When I graduated with my bachelor’s degree in 2005, I was driving an early 90’s model Chevy Lumina. It had a single spinner on the rear passenger wheel, because I was ballin’. I had purchased this car for $900 from a college friend. It was an old car, but it ran perfectly and never failed to get me to and from work and school (which honestly was about all I needed it to do).
Once I graduated and got my first big kid job, what did I do with my awesome Chevy Lumina? Traded it in for a bigger better truck of course! Let me explain.
Upon graduation I was quickly promoted to management by the casual dining restaurant chain I served tables for through school. When I saw that job offer, my jaw dropped… $40k, 2 weeks paid vacation, and benefits. This was it, I was big time now, a 22-year-old hotshot ready to take on the world. And what does every 22-year entry level manager need? You guessed it, a $35,000 truck. I rushed to the nearest Nissan dealership, traded in my paid off Lumina for a brand-new Nissan Frontier (or as I affectionally now call it, a boat load of vehicle debt summing up to half of my monthly income).
The buying didn’t stop there. Within 4 months of graduating, I also traded in my $400 per month rental room from my sister for a $1400 per month interest only mortgage on a new condo, another must have for the penniless new professional. If you have a brand-new condo, you have to fill it with stuff, so next I hit the Lay-Z-Boy store and Best Buy like they were going out of style.
Do you see the trend I’m describing? If not, here it is… the acquisition of ‘stuff’ ruled my initial post-collegiate years. Within one year of graduating college, I had somehow accrued nearly $250,000 in debt for stuff (including my truck, condo, and a variety of other stuff I bought that I had lived without for years before). This continued for me for a couple more years. Then one day, I decided to sell every last thing I owned and move to Europe (Azores, Portugal to be specific). Interestingly, I lived in the Azores for one year devoid of ‘stuff’ and have some of the best memories of my life. But within a few years of returning home, I once again have acquired an unruly amount of stuff.
Why on Earth would one be so driven by the acquisition of more stuff? Does it make life better or result in an increase in net happiness?
The answer lies in the hedonic treadmill (otherwise known as hedonic adaptation). Simply explained, this expression describes the natural tendency of a human being to return to a baseline level of happiness after a very positive (or negative) change. For instance, I would go buy a new gadget and it gave an initial rush of happiness, but after a period of time, that rush wore off leaving me with little net change in my overall happiness. Seeking further temporary boosts in happiness, I would go buy something else and so the hedonic treadmill perpetuated.
There is absolutely nothing wrong with wanting to live a comfortable life, and to do so there are basic human needs that must be met. But I would argue that many of our relationships with acquiring stuff have far superseded the basic needs for survival and therefore do not result in a net gain in happiness. If you have unlimited resources and buying power, then perhaps this is no problem for you. But I don’t fall into that category of buying power and therefore feel compelled to dive deeper into my own hedonic tendencies and how to transition them into more sustainable mechanisms to increase my net happiness over time. Let’s dive into a few of my learned lessons on hedonic adaptation.
Money doesn’t buy happiness, but not stressing about how to pay the mortgage helps
I’ve seen both sides of the economic spectrum. I’ve been a struggling entry level manager trying to feed a family of 3 on peanuts and I’ve been a successful entrepreneur with no concern about paying my bills. And presently, I sit somewhere in the middle. Both ends of the economic spectrum come with tradeoffs. However, one thing I’ve learned to be true is that there is a baseline standard of living needed in order to maintain an equilibrium in net happiness. It’s pretty hard to be happy when you don’t know for sure if you’re going to pay the mortgage next month. These self-help gurus that spew catch phrases like ‘money doesn’t buy happiness’ clearly have never gotten to Friday night and not had $20 to buy a pizza for their wife and kid. While I can admit that the 5-star dinner really is just for show and doesn’t contribute to a net gain in happiness, being able to afford to treat my family once in a while and know the bills will still be paid is a must for me to maintain a baseline.
The latest and greatest gadget is a waste of money
Part of the hedonic treadmill is the rhetoric that we need the newest, latest and greatest stuff. For instance, I used to be that guy who bought the new iPhone every single year. Truth be told, this did not contribute to a net gain in overall happiness. Rather the new tech, gadget, or thing quickly just became a normalized part of my life. The way that new phones or gadgets are marketed makes it sound like your life will improve 10-fold by sheer virtue of owning them. But the reality is at the end of the day you’re still holding a newer version of a device that connects you to your loved ones and the rest of the world. The micro-second of speed or few extra pixels in the camera really don’t contribute to net happiness in the long run.