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I’VE SPENT MUCH OF MY life trying to better understand the world, especially the financial world. But I wonder whether I should have spent more of that time trying to better understand myself.
Why do some financial situations scare us, while others leave us unperturbed? Why do we spend time and money in ways we later regret? Why do we find our bad habits so difficult to change? Why do we admire some folks, while being jealous of others?
These questions are better directed to a psychologist than some aging, ink-stained wretch. Still, it’s questions like these that have fascinated me in recent years. I can’t claim to have the answers—but I have some sense for why they’re difficult to answer.
It takes years to know ourselves. It’s embarrassing to think back on the self-confidence of my 20-something self. I was so sure I knew what I wanted and that my way was the right one.
The decades that followed have highlighted how wrong I was. For instance, my instinct is to assume that others have good intentions. While that’s usually the case, it isn’t always. One consequence: I’ve occasionally been taken advantage of by folks I considered friends. Fortunately, while the emotional toll has sometimes been large, the financial cost has been modest.
But perhaps the big danger isn’t the personality traits about which we have some inkling, but rather aspects of our personality that we’re completely clueless about. Others might be able to fill us in on our shortcomings—if we’re humble enough to let them.
So much of who we are is innate, and much of the rest reflects early life experiences. There’s plenty of advice on what we can do to boost our happiness. But even if we followed all this advice, the impact would likely be modest. Why? We all have a happiness set point—an innate predisposition to be more or less happy—and that has a far bigger impact on whether we tend to be happy or not.
Layered on top of our innate personality traits are our life experiences, especially those from early in our lives. In my 20s, when I was raising two children on a junior reporter’s salary and money was in short supply, I remember my panic whenever I was faced with a car or home repair bill. Today, I can easily handle such bills, and yet a major expense can still bring back memories of those panicked moments from four decades ago.
We’re bad at figuring out what will make us happy. Why do we often waste money on things that bring us little happiness? Why are our closets and basements full of possessions we regret buying? We think we know what will make us happy, and yet we’re frequently wrong. My hunch: We go astray because we often spend money based on the influence of others, both past and present.
Bad habits are extraordinarily hard to break. It’s said that good and bad habits compound, and I believe it. My good habits—the discipline to exercise every day and to block out distractions so I can focus on the work I need to get done—have become so much a part of me that I can’t imagine changing.
What about my bad habits? That’s another matter entirely. For instance, at a restaurant, I’ll order an entrée simply because it comes with French fries, even if there’s another entrée I prefer—and even though I know I shouldn’t be eating fries. I’m especially susceptible to ordering the wrong thing if I’ve had a rough day and my “willpower budget” is at a low ebb. The good news: At home, Elaine largely dictates what we eat, and her inclinations are far healthier than mine.
Of course, eating isn’t our only outlet if we’re at a low ebb. Plenty of folks find other damaging ways to cheer themselves up, whether it’s spending too much, having a few drinks, buying lottery tickets or even making a few trades in their portfolio.
Life’s randomness is hard to accept. Why do some folks struggle financially their entire life, while others fly up the corporate ladder at fast-growing companies with booming share prices? Often, it’s easy to see the role of luck in the suffering and successes of others, so we’d be wise to assume that we, too, aren’t fully in control of our own fate.
Focusing on luck may help us to cope with one of life’s least admirable emotions: jealousy. When we think about our successes—financial, career and otherwise—we tend to think not in absolute terms, but about how we’ve done relative to contemporaries, including school friends, neighbors, colleagues and siblings. We’re not bothered by Warren Buffett’s billions. But we’re a little jealous about the college friend who ended up as CEO. Perhaps, however, our friend just had better luck than we did.
Today’s worries are almost always a waste of time, and yet we worry constantly. Many readers will be aware of the hedonic treadmill—our tendency to quickly grow dissatisfied with our latest accomplishment or purchase, and to start striving after something new, confident that this new goal will deliver lasting happiness.
We can think about our worries in the same vein. We finally put our latest fear to rest, only to start fretting about something else. It seems we’re hard-wired to worry, and the moments when we’re completely free of concern are few and far between. This, I assume, was a trait that helped our nomadic ancestors to survive—but I’m not sure it does much for us today, except increasing our unhappiness.
Jonathan Clements is the founder and editor of HumbleDollar. Follow him on X @ClementsMoney and on Facebook, and check out his earlier articles.
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Developing realistic expectations is very helpful and then do the things to make these a reality. Failure is to be expected, particularly if one pushes the envelope. The important thing is to learn about oneself and to continue. If life were a running race, it is okay to slow down when one hits a wall, but never, ever stop. I learned that walking from time to time is okay.
“We’re bad at figuring out what will make us happy”.
For a long time, I believed in setting goals and working hard to achieve them. When I did reach those goals, it didn’t feel all that great. Then realized that to be really happy, I must enjoy the journey, not the destination. May be a little too late!
This article is a good way to reflect on my past successes and failures. I review them and I try to learn my lessons. Hopefully, I won’t repeat my failures. I think life as a whole has to be analyzed like the stock market. You learn from the past successes and hopefully the future will look more promising in the long run. It is a good idea to live a balanced life and accomplish your short-term goals as well as long-term goals.
Not sure I’m buying this notion of a ‘happiness set point.’ I think happiness is far more dynamic in individuals – most subject to what’s going on with family, neighbors, and others in our lives. For example, right now, it seems every time I turn around a friend or family members is diagnosed with a serious illness, or someone known to me has died, or is preparing to. I’ve not been too happy of late, yet 6 months ago most things seemed very good, and I was very happy.
For me, happiness is largely a response to the quality and quantity of the stimulus around me, broadly characterized.
Consider that you gauge your happiness against your own standard when “not …too happy of late” and “very happy,” and you might be getting at the idea of a happiness set point. The set point idea is that we tend to hover around that personal range regardless of our own or other people’s efforts to change it.
I am sometimes embarrassed about my 20-something “whole” self, but I am also occasionally quite proud of that same guy. But I mostly don’t want to talk about the reasons why, and I especially want to bury or forget about the embarrassing moments. But I can’t, so they help keep me humble. That holds for my 20-something “financial” self, too, but only partly. While I also had a number of embarrassing moments in my saving and investing life, I am usually willing to talk about them in detail to just about anyone, along with lessons learned the hard way. I figure everyone has had those moments in one form or another. (And I guess that I will feel the same way about my 70-something self in ten years. I will have some embarrassments, but will still like the person I am.)
I look forward to reading your posts each time and marvel at your ability to continue to look forward in spite of all that has come your way. This may not sound reasonable, but it seems that having an end date on the horizon provides some small luxury of time. Saving, planning, forecasting and dreaming of the retired life were all ripped away from our horizon with the sudden and unexpected death of my SO of 25 years. It was to be a routine medical procedure, a short recovery then on with our wonderful retired life. But in six hours time it was all gone. It feels like losing half of your body and not knowing how to make the other half work. It was just not a consideration to us that it could happen. My prayer is that in making plans for your family to live without you, it can help them soften the harsh blow of reality. Thank you for sharing your heart and soul in this space. Your life work is a true gift that supersedes time.
This reminds me of a joke I saw recently. It really resonated with me with its unpleasant truths, at least for me, on occassion.
I am one who has a low set point – call it stoic – which has helped me in many ways, but certainly has a lot of drawbacks.
The joke
Q: You’re offered $50,000, but if you accept it, the person you hate most in the entire world gets $100,000.
Are you taking it?
A: Yes. Why wouldn’t I want $150,000?
Thanks for another great article, Jonathan. This question is such good food for thought. I’m a happy person by nature, but we all go through dark times. Looking back on my own struggles, it often comes down to wishing that I could magically change the facts of a situation. (Why did my brother have to die at such a young age? Why do I have RA?) I’ve learned to ask myself this question: The last time you fought with reality, who won?
I am grateful that you continue to share your wisdom with us, Jonathan.
Unsurprisingly, I am in complete agreement with all you have written here.
Here’s a little exercise that I’ve found useful. I think about, and make at least a mental list of, all the things that are decided for each one of us- on a life-long basis – when we are one-second-old. For but a few examples off the top of my head, the moment we become a diploid cell such things as who are parents will be (and all that entails), what ethnicity we will be, what if any illnesses we might be genetically susceptible to, what the limits of our attractiveness and body shape are likely to be, including our adult height, what socio-economic class we are almost certain to be raised in, not to mention whether we’ll grow up in a democratic nation that fosters free enterprise or some far lesser environment.
All these things and more are part of our fates long before our brains can form a single thought or preference. The same is true for every living person and everyone who has ever lived.
Thinking along this line has brought me much greater humility and much greater compassion for virtually everyone, including the most difficult and maddening person of all – me.
Jonathan, thank you for this deeply personal and introspective article.
Regarding life’s Randomness—Although this is a hard concept to accept, many of the things we want can give us more problems than we ever imagined.
Truth be told, many people have found that getting the ideal job, the ideal mate, or some other desire turned out to be the worst thing that ever happened to them.
Perhaps we should think about all the severe problems we’ve been spared due to not getting all the things we dearly wanted.
I am not an overly religious person and firmly believe in free will and the importance of taking responsibility for our own actions, but this article and related comments made me think back on an impactful quote I heard in my 20’s. I was at a Baptist funeral for a work colleague who died unexpectedly of a heart attack a few weeks after her father had died. She was a lovely person who was universally liked and respected by her colleagues. As I sat in the church and witnessed the terrible sadness of the family, the preacher said something like “g-d shows you the mountains to lift you from the valley, but he also shows you the valley so that you will appreciate the mountains”. I apologize if that quite is not 100% accurate (it was over 30 years ago), but I recall this message often and it helps me maintain balance and perspective. Yes, there are friends, family, neighbors, colleagues who appear more fortunate than I am and of course there are many, many others much less fortunate. I believe the message is that we need to appreciate the things we do have and what we have achieved while always being thoughtful of those who have less and are less fortunate.
Thank you for sharing this.
I’ve changed through the years to decide that we have a will for sure and that we can make choices among lots of different alternatives with our will. However, our Will is not “free“ from those genetic predispositions Jonathan mentions or the experiences we have in life, etc. Many times I wondered if I hadn’t been influenced by birth nature or life experiences I would’ve chosen different investment options.
Your comment about life’s randomness really struck home. We seem, as creatures, to need to live by stories, connect threads in some way. And there are so many stories that purport to explain why something happens! . I worked in public health, and our capacity to identify ‘risk factors’ is both real but never the whole story. (And we’re never as sure as people on TV stock market programs are…) As I age, the value of humility becomes clearer and more helpful to me in every day living. I seem to remember someone– maybe a rabbi?– saying ‘act as if you can make a difference but don’t think you’re the main player.”
Jonathan, thanks for your usual Saturday wisdom. It’s very true that we compare ourselves to our contemporaries. I have the oldest, least attractive car in the neighborhood – a 10 year old Accord. I keep telling myself I should pick up a nice little beamer or similar. But then I ask myself why spend money on something I don’t need.
One of the many benefits of doing volunteer tax preparation for seniors and lower income folks is that i regularly come into contact with people who have much less than my wife and I do. That helps keep me grounded when I worry about our retirement plan.
“We make our own luck.” and “Luck is preparation meeting opportunity.”
recognizing opportunities is far more important than being prepared. If ya wait to trip over a four leaf clover you’ll always be unlucky.
The quotes attributed to Seneca ignore the well-established relationships between our genetics and early life experiences and our successes and failures.
That magnificent article is thought provoking in so many ways. But on the lighter note, thank you for bringing much needed attention to the great French fries quandary.
I‘m very fortunate that I can routinely choose the healthy option. But this is solely due to my wife invariably ordering fries, which I know she will not finish.
One of the best habits in my life started with the invention of TiVo and other DVRs. It was at that point we started recording all our shows, watching them on our schedule, and SKIPPING PAST EVERY COMMERCIAL. Instantly, you block out damaging distractions and gain oodles of extra time in your life. I haven’t ever met anyone else who does this which astonishes me. My other good habits: daily exercise and weighing myself every morning.
Here’s another that does as you do. I watch a lot of sports. I will record a Patriots game and skip commercials and the halftime score. When they were good I’d start watching an half hour after the game started and watched the last 5 minutes of game time live. Now that they are terrible I start an hour after as I am not as interested in the outcome. If the game is out of hand I start fast forwarding between each play to save even more time.
My husband and I do this. We both despise commercials. So much so that we pay extra for certain subscriptions (YouTube, Amazon, etc.) just to get the ‘commercial free’ versions. We use SlingTV to record any network programs we watch so we can fast forward through any commercials.
Your other habits mirror mine as well. I walk at least 5-8 miles a day and make sure to weigh myself every day.
I also weigh myself daily. Unfortunately I don’t always like the result.
I also log activity on a paper calendar. Last year I exercised or cut the lawn (which is performed with a push mower for 1 1/2 hours all on hills) and yard work totaling 299 days. 112 days of stationary biking yielded over 1,700 miles, 127 days of wt lifting at the gym, and 60 other days of other significant physical activity, and I still gained weight year over year 😢!
Luck in success in life may play a role but it is ultimately, as Branch Rickey said, “the residue of design.” Successful outcomes are the result of smart people making smart (often risky) decisions. Many other fortunate people are simply the spawn of wealthy generations. And then there’s the quote by Jules Renard which always pierces me to my guilty core: “Failure is not our only punishment for laziness; there is also the success of others.”
‘For instance, my instinct is to assume that others have good intentions.’
you were not wrong in your twenties, you were right but quo bono, who benefits? we all have good intentions but only within our own frame…we see the world not as it is but how we are…
we feed ourselves with ‘feely’ not necessarily ‘thinky’….the difference is thinky is changeable, malleable, evolutionary; facts make our understanding different, not better. where better is ‘feely’ we bend our world to suit our framing.
most of the time feely works just fine…we have a community of people like us that share a set of truths that are quite functional. we vote the same, we worship the same, we have a set of rules that govern our behaviors..we agree on much. but disruptions happen, the rules change, the routes to successes that we took for granted change. could be resources, could be climate, could be new ideas and disruptive tech..we might see stuff coming but maybe not.
thinky is hard…we all use facts the way a drunkard uses a lamp post,for support and not illumination. and we cling to and elevate those pieces of information that validate us and are resistant to change.
we are healthy today–i will be healthy tomorrow, i’ve invested in stuff that is safe–confederate dollars? weimar–marks? lots of ways things can go wrong or at least ‘different’. we all have good intentions but they are personal good intentions and can only be understood by the study of the ‘other’…we don’t all have the same good intentions.
we must be nimble, we must be accepting that the world DOES change and we must adapt. we must be compassionate at least to the level of understanding different ways to think and act.
the point is good intentions are a variable set of personal behaviors, not a universal.
Jonathan, I think you are on to something with your last comment:
“This, I assume, was a trait that helped our nomadic ancestors to survive —but I’m not sure it does much for us today, except increasing our unhappiness.”
We are a product of our genes. And they don’t care if we are happy. The only thing important to them is that they are passed on to the next generation. If the price for survival is that the individual is unhappy but procreative, our genes would declare us a winner.
I think we can achieve some contentment in accepting this reality and thereby being more stoic — and more self aware.
More on the topic in Richard Dawkins book The Selfish Gene.
Like any thinking person, I wrestle with these age-old questions and reach conclusions about how to live my life. These ideas last about 5-10 years and then they evolve. I read somewhere that no matter how how old we are, we think we’re the best we’ve ever been in the age we are. I feel that way from at least a psychological and metaphysical perspective. My knees don’t agree.
Two books have influenced me most recently. This last decade I have worked to be happy by what Harvard psychologist Daniel Gilbert learned from the research about happiness. I now intentionally work to learn from the experiences of others. AND, most importantly, I try not to remember things by how they ended.
Irv and Marilyn Yalom’s touching book A Matter of Death and Life sits in my heart as a treatise on how to love, to live and to die. Each chapter is written by one to the other as Marilyn opts to die by assisted suicide and Irv resists—his famous psychology practice was defined by helping people to grab joy from life, not end it.
Jonathan, I, too, have “been frequently sold” as the old western song laments about being taken financial advantage of and I wouldn’t have had it any other way. To trust others is to risk. And more often than not, that trust is rewarded. Though now I’m a little more Reaganesque in that I trust and verify!
None of these very good questions can be answered competely, some wisdom can be achieved but we will always be in search of something greater than ourselves. We all have a hole in our being that drives us to fill it with something. I believe it is searching for faith in a Creator and a Savior. I won’t go on because this is not a religious site and I respect that. But you asked the questions…
Without any question my younger self thought that he knew everything and age bringing wisdom was an old wives tale. Different story now! As a psychiatrist I don’t agree that we all have a set point with happiness. With help that apparent set point can be changed. I can never be in your shoes, but if I had a year to live, I would order the entree I liked with a side of extra fries. The fear of fat is wrong science and in any case is it going to do me in before my time?
Very insightful. A balanced view of life includes seeing things more objectively. I think you’re certainly right. Perhaps we can work toward that goal by attributing luck and skill to their proper place and trying to view our worries as transient as the hedonic treadmill would have us find our latest possession…
So well said. As I look sideways and backward from my age of 63, and decades of work as a family physician – well, I couldn’t agree more. The points you have highlighted play out again and again, by us all.
I retired 3 years ago at 68 after decades as a family physician. As you know, primary care docs not uncommonly see the Porsches and Jaguars belonging to the specialists, and there is often quite a bit of jealousy (particularly given the current workload of people in primary care).
I worked for 7 years in a FQHC serving the homeless and indigent. That experience gave me a wonderful perspective, and every day when I left work i realized exactly how fortunate I was.
The comparison game indeed is where people compromise their happiness. God commanded that we not covet for our own good!
FQHC – Federally Qualified Health Center
My primary care physician retired about two years ago. In 2010 I was his first patient since he had returned from serving as a medical volunteer in Haiti after a terrible earthquake. He shared that he had done more amputations in the month serving in Haiti than his previous decades as a primary care physician.
We are are indeed fortunate for the medical doctors who chose a career path less traveled.
Thank you very much. I was very lucky to encounter many incredibly skilled health care professionals in this arena, who had all decided the nobility of the mission was more important than money.
I hear so many stories these days from people who had bad healthcare related experiences. Sadly it seems far too often the “care” has disappeared from healthcare. But thankfully much less so on the clinical side versus the business/administrative end.
I think that we are born as problem solvers and continue as such till we die. That is purpose driven. As we solve one problem another moves up to take its place. We look for problems to solve. Could be simple such as hunger or more complicated but pressing. Our brains much like computers are meant to solve problems. Successful people tend to be excellent problem solvers even though likely to be batting less than .500
A comment about the “hedonic treadmill”. My goal, for decades, was to have $1 million saved up in my retirement accounts. After my divorce 11 years ago, my balances got cut in half to $250,000, which made achieving the goal all the more difficult. However, I started plowing the maximum allowed by the IRS into my 401k and shortly afterwards, tightened my belt even more and put all contributions into the Roth 401k. I DID achieve my goal on 12/13/23 and am now about 20% above it. However, the satisfaction/joy/happiness/relief/whatever lasted only a couple of days. But after that, what happened? It’s not that I became DISSATISFIED with the achievement. But it’s just not that big of a deal now. Now I’ve moved onto worrying about something I have zero control over: the idiots in Washington wrecking the economy with the $36 trillion of debt that we have and putting a HUGE dent in my savings when I’m retired. “Vanity, vanity, all is vanity.”
Jonathan, astute and thought provoking as always. The 2 parts that hit close to home for me were:
No matter how well things are going we still do have our times of struggle. To be reminded that we have been hard-wired to be this way through our younger selves and life experiences are sobering. Trying to change now is difficult if not impossible!