The hedonic treadmill is a concept that is often cited as a prime reason to avoid consumerism in favor of financial freedom.
Essentially, it’s been scientifically observed that human beings tend to return to a sort of “set point” of happiness after positive or negative events.
While everyone’s set point is different, we all have a certain level of happiness that we’re going to feel most of our lives, according to the theory of hedonic adaptation.
So one could undergo a major positive or negative change in their life, which may temporarily affect their level of happiness, but they’ll at some point thereafter return back to their set point.
If this is true, what’s the point of achieving financial freedom? If we’re doomed to “reset”, why even bother to attain such a momentous shift in one’s lifestyle if happiness is going to go right back to where it was before?
My Experience With The Hedonic Treadmill
I remember I bought a red 1997 Corvette with some money I inherited back when I was 21. I unfortunately spent the entire inheritance in less than two years, starting with this ill-advised car purchase.
But I guess I thought, as a naive 21-year-old guy, that this Corvette would magically change my world for the better.
And it did… for the first week or so.
I felt great driving this beautiful machine around. The ladies gave me a second glance. It was really fast. It gave me a feeling of success that I’d never had before in my life.
But I realized not long after buying it that it was just a car. Actually, it wasn’t just a car but a bummer of a car.
First, the ongoing expenses meant that I had to work a lot just to pay for the thing.
It required expensive insurance and premium gas to operate. I had to make sure it was clean all the time so that it looked good. (What’s the point of driving a sports car if it’s filthy?) In that same sense, I found myself parking far away from buildings and other cars just to make sure that nobody dinged the doors. Then, the fuel pump started to whine, indicating that it’d need to be replaced. That was hundreds of dollars on top of the hundreds it took just to keep it on the road.
Not only that but I started to see newer Corvettes around. Corvettes with nicer wheels and better paint jobs. And then I started to think about how much cooler it’d be to own an even rarer and nicer sports car…
And this experience was repeated over and over again throughout my youth, as I chased after the things that I thought would make me happy. I spent without thinking, because I thought it was the right way to live. But after short-term boosts to happiness followed by falls from euphoria, I realized something must be wrong.
The Hedonic Treadmill And Consumerism
The hedonic treadmill is aptly named because one feels like they have to move along faster and faster just to stay in the same spot. You have to incrementally consume more and more just to get the same temporary bump in happiness. One’s tolerance to consumerism increases over time as they spend more, meaning it takes ever-more spending and stuff to experience the same high. One simply adapts.
In my view, the theory is somewhat analogous to how addiction works: an alcoholic, for instance, has to incrementally consume more alcohol during each sitting just to get back to the same high they felt before. That’s because their tolerance to alcohol increases over time as they drink more. Of course, the end result isn’t pretty.
You could buy a big house. And the house would quickly become your “new normal” not long after settling in. You adapt. The kitchen that felt so spacious when you first toured the place with a real estate agent soon feels small. The yard becomes time consuming to maintain. The carpet should be replaced with hardwood floors. The garage can’t comfortably fit two cars – by the way, we need new cars!
Of course, you’d at some point notice your neighbor or co-worker has an even bigger or nicer house.
So on and so forth.
Once one is armed with this knowledge, it’s easy to avoid getting up on the treadmill and putting the thing on speed 8.0 in the first place. You’ll know that no matter how fast you run, you’ll never actually go anywhere. You will adapt to whatever circumstances or consumerist goods that enter your life, so why bother chasing the cheese that sits in front of the rat wheel when you know the race can’t physically be won?
If I’m being honest, it was this concept that heavily drove me to eschew consumerism in favor of financial freedom back in early 2010.
I didn’t want to bother myself with working 60 hours per week at a car dealership if I knew all along I was only doing it to afford stuff that not only wasn’t necessary but would also have no lasting impact on my happiness.
Why, Then, Become Financially Free If Our Happiness Will Always Revert?
However, I don’t think it ever crossed my mind that if all this talk about the hedonic treadmill were true, wouldn’t financial freedom then eventually become my new normal? Wouldn’t I adapt to financial freedom? Wouldn’t my happiness revert back to its natural set point soon after achieving my goal?
Well, I’m now on the other side of things. The last time I “clocked in” at a day job was all the way back in May 2014. And then, in March 2016, I realized that my expected passive income over the ensuing 12 months exceeded my expected core personal expenses over that same time frame, meaning I crossed over into financial freedom.
I can definitely say, experiencing both sides of the coin, that I’m far more happy now than I was before. Even more than two years after quitting my job, and many years after leaving the consumerist treadmill behind, I’m still much happier than I’ve been for much of my adult life. I haven’t felt things reset like they have in the past.
Being an analytical and curious person, I took it upon myself to heavily think about why this was.
I believe this has happened because there’s a range in which our happiness levels oscillate before they revert. Financial freedom has acted as addition through subtraction, allowing my happiness to oscillate much more often in an upper range and far less often in a lower range. This is because I’m spending far less time doing things I don’t want to do just to pay for things I don’t really need, which tends to have a counteracting effect on my happiness range.
While those “things” may provide a temporary boost/shock, most of your time is actually going to be spent paying for those things. But I’m now spending a lot more time on pursuits that actually have a meaningful and lasting impact on my overall well-being. That time vacuum has been filled with activities that I enjoy and obstacles that challenge me, allowing me to slowly realize my full potential as a human being. And so that counteracting “lid” has been lifted, allowing my happiness to permanently float in an upper range.
Thinking About The Set Point Like A Thermostat
Hedonic adaptation appears to be the body’s psychological attempt at homeostasis.
Much like a thermostat aims to regulate temperature, hedonic adaptation aims to regulate happiness (so as to not psychologically overwhelm the body into breaking down). But we know that there can only be so much accuracy to this. A temperature must rise above or fall below a set level before the thermostat kicks in to regulate, meaning a perfect temperature can never be maintained, and I believe our bodies work similarly. Humans are, of course, far from perfect.
If one believes in hedonic adaptation, then one must believe that happiness intermittently registers off of its set point before reverting. You can’t revert back to a set point if you were never off of it.
As such, there’s a spectrum there both above and below one’s natural happiness set point. And what seems to have happened for me is that I’m operating below that set point (in a cold range) far less than I used to, and instead operating above that set point (in a warm range) far more than I used to.
I’ll show you what I mean:
Looking at that crude (it’s good I’m a writer, not a painter) drawing, I did my best to visualize this concept.
What was happening back when I was spending most of my waking hours getting ready for work, going to work, working, coming home from work, unwinding after work, and preparing for the next day’s work was that I was operating in that lower range fairly often.
Work acted as this negative force, constantly pressuring my happiness down into that colder range, even as my body psychologically acted as a countervailing force to keep me closer to my set point. In essence, I was kind of bouncing around from my set point down into that colder range and back again, obviously with moments here and there where I was up in that warmer range, too.
However, financial freedom has acted as addition through subtraction, removing that negative force from my life, allowing my happiness to far more often bounce around in that warmer range, back to the set point, and then in the warmer range again. The oscillation is just more favorable than it was before. And not only is there that addition through subtraction but I also now have so much more time for activities that have a measurable improvement in my happiness – more time to exercise and receive unconditional love are good examples.
Of course, I still have moments where I fall into that colder range – life is never all rainbows and lollipops – but I’m now operating in a different section of the spectrum than I used to. If my happiness is 70 degrees, I was spending most of my time between 60 and 70 degrees before (with intermittent drops below 60 and spikes above 70), yet I’m now spending most of my time between 70 and 80 degrees (with intermittent drops below 70 and spikes above 80).
Because of my new, warmer inclination, things just don’t bother me as much as they used to. And I find that it’s far easier to experience that same sense of delight that I used to spend so much to feel. Best of all, these are practically everyday benefits, rather than short-term (and potentially artificial) assistance.
In conclusion, I believe in the hedonic treadmill. I experienced it firsthand.
If fancy stuff made me happy, I’d still be working. I’d have a nice car, a big house, and everything else that kind of lifestyle entails.
Instead, any temporary happiness boost that was derived from that line of thought (and corresponding action) came at the long-term expense of my happiness range. I felt trapped by my own lifestyle, then continued to mentally poison myself by thinking that the only way to cure my unhappiness is to spend more. It’s much like the alcoholism example above, which is a physical form of poisoning.
I’ve carefully and thoughtfully chosen my current lifestyle after much reflection on this. Fancy stuff tends to weigh you down by way of the additional upkeep. And the additional costs you introduce into your life means there’s this counteracting force that acts against you, cooling your happiness down.
I’ve found far more lasting happiness in attempting to become a better version of myself, every single day, than I ever found in an object. Financial freedom simply gives you the tools to pursue that endeavor with as much potential success as possible.
And so the hedonic treadmill theory can co-exist with the idea of a long-term boost to one’s overall well-being that’s attained by becoming financially free. By experiencing both sides of the coin, I’ve been able to reconcile what initially seems like opposing concepts. Although my set point may not be any different, I’m experiencing joy far more often due to the artificial lid on my happiness that’s since been lifted.
What do you think? Can the concept of hedonic adaptation co-exist with a lasting improvement to one’s happiness that’s achieved via financial freedom?
Thanks for reading.
Image courtesy of: lekkyjustdoit at FreeDigitalPhotos.net.