something, and psychologists know all about it. Those who buy newer, shinier, faster toys in the hope of capturing that initial burst of excitement are only doomed to a series of repeating failures. As Dr. Edward Hagen explains, humans are inclined to experience what is called psychological adaptation. It’s what makes the second bite of chocolate cake not taste as good as the first. It’s also what causes drug addicts to try harder core drugs. They are trying to recreate the buzz that they got off of the first hit of the first drug they ever tried.
If you’ve earned it, then appreciate the good things in life. I do not advocate a Spartan lifestyle if you have the means to have a more lavish one. But I also advocate increasing the comfort of your life wisely, because the utility of the money that you spend chasing the next step on the hedonic treadmill is likely pretty close to zero. You’re only going to be chasing the ever-elusive buzz.
I seriously doubt that a $1,000 bottle of wine tastes 100 times as good as a good $10 bottle of wine. I personally prefer Graham Beck to Dom Perignon. Choose the things which truly buy you happiness and go for them with gusto, and next time you want to buy bigger, better, or faster, ask yourself – is it REALLY worth the money you’re about to spend?
What do you spend more on that you think is really worth the money? What do you overspend on? Join the discussion in the comments below!