Can you determine how to be happy? The idea that I’m building on is the NPV calculation, the Net Present Value used to determine the better option between competing projects with differing time-frames. I’ve been thinking about a net present happiness (NPH), about considering those things that bring short-term happiness, and those that may require an investment in order to reap larger happiness in the future. If you’re wondering what something like this might look like, look no further than retirement. The idea of saving for retirement, foregoing happiness that you could have now by blowing your entire paycheck, and saving for the future so that as an old man or woman you’ll be able to travel the world, enjoy hobbies, or at least not eat cat food, basically future happiness.
How would you go about thinking about how to calculate your current and future happiness? You’d need to consider similar constraints as those in the NPV calculation. Namely, you’d need to consider all the flows of happiness from a given activity, both those in the present and future, and the flows of happiness related to other activities that you’re giving up. Additionally, you’d need to properly discount the happiness of the future. Like money, future happiness is worth less than present happiness in most cases, not because of inflation, but because it is so difficult to estimate future happiness and it is uncertain.
And this really is the biggest problem with net present happiness, estimating future happiness flows from various activities. Take something simple like a new pair of shoes, those neat 4 inch heels with the red bottom that you’ve wanted. How do you estimate or quantify how much happiness those will bring. Is the desire from the other women at work worth more than the looks from the guys? What about the confidence from wearing them, what’s that worth? What about once those initial times of happiness pass, as they generally decrease with time and number of exposures? If we can’t answer these questions about things in our life compared to others in the short term, how do we do so in the long term? Is the method doomed because it is just too difficult?
I don’t think so. However it will take some work. What are some of the areas that bring us true happiness? In the example above, it isn’t the shoes themselves, but the reactions we get, the feelings we have about or because of them, and status and success they convey to others that make us feel important. Generally, the sources of happiness include such things as autonomy, income and status, respect, fame, learning new things, challenges in general, security, consistency, friends, family, experiences, and material possessions that replicate some or at least one of the above. These things bring us more or less happiness during our lives depending on what else we have, and how other feelings interact.
Determining what you derive happiness from and those things that you don’t is the key to better estimation of your future happiness. Do you like the experience of travel? Does this bring you happiness both during the actual event, seeing amazing sites and history, things as they once were, learning about it before your trip, showing off your photos to friends and co-workers, and being able to relive the travel experience in memories for years? What is that worth to you? Is it worth more than the benefits of a more powerful car or a new car instead of a new one? To me, certainly not. I’d much prefer to travel and drive a used car for all the other time. Others don’t feel that way, and instead pour money into their rides, custom stereos, slick rims, whatever else folks do to their cars. For some people, this really does bring them happiness, or at least they think it does. If it does, more power to you.
Of course this all relates back to the Ritual Practices that we follow here at the Cult Of Money. I don’t care what brings you happiness, but you should expend more of your time and effort into those things that bring you lasting happiness, not the transitory type of happiness that dies out the second time you wear or use it. Take a while and think about happiness, what types of things flow happiness to you and what those things take from you or are lost to opportunity costs.
Readers, what brings you happiness? Some folks out there have bucket lists, is everything on the list those things that bring you the most happiness, or are you trying the shotgun approach to try and find happiness? What makes you happy? Can you calculate or estimate what brings you more happiness now and in the future?