Instead of constantly seeking external sources of happiness like wealth, status, or material possessions, focusing on internal sources such as personal growth, relationships, and contentment can potentially have more lasting impacts on happiness.
Thus, the pursuit of happiness may seem like running on a treadmill, where you continue to run but remain on the same spot.Understanding the Hedonic Treadmill can help individuals refocus their life goals. It suggests that our circumstances, good or bad, only temporarily affect our happiness level.This concept argues that although occurrences such as a promotion or a life-changing illness temporarily increase or decrease happiness, people quickly adapt to these changes and return to their baseline level of happiness over time. The Hedonic Treadmill, also known as Hedonic Adaptation, refers to the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes. The phonetic spelling of “Hedonic Treadmill” is: hɪˈdɑːnɪk ˈtrɛdˌmɪl Key Takeaways It suggests that chasing wealth or material possessions does not lead to lasting happiness. Essentially, as a person makes more money, their expectations and desires rise in parallel, negating any increased happiness from the wealth increase. You thought you’d be happy when your portfolio hit a certain threshold, but once it got there, suddenly it doesn’t feel like quite enough, so you press on, delaying retirement a little longer.The Hedonic Treadmill, also known as Hedonic Adaptation, is a theory in behavioral finance proposing that people tend to return to their original levels of happiness or satisfaction, regardless of major positive or negative events or life changes.
Our job is to help our clients attain financial freedom - but how much is “enough?” When are you done? Like a treadmill set on incline, wealth accumulation can feel like a hill that never crests. These are worthy practices, but somewhat outside the scope of wealth management. There are many recommendations for how to accomplish this, ranging from the practice of mindfulness (appreciating the present moment, knowing it won’t last) to expressing gratitude for what you have. Where does it end, and how do you (to quote George Jetson) “stop this crazy thing”? Sometimes the good vibes will last for a little while, but once the degree has been framed, the new car smell has faded or the raise has been negotiated, you’re left wanting the next new thing to bring a hit of dopamine.
Hedonic adaptation refers to the idea that all people have a happiness “set point” they tend to return to following major life events or purchases.
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