3701: Happiness Through Subtraction by The Mad Fientist on Financial Independence

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[00:01:00] This is Optimal Finance Daily. Happiness through subtraction. By the The Mad Fientist of madfientist.com. And I'm Justin Malek. Welcome back to the podcast where I read an article to you every day of the year, with permission from the authors. So with that, let's get right to it as we optimize your life. Happiness through subtraction. By the Madfiantist of madfiantist.com.

[00:01:30] Financial independence isn't the answer to all your problems, and it won't be the source of all your happiness. In fact, financial independence, or FI, is just another shiny object. A new car, the latest smartphone. It's all the same. We scoff at normal consumers when they try to find happiness by buying things, but are we any better? I know I wasn't.

[00:01:56] I thought that all my problems would be solved, and complete happiness would arrive as soon as I hit my magic number. After all, why wouldn't it? Once I reached my FI target, I could do whatever I wanted, whenever I wanted. There'd be nothing holding me back from true happiness. So I decided to do everything I could to get there as quickly as possible. Big mistake. Darkness in pursuit.

[00:02:25] When Jill and I were looking for a house in Vermont, we found one that we loved, but it was in the middle of nowhere. Although it was right in between her work and my work, it wasn't around anyone we knew, and it wasn't close to any of the things we loved about Vermont. Ski hills, ice hockey rinks, breweries, and so on. We were a bit hesitant to buy it, but we didn't find anything better, so we went for it. I figured that even if we were a bit isolated and bored,

[00:02:55] it'd be good to just buckle down for a few years and really save a bunch of money. I was also about to start my free master's degree, so I figured a bit of quiet and isolation would make it easier to study. At first, things were fine, and we enjoyed ourselves in our new place. Over time, though, the disconnection from our friends and family started wearing on us. For Jill, she started to get very homesick, and for me, I started to get depressed without even really knowing it.

[00:03:24] Looking back, it seems obvious, but at the time, I just figured I was stressed about being back in school. No joy. I remember being on the top of a beautiful mountain in Vermont on a clear January day, skiing with Jill and friends who came to visit us from Boston, and I was miserable. I thought to myself, what's the point spending $70 to be unhappy when I could be unhappy at home and at least be saving money and getting some schoolwork done?

[00:03:54] From that point on, I avoided anything that cost money. Phi was the main focus, so I didn't want to do anything that would delay me crossing that finish line. Downward spiral. As I got closer and closer to my goal, however, the unhappier I became. Isolation was what initiated the unhappiness, but I continued to isolate myself more and more, which further increased my unhappiness.

[00:04:21] For an already homesick wife who was missing her new niece and nephew back in Scotland, having a husband that didn't want to do anything besides work, study, and write articles about weird tax avoidance strategies didn't really improve her happiness either. Is this it? Sometime during all of this, I hit my target number. And do you know what? I didn't feel any different. The happiness that I thought would arrive didn't.

[00:04:50] It makes sense now that there's absolutely no reason why seeing X dollars in my bank account would make me instantly happy when having X minus $1 sitting there didn't. But I was still surprised. All that hard work, and I'm not any happier? Snap out of it. It wasn't until Jill described what had been going on that I realized how bad it had gotten. The isolation had made me unhappy.

[00:05:20] The unhappiness caused me to focus solely on the pursuit of Phi and abandon everything else. And what resulted was not good for anyone. Once we understood what had been happening, we immediately decided to sell our house and our self-imposed exile and get back to spending more time with the people we love. We've since spent months visiting friends and family in the States and in Scotland. We've met interesting new people

[00:05:48] while traveling through Southeast Asia. And I'm pleased to report that we're back to being as happy as ever. Is Phi not worth it? You might be thinking to yourself, MF, why are you talking me out of pursuing financial independence? I'm definitely not. Pursuing Phi has been an incredible journey, and I would recommend it to everyone. I would just caution you to avoid the Phi tunnel vision that can occur

[00:06:16] and instead focus on the journey. That's where the magic is. I'll explain. An aside on happiness. Humans are terrible at predicting what will actually make us happy. We think a new iPhone will make us happy, but soon after getting it, we grow accustomed to it and we revert back to our baseline happiness. We think more money will make us happier, but as our income grows,

[00:06:44] our frame of reference changes and the Joneses we compare ourselves to change as well. We think we'll be happy if we move into that nice, wealthy neighborhood. But once we get there, our peers are wealthier than our previous peers and we're left wanting more. As Swiss economist and happiness researcher Bruno Frey describes in his book, Happiness, A Revolution in Economics, quote, There are many processes that may explain

[00:07:12] why higher income does not have more of an effect on happiness. The most important of these are that individuals adapt to their new standard of living and that they compare themselves to other individuals. It's not the absolute level of income that matters most, but rather one's position relative to the past and other individuals, end quote. So we're bad at predicting what will make us happier and we quickly grow accustomed to bigger and better things.

[00:07:41] So what is the best way to pursue happiness then? Subtraction. Happiness through subtraction. When I was in Thailand basking in happiness once again, I read a book called Anti-Fragile by Nassim Nicholas Taleb. I plan to write a full review of that book, but one of the most impactful parts is when Taleb describes the value of subtraction when pursuing happiness. Quote,

[00:08:09] Happiness is best dealt with as a negative concept. The pursuit of happiness is not equivalent to the avoidance of unhappiness. Each of us certainly knows not only what makes us unhappy, but what to do about it, end quote. This idea is so simple, but it is brilliant. We are terrible at predicting what will make us happier but it's obvious what makes us unhappy. So rather than pursue something

[00:08:37] that likely won't actually improve our well-being, focus instead on eliminating the things that definitely make us unhappy. And the net result will be increased happiness. And that is why the pursuit of financial independence is such a worthwhile endeavor. Having money in the bank allows you to say goodbye to all the things that make you unhappier. Don't like commuting? Tell your boss you're working remotely from now on. Don't like your boss or your job? Quit.

[00:09:07] Don't like your neighbors? Move. My journey. Although hitting my number didn't instantly make me happier, the pursuit of FI allowed me to eliminate nearly everything that used to make me unhappy and as a result has vastly increased my happiness. I no longer have to commute to work. I'm not trapped in the office from 9 to 5. I avoid most of the meetings I despise and I don't have to deal with office politics

[00:09:37] thanks to FI and the power of quitting. I had enough money in the bank to leave our house vacant while Jill and I traveled around the States and Scotland visiting our friends and family. Had we not had that luxury, we would have been forced to remain isolated in a place we didn't want to live anymore. My savings gave me the option to sell our house at a loss which eliminated the stress of having it sit there empty during the Vermont winter.

[00:10:05] That amount of stress would not have been worth any amount of money. The list goes on and on. Conclusion. Don't focus solely on the finish line because once you get there, you may be disappointed. The journey is the important part. So figure out all the things that make you unhappy and use your FI savings to eliminate them. A big number in the bank is relatively meaningless

[00:10:33] but using that money to remove the things from your life that make you unhappy is priceless. You just listened to the post titled Happiness Through Subtraction by the Madfiantist of madfiantist.com I'll be right back with my commentary. You've heard me talk about how I started tracking every dollar in and out of my life back in 2010. It began as a business school assignment

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[00:12:27] We spend most of our time here on the addition side, save more, earn more, and invest more. But his point is that the real value of money might be on the other side in what it lets you take away. When I think about the money decisions that have actually improved my day-to-day, almost none of them were things I bought. They were things I got to stop doing or stop worrying about.

[00:12:55] And I don't think we're really wired to see that. If I asked you to list 10 things you'd buy with more money, you could probably rattle them off in a few seconds. But ask what you'd remove, and that would probably take a bit longer to answer. And he makes a good argument that that second list is where the happiness actually is. So here's the question to think about today. Not what would I add if I had more,

[00:13:22] but what's the one thing draining me right now that I could use money to subtract? Hopefully it gives you some good ideas. And with that, thank you for being here and thinking about these good ideas along with me. Have a great rest of your day, and I'll see you tomorrow as usual, where your optimal life awaits.