Sunday Email: Hedonic Treadmill / Experiences

Read time: ~ 4.30 minutes

Happy Sunday!

Every Sunday I offer strategies for the week ahead and a thought to fuel your action.

For three years, my life was defined by a routine that consumed me from January to June. It was relentless, almost mechanical. My focus narrowed to a singular goal—passing the CFA exams. The process was grueling but necessary. I had a plan that worked for Level I, so I stuck with it for Levels II and III.

I meticulously planned every day: three to four hours of studying each weekday and eight on the weekends. Social life? Non-existent. Dinners? Pre-made chicken and rice every night. My life became so routine that I barely noticed time passing.

I distinctly remember the day of the Level III exam. Walking out of the Georgia World Congress Center, I was completely drained. A heavy sense of doubt crept in—had I done enough? The anxiety of possibly repeating this process for another year was suffocating. But I tried to shake it off and move forward until results day.

The night before the results were released, I barely slept. My mind cycled between dread and anticipation. Would I get that dreaded "fail" notification or the "pass" I had sacrificed so much for? It all came down to a simple email.

Early the following day, with my stomach in knots, I closed my office door and opened the email. It didn't tell me directly—I had to click a link. Holding my breath, I clicked it, and there it was—"Pass."

The relief was overwhelming, and for a moment, I was on top of the world. I raised my arms in victory, stood there with a huge grin, and then did something that still surprises me: I went back to work. The goal that had consumed years of my life was suddenly just another checkbox ticked.

A few days later, the euphoria faded, replaced by thoughts of what was next. After three summers of sacrifice, I didn't bask in the glory. I just moved on. It struck me how fleeting these moments of triumph are. We reach our goals, celebrate briefly, and then we crave more.

This relentless pursuit of "more" is something we all experience. It's who we are.

In the 1970s, psychologists Philip Brickman and Donald T. Campbell coined the term "Hedonic Treadmill." Many of us equate it to our constant chase for bigger and better things—and that's part of it. But Brickman and Campbell pointed to the idea that we each have a baseline level of happiness—a set point we revert to after a high (like passing the CFA exam) or a low (like losing a job).

Think about it: We all know the thrill of an accomplishment, whether it's a career milestone or buying something we've wanted for ages. That high can last days, weeks even, but eventually, we settle back to our usual state. The same thing happens after setbacks. We grieve, we struggle, but somehow, we find our way back to normalcy.

This is the essence of the hedonic treadmill. Humans are wired to pursue happiness, and because we naturally return to that set point, we keep pushing for more. We tell ourselves that the next promotion, the next raise, or the next big purchase will finally sustain our happiness. But it never is.

Why? Because of hedonic adaptation—the phenomenon where we quickly get used to positive changes. That raise? It's exhilarating at first, but soon enough, it becomes the new norm. We forget what it was like before, and then we're chasing the next raise, convinced that we'll feel content this time.

This cycle starts early in life. From childhood, we see privileges we don't yet have—staying up late like our parents or being free from tests like our teachers. We yearn for these "rights" and believe reaching them will bring lasting satisfaction. But it doesn't stop there. In our careers, we look to those above us, aspiring for their authority and their perks. We think we'll be fulfilled if we reach that next level. Yet, each time we achieve it, we only want more.

The same pattern exists in our social lives. Whether striving to live in a better neighborhood or joining an exclusive club, we work toward these goals, enjoy a fleeting sense of achievement, and then set our sights on something else.

Humans strive to keep moving because sitting still makes us uneasy. Living in the South, I've come to view mosquitoes as an apt metaphor for this restlessness. Still water attracts mosquitoes, just as stagnation in life attracts discomfort. We keep moving to avoid getting "bitten," believing that progress is the key to avoiding complacency.

In wealth management, we see this play out with clients every day. They come to us with financial goals, and while the focus is ostensibly on money, it's really about that human drive for more. We help them set a plan, and once they reach that goal, they're ready for the next one. The bar moves, and our clients—like us—adapt.

Our industry is, in many ways, a hedonic treadmill. We're judged not by what we've done but by what we do next. This constant chase can leave us and our clients feeling unfulfilled despite all our achievements.

So, how do we help clients step off this treadmill? The answer lies in shifting our conversations from merely financial targets to something deeper—purpose.

Money will always be central to what we do, but it will never be the key to lasting fulfillment. There's no amount that clients will feel completely comfortable with. Even if they say there is today, they'll adapt and want more when they reach that number.

This isn't a flaw; it's human nature. Our opportunity as advisors is to guide clients toward purpose, focusing on three pillars:

1. Experiences Over Material Gains

2. Material items lose their luster quickly. The excitement of a new car, a second home, or a luxury purchase wears off, leading clients to the familiar longing for more. Experiences, however, are different. They create lasting memories and connections. They continue to pay "experiential dividends" every time we recall the experience or reconnect with the people we shared them with. Experiences offer sustainable happiness, while material goods are fleeting.

3. Establishing Core Values

4. Core values aren't just for businesses. They provide a foundation for decision-making and goal-setting that aligns with what truly matters. Helping clients define and live by their core values can be transformative. It allows them to make choices and set goals that bring fulfillment rather than just a temporary dopamine hit.

5. Investing in Relationships

6. Decades of research, including Harvard's long-term study on happiness, consistently show that strong relationships are the most significant driver of lasting happiness. We all know the feeling of walking away from a meaningful conversation or gathering with a smile and a sense of fulfillment. As advisors, we can help clients cultivate these connections by setting "relationship goals" or creating opportunities for them to meet like-minded individuals within our network.

Ultimately, for us and our clients, getting off the hedonic treadmill requires a mindset shift—one that focuses on being present.

We live in a world obsessed with what's next, constantly planning, predicting, and striving for more. But sometimes, the best thing we can do for our clients is to help them slow down and appreciate where they are right now.

Our industry always looks ahead, forecasting what's to come and how it will impact portfolios. But our most valuable work is helping our clients look around, be present, and find gratitude in the moment. The accurate measure of wealth isn't just what's in a portfolio—it's the richness of our experiences, the strength of our values, and the depth of our relationships.

A Thought To Ponder This Week

Experiences are valuable.

The main challenges keeping us from more experiences is time and money.

The challenge in our professional life has been time.

But AI is on the verge of revolutionizing this and creating more time for us all.

There is much happening within the realm of virtual reality where barriers to experiences are starting to be removed.

With virtual reality allowing us to immerse ourselves into concerts, sporting events and new cities from the comfort of our own home.

This all sounds very overwhelming.

For many we may start wondering what is the world coming to.

But the technology floodgates have opened.

And the opportunities will be endless. Some will provide value, some will be head scratchers and some may swing too far.

But the ultimate outcome will be progress.

This week put on your futuristic hat and think about somewhere or something you would like to experience in an immersive way from the comfort of your own home.

And write it down. You may just have this opportunity in the near future.

The best is ahead!

-Matt