Happy New Year
“If you only wished to be happy, this could be easily accomplished; but we wish to be happier than other people, and this is always difficult, for we believe others to be happier than they are.” – Baron de Montesquieu
Occasionally we teach general finance classes to young people. Austin and Crystal have taught classes to the basketball players at UH to help them handle the money they receive from their NIL deals. I’ve taught classes to elementary school kids that have never heard of investing.
In either case, ask a student in one of those classes what they would do if you gave them one million dollars and they will probably list off some things they could buy that would make them happy. Cars, clothes, houses, jewelry, etc. The problem of course is that none of that stuff, by itself, is likely to make us happy for a suitable length of time.
Happiness equals reality minus expectations. If reality exceeds your expectations, you are happy. If reality falls short of your expectations, you are sad. Buy lots of stuff expecting it to make your life better and eventually you are broke and likely far less happy than you were at the start, having had and lost all the nice things.
Most of us know this. We see stats like 15.7% of NFL players have filed for bankruptcy within 12 years of retiring, and 78% of NFL players and 60% of NBA players face serious financial hardship after retiring. People, regardless of how much money they make, are much better at spending money than they are at saving. And they keep spending because they think the next purchase will make them happier than the last. But that isn’t the point I want to make here.
Today’s goal is to remind you that we are living in an incredible time. The things we have today are things previous generations couldn’t even dream about.
The advancements that have been made during our lifetimes have made humanity healthier, more productive, and more comfortable. As we enter 2024, it is worth repeating that, despite what you may hear in the news (unless you get all of your news from humanprogress.org), the world has continued to get better. However, the only way to truly appreciate this truth is to stop moving the goal posts on what you think will make you happy.
As Morgan Housel wrote in Same as Always:
Imagine a life where almost everything gets better but you never appreciate it because your expectations rise as fast as your circumstances. It’s terrifying, and almost as bad as a world where nothing gets better.
So, before we start jumping headfirst into resolutions, my prayer is that we all take some time to appreciate the beauty of our current circumstances, reflect on our expectations, and in doing so, find a little more happiness in the New Year.
Until 2024.