How much more time on the Hedonic Treadmill ?
If you haven’t heard of the phrase ‘hedonic treadmill’ then chances are very high that you are on one. And if you have heard of it or read about it, chances for you too are pretty high for being on one, just blind to it in many ways .
Philip Brickman and Donald T. Campbell introduced the concept of hedonic treadmill in their essay “Hedonic Relativism and Planning the Good Society” .It suggests that when you start to make more money, your expectations and desire will rise and therefore you adapt to your new situation. You will have to improve your finances constantly to stay on the hedonic treadmill because there will always be a new something to buy or achieve or acquire.
As you make more money, your expectations and desires rise in tandem, resulting in no permanent gain in happiness. Thus, you work harder and harder, spending more and more, and then find you are no happier making and spending $500,000 a year than you were making and spending $100,000 a year.
The video above gives you a glimpse into what hedonic adaptation means . It simply makes you adapt to the situation around you, whether extremely good or extremely bad, and gets you back to same levels of happiness i.e. if you would score your happiness as 5/10 before the lottery, you might increase it to 9/10 after winning the lottery. But post few weeks/months/years of the new lifestyle created with this newfound wealth, once the new lifestyle has become the norm for you , your happiness meter may shows 5/10 or 6/10 since its BAU (business as usual now).
This would make you go after another target/goal to get that dopamine hit that makes you feel happy about life and yourself in general. In no ways I want you to get an impression that being ambitious isn’t a good thing. It definitely is and mankind has made tremendous progress only with the contributions of those that were driven by a vision and an ambition for their countries/companies/societies/self.
But more often that not, this hedonic treadmill makes people chase goals because that would determine their level of success or their pecking order in their community or society. And that comparison is where the ambition gets polluted and it becomes about getting more and more and more because you still don’t feel enough compared to so many around you that have created much more.
The desire for success may be inherent to human nature. The great American psychologist William James once noted, “We are not only gregarious animals, liking to be in sight of our fellows, but we have an innate propensity to get ourselves noticed, and noticed favorably, by our kind.” And success makes us attractive to others. In the 1980s, the physician Robert Goldman famously found that more than half of aspiring athletes would be willing to take a drug that would kill them in five years in exchange for winning every competition they entered today, “from the Olympic decathlon to the Mr. Universe.”
Unfortunately, success is Sisyphean (to mix my Greek myths). The goal can’t be satisfied; most people never feel “successful enough.” The high only lasts a day or two, and then it’s on to the next goal. While on the hedonic treadmill, satisfaction wears off almost immediately and we must run on to the next reward to avoid the feeling of falling behind. This is why so many studies show that successful people are almost invariably jealous of people who are more successful.
Eg. if you lived in a Studio, you would aspire to live in a 1BHK house. After years of work, you save enough to move into a 1BHK and this gives you tremendous joy, for some time only. Post being in this house for 2–4 yrs (im being optimistic here with the timeframe) , you may start aspiring for a bigger house that could be 2BHK or 3 BHK in a better community. And its normal .
What’s dangerous (and all pervasive) is that the desire to move into a bigger house in a bigger locality comes due to the undercurrent of pressure to share with people “your address that states the fancy building/community” or to invite colleagues and friends to your home and they complementing you for the house you own. You don’t say it that this makes you happy, but it does. Till it doesn’t. And one day , it will not.
That’s when the desire to move into a villa takes over and the process repeats. Same thing happens with the car, same thing happens with the music system, same thing happens with the gadgets.
Iphone has built it’s business on consumers addiction to upgrade to the newest gadgets inspite of their older versions working just fine. Even if they didn’t want to, but if someone comments on your iphone 8 or on its low image quality or it’s lack of few features , the pressure starts building to upgrade as it ain’t enough compared to the peer group. And one day , you cave in and buy that fancy iphone XS. And your happy, and you feel great owning one and use it for IG stories and Snapchats or Tiktok. It feels great, till a day comes where this becomes normal and doesn’t give you the dopamine hit anymore. It’s no big deal having an iphone XS (while it’s a dream for many who can’t even fathom spending USD 1000 on a phone).
And the hunt begins for the next fix, next upgrade, next buy, next trip to the mall. It’s an endless loop and its sickening to see the futility of this excess consumerism built into our society. Job loss hurts , no doubt, but it hurts even more when you have racked up a lifestyle that has made you it’s prisoner. Same applies to businesses, as they have been impacted heavily too and huge debt laden capital structures has to do a lot with many businesses finding COVID a death knell to their existence.
Benjamin Franklin used to say “Beware of little expenses; a small leak will sink a great ship.” These lifestyle upgrades/shopping/expensing/acquiring all are tiny and insignificant in its occurence, but it takes the shape of a monster of its own , in due course.
According to a Forbes investigation, which analyzed 455 companies in the S&P 500 Index — excluding banks and cash-rich tech giants like Apple, Amazon, Google and Microsoft — on average, businesses in the index nearly tripled their net debt over the past decade, adding some $2.5 trillion in leverage to their balance sheets. The analysis shows that for every dollar of revenue growth over the past decade, the companies added almost a dollar of debt. Most S&P 500 firms entered the bull market with just 20 cents in net debt per dollar of annual revenue; today that figure has climbed to 38 cents.
Household debt in US today stands at USD 14 trillion , that is USD 1.6 trillion higher than the debt levels in 2008. These debt figures reflect not only the culture of consumerism in US, but it’s in every country, where there are opportunities, jobs, trade, business for its population to be engaged in. The debt levels will continue to rise with lifestyles of successful people being marketed to all , like its possible for all to make it happen..
This is Warren Buffet’s house since 1958 which he bought for USD 31,000. He still lives in this very house and doesn’t own a mansion in Malibu or an island of the coast of Costa Rica . This is the same man who sits on USD 100 billion cash in Berkshire Hathaway, committed to having Fort Knox of a balance sheet always . Few businesses under BH will take a hit, few will shut shop completely post COVID, but on the whole company will keep growing steadily and won’t need any support from the Fed for loans or PPP or stimulus of any kind.
This clearly shows Warren Buffet is off the Hedonic Treadmill and has always been . He drives his car on his own, eats a simple meal from McDonalds daily, plays bridge with his friends at Omaha Bridge Club, loves his Coke and endless supply of newspapers, annual reports, journals, publications and all other sources that he deems important. And these simple things make him happy, allow him to be a life long learner with ample time dedicated daily to sharpening his skills and knowledge and keeps his head clear to execute on choices that will benefit his shareholders (I am one of them too) .
Does everyone need to live frugally, eat McDonalds $2 meals , travel in local bus — NO !! But can you realise firstly that consumption ain’t gonna make you happy, acquiring more and more isn’t the path , the CEO or the Director position will give you fleeting sense of joy and the grind will begin again, which could be worse than the lower role in the company where responsibilities were lesser.
The following video by Steve Curtis is my all time favourite animation video and it is profound, crisp, highly engaging, real and funny — all at the same time.
If you do find this as bad news, then let me share the good news i.e. What’s the way off the Hedonic Treadmill? Below are three suggestions, that you can try and test for yourself if it works for you or not.
1. Use your work to serve your field of interest or clientele , where work itself becomes the reward and the gifts it bestows upon you is taken as a bonus.
The Atlantic carries a biweekly column by Arthur Brooks titled “How to Build a Life,” wherein he tackles questions of meaning and happiness. His latest post talks about four rules for identifying your life’s work, and it’s really good.
Brooks’ rule number one reads “the work has to be the reward” –
One of the biggest mistakes people make in their careers is to treat work primarily as a means to an end. Whether that end is money, power, or prestige, this instrumentalization of work leads to unhappiness. The psychologist Elliott Jaques — famous for inventing the term midlife crisis — once quoted a middle-aged patient as saying, “Up till now, life has seemed an endless upward slope, with nothing but the distant horizon in view. Now suddenly I seem to have reached the crest of the hill, and there stretching ahead is the downward slope with the end of the road in sight.” Later, he admitted that he himself was this “patient,” and this was his own lament. He had worked away for years in his career to get some fabulous reward, and then realized that there wasn’t much reward ahead at all, just aging and death.
When your career is just a means to an end, the payoff, even if you get it, will be unsatisfying. Don’t make that mistake. Your work won’t give you joy and fulfillment every day, of course. Some days it will feel pretty unsatisfying. But with the right goals — earning your success and serving others — you can make the work itself your reward.
Nassim Taleb states very categorically in his book Black Swan , that extreme success is rare and a freak accident many a times. It needs many factors to come into play which needs luck, though people claim skill and talent to be at the source of that success. He has given umpteen examples for every success story having 1000 failure stories, inspite of sharing the same skill and talent, sometimes even more .
It cannot be planned for or hoped for . But if you are good with your fundamentals, have a good character and if you carry the right reputation, then luck could play its part on you, or it still may not.
Since it cannot be planned, why not choose to serve your field of interest with 100% commitment to add value to all relationships. Irrespective of what comes as a bonus to you for your good work, you will experience happiness that is borne out of your attitude to give always , either at this company or the next. And giving is in your control, not someone else’s. Hence happiness is in your control too.
2. Spend less than you earn, always.
Vishal Khandelwal has shared this quadrant in his blog post . This picture itself speaks thousand words. Your cost of living and your income’s relationship is very very crucial. You would be acting hopeful or wishful if you are in the ‘TOUGH ASK’ zone. You will be acting dumb if you are in the ‘DISASTER’ zone. Most are existing in the ‘HEDONIC TREADMILL’ zone where the things you own, and more broadly the lifestyle you lead, often end up owning you.. But the zone where Financial Freedom actually begins is the ‘FUEL FOR WEALTH CREATION’ zone.
If there is one blog I would highly recommend for all readers of my blog, it would be Vishal Khandelwal’s.
3. Take time out for the simple pleasures
You will be surprised to find happiness in things that are deeply ordinary: enjoying a walk or a conversation with a loved one, instead of working that extra hour, for example. Going for your work outs. Dining together with family with your phones on silent mode. Watching a movie together. Playing Scrabble or Drawize together. Reading, A pat on the back. A full moon. An empty parking space. A cracking fire. A great meal. A glorious sunset. Hot soup. Cold beer. Don’t fret about copping life’s grand awards. Enjoy its tiny delights. There are plenty for all of us.
This is extremely difficult for many people. It feels almost like an admission of defeat for those who have spent their lives worshipping hard work and striving to outperform others. Social comparison is a big part of how people measure worldly success, but the research is clear that it strips us of life satisfaction.
Unhappy is he who depends on success to be happy,” wrote Alex Dias Ribeiro, a former Formula 1 race-car driver. “For such a person, the end of a successful career is the end of the line. His destiny is to die of bitterness or to search for more success in other careers and to go on living from success to success until he falls dead. In this case, there will not be life after success.”
SO PLEASE DON’T !!!! GET OFF THE HEDONIC TREADMILL .. STARTING TODAY.. IT ALL WILL WORK OUT WELL..
As Steve Jobs once remarked, “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever.” In short, you need to have faith.
Love
Manish