FOOL ON THE HILL Contentment isn't a feeling or a mood; it's a decision. Only by
choosing to be content with what you already have can you accomplish your
budget, saving, and investing goals. Without choosing contentment, you'll be
ensnared by a subtle, but ever expanding, appetite for money and all the
things it can purchase -- and worst of all, it's an appetite that's never
fulfilled.
By Matt Richey (TMF Matt) (This article
originally ran on March 22, 2002.) Happiness is less a
matter of getting what we want than of wanting what we have. --David G. Myers, Ph.D. As a professor and
author, Dr. David G. Myers is an authority on the psychology of happiness.
The above quote comes from a recent article by Dr. Myers entitled, "Does Economic Growth
Improve Human Morale?" This article caused me to noodle over the
importance of how contentment affects the way we handle our finances.
Contentment may seem too touchy-feely a topic to be of importance to those
who associate finance purely with hard numbers, but I think this subject gets
at the root of why we spend and save the way we do. In fact, I would go so
far as to say that making a deliberate, daily decision to be content forms
the very foundation of a sound financial life. Need some examples?
Being content with my current income and choosing to live within its
boundaries prevents me from racking up credit card debt. Being content with
my current car prevents me from running out and buying that Porsche Boxster
that I love but can't afford. Being content with my cash investment portfolio
prevents me from greedily pursuing outsized returns by using margin and other
leveraged instruments (e.g., options) in excess. In sum, being content
prevents me from buying into the lie that more or better stuff leads
to happiness. Don't get me wrong, I'm not at all against material goods. I'm
proud of America's free-market economy and all the value and diversity it
affords its consumers. My warning here is against the futility of trying to
find contentment in money and the things it can buy for us. Dr. Myers says
wealth is like health: "Although its utter absence can breed misery,
having it does not guarantee happiness." To borrow some stats
from Dr. Myers' article, consider that in 1957, when economist John Galbraith
described the United States as The Affluent Society, the average per-person
income, expressed in today's dollars, was $8,000. Today, the figure is
$16,000. In spite of that doubling in real income, the number telling the
University of Chicago's National Opinion Research Center that they are
"very happy" has declined from 35% in 1957 to 30% today. Step back and think
about all the innovation since 1957, all the wonderful improvements in
technology and medicine, and then consider that we Americans are, as Dr.
Myers put it, "Twice as rich, and a little less happy." This research
establishes what most of us already know in our hearts: Wealth and material
possessions, while not bad in and of themselves, are not the route to
happiness. And yet even though we know this, we as affluent
Americans can still so easily find ourselves caught up in materialistic-based
unhappiness. For example, are you unhappy with your current home, current
income, current portfolio? Or on a more subtle level, let me ask you, have
you already purchased the car you wanted, the home you wanted, the stuff
you wanted, but in the process you took on debt that you can barely afford or
that cuts into your ability to save adequately? In either case, your wants
are getting the best of you and preventing you from finding real contentment. Part of the reason
behind why our material wants can overpower us is because of something known
to psychologists as the adaptation-level phenomenon: Whatever it is
that's going on in our life, we immediately adapt to it and then that becomes
neutral. So if you get a big promotion and raise, you'll think that's wonderful
-- for about six months, and then it becomes neutral... and eventually not
enough. The problem isn't
having an appreciation for the bigger and better, the smaller and faster, the
newer and cooler; the problem is when this appreciation becomes an appetite
that eats at you and robs you of your happiness. Living in an affluent
and innovative society, it's only natural that we in America
are subjected to ever-expanding wants -- for newer cars, smaller cell
phones, better restaurants, fancier abodes, higher salaries... the list goes
on and on. And it's true, all of these things are exciting -- for a
time -- but then they're just a part of everyday life. That's why they
don't bring lasting contentment. For those of us who are
aspiring to be Foolish with our finances, I think Myers' findings on
happiness and the adaptation-level phenomenon have some pretty important
implications. Do you find that your wants and desires are always being
ratcheted up a few notches higher than what you currently have? Can you not
get out of debt because your wants are expanding faster than your income? Is
even a portion of your happiness based on the size of your portfolio or its
recent performance? If the answer is "yes" to any of these
questions, you're setting yourself up for persistent dissatisfaction and
possibly an inability to meet your financial goals. The only solution is a decision
to be content with what you already have. If you make this kind
of willful decision to live contentedly within your current financial
picture, I believe you'll find it much easier to stay within a budget,
to save properly, to give generously to charities and those in need, and to
invest with a healthy mindset of getting rich slowly (What's the rush?
Research proves you won't be happier anyway!). In aggregate, we
Americans are materially blessed. As the opening quote so poetically
expressed, the key to contentment is choosing to enjoy and be thankful for
what we already have. Matt Richey is very
content as a writer-analyst at The Motley Fool. His boss, however, should not
view this contentment as a sign that he wouldn't be willing to accept perks,
raises, or bonuses. Matt welcomes your feedback at MattR@fool.com. The Motley Fool is investors
writing for investors. |
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