The Adaptation Principle


 
4/21/12 The day I bought my Sexy2K.

4/21/12 The day I bought my Sexy2K.

During my time in LA, I made enough money to live a comfortable life. Go out for lunch even though I brought lunch? I'm in. Go to San Diego to buy a 2006 Grand Prix White S2000 AND get some beers at Stone Brewing? I'm in. Over the years I steadily made more money, but for some reason, I never felt like I had more money. Even though I was enjoying more luxuries than ever before, I never felt any happier. I couldn't understand why.

Enter the Adaptation Principle.

the human ability to adapt is our greatest asset.
— Aimee Mullins

Remember when you got your wisdom teeth pulled out? You still ate food. Remember when gas prices skyrocketed? You still got around town. Remember when Trump was elected president? You still chose to live in the U.S.

Humans are able to adjust to new situations. For evolutionary purposes, it's the difference between life and death. For financial purposes, it keeps people in a hamster wheel of misery.

I thought earning more money would make me happier. I could afford nicer things, eat fancier food, buy a house. I could set myself up for the future. But as Dan Gilbert says, "people almost always overestimate the intensity and duration of their future emotional reactions."

What was really happening was I was adapting to each increase in income. My "baseline level of happiness" would adapt. The more money I made, the more my state of happiness adapted to stay the same. Looking back, I wasn't very happy and money clearly wasn't doing anything to help.

To better explain this, let me bring in a treadmill.

 

The Hedonic Treadmill


The Hedonic Treadmill is the observed tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes.
— Stephanie Rosenbloom
Running on a treadmill shows how people adapt to more money. 

Running on a treadmill shows how people adapt to more money. 

As with running on a treadmill, even though your income (i.e. speed) increases, you're not getting ahead (i.e. running in place). Your baseline of happiness stays the same no matter how much money you make.

You can’t change your natural and usual state of tranquility, the riches you accumulate will just raise your expectations and leave you no better off than you were before
— Jonathan Haidt

The shitty thing is that over time, you build tolerance to increases in income. $50k is satisfying for a year, then next year it's $100k, then $200k the year after that. You have to run faster and faster just to stay in the same place. You have to make more money, buy nicer clothes, a newer car, and a bigger house just to keep your head above water. It's a zero-sum game.

You want to chase money? You better keep up.

You want to chase money? You better keep up.

 

Adaptation is the reason why:

  • More money and possessions won't bring long-term happiness. It's why winning the lottery won't make your life that much better.
  • No amount of money will ever be enough.
  • The more you have, the more you want. As your tolerance increases, so does your need to satisfy your cravings. This is why you want to frequently upgrade your phone, wardrobe, or lifestyle even if there is nothing wrong with them.

By always adapting to increasing income, it proves lack of money isn't the issue. For me, the real issue is that chasing money hid my real problems.

  • Complacency: Chasing money is the easy way out. A goal I could always rationalize and fall back on. Getting trapped in a dead end job was easy and socially acceptable no matter how miserable it made me.
  • Fear: Chasing money kept me from growing. It was "too risky" to try something new, something that would challenge me. I couldn't jeopardize my steady income from my dead end job.
  • Insecurity: I lacked confidence. I used to believe that having money could make me feel better about myself. But in reality, money gave me fake confidence. You can't trade money for confidence because real confidence comes from being comfortable with failure.
 

Chasing money hid my issues for far too long. It was only a couple years ago when I stopped chasing money and started fixing my real problems. It's been slow and challenging but it's worth it because fixing my real problems is what has made me happy.

Today, I make enough money to live a simple life. A life where money doesn't distract me from more important things. A life that can't improve much by chasing more money because I am human: My ability to adapt won't let it.

 

 

 

 

 

 

 

THE GAME CHANGERS